daniels_ib13_13

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 13-1

International BusinessEnvironments and Operations,

13/ePart 5

Global Strategy, Structure, and Implementation


Chapter 13

Export and Import Strategies


Chapter Objectives• To introduce the ideas of export and import• To identify the elements of export and exporting

strategies• To compare direct and indirect selling of exports• To identify the elements of import and importing

strategies• To discuss the types and roles of third-party

intermediaries• To profile the role of counter-trade


Exporting and Importing

• Exporting refers to the sale of goods or services produced by a company based in one country to customers that reside in a different country.

• Importing is the converse: the purchase of products by a company based in one country from sellers that reside in another.


World’s Top Trading Countries


Environmental Factors Influencing Export and Import Operations


Export Strategy

• Advantages to exporting– Requires less expertise, time, and capital

than other modes of entry– Operational control– Helps companies expand and diversify

sales as well as achieve economies of scale


Questions to Consider

Companies typically consider the following questions in evaluating the export option:

• What do we want to gain from exporting?• Is exporting consistent with our goals?• Will exporting put undue demands on our resources? If so, how will

we meet them?• Does exporting leverage our core competency?• Does exporting fit the current configuration of our value chain?• Do our coordination systems support the needs posed by

exporting?• Are the projected benefits of exporting worth the costs?• Would our resources be better used to develop new domestic

business?


Characteristics of Exporters

• Although the largest companies are the biggest exporters, small companies are also expanding their export capability.

• Firm characteristics moderate its export intensity. Size plays a role, but often management commitment, efficiency, and cost structure matter more.


Two Views of Export Development

Two views of export shape interpretation: The slow, sequential dynamic of incrementalinternationalization and the instantinternationalization of the born global


Phases ofExport Development


Pitfalls of Exporting

• Adjusting Financial Management• Adjusting Customer Management• Adjusting for Information Technology• Additional Stumbling Blocks


Designing an Export Strategy

1. Assess the company’s export potential by examining its opportunities and resources.

2. Obtain expert counseling on exporting.3. Select a market or markets.4. Formulate and implement an export strategy.


Import Strategy

There are three types of importers:• Those looking for any product around the world to import and sell.• Those looking for foreign sourcing to get their products at the cheapest price.• Those using foreign sourcing as part of their global supply chain.


Advantages of Importing

• Specialization of Labor• Global Rivalry• Local Unavailability• Diversification of Operating Risks


Import Brokers

• Key Broker Functions:– Valuing products in such a way that they qualify

for more favorable duty treatment– Qualifying for duty refunds through drawback

provisions– Deferring duties by using bonded warehouses and

foreign trade zones– Document and paper-flow management– Limiting liability by properly marking an import’s

country of origin


Customs Agencies

• Procedural Assistance• Efficiency Improvement


Future: The Technology of Trade

• Advances in transportation and communication increases trade

• Collaborative software allows smaller companies to engage in international trade more efficiently

• 3rd Party Logistics


Import Documentation

• Bureaucratic Impediments– The efficiency of importing is challenged by

delays, documents, and fees.


The Export Process

Principal types of exporting:• Direct—products sold to an independent

party outside of the exporter’s home country.

• Indirect exports—products sold to an intermediary in the domestic market, which then sells the goods in the export market.


Indirect Selling

• Export Intermediaries– Export Management Companies: operate

on a contractual basis—usually as an agent of the exporter.

– Export Trading Companies: operate based on demand rather than supply. They identify suppliers who can fill orders in overseas markets.


Direct Selling

• Direct selling involves sales representatives, distributors, or retailers.– Direct Selling to Foreign Retailers and End

Users– Direct Selling over the Internet


Export Documentation

Key export documents are:• Pro forma invoice• Commercial invoice• Bill of lading• Consular invoice• Certificate of origin• Shipper’s export declaration• Export packing list


Sources of Regulatory Assistance

In the United States, a number of institutions,most notably the Department of Commerceand its affiliates, help firms identify andrealize export and import opportunities.


Freight Forwarders

A foreign freight forwarder is an export or import specialist dealing in the movement of goods from producer to consumer.

• Primary transportation modes include:– Surface freight (truck and rail), ocean

freight, and airfreight.– Intermodal transportation—the movement

across different modes from origin to destination.


Counter-trade

This is an umbrella term for several sorts oftrade, such as barter or offset, in which theseller accepts goods or services, rather thancurrency or credit, in payment for its products.


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means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the

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