International Business
Environments and Operations,
13/e
Global Edition
Part 5
Global Strategy, Structure, and
Implementation
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Copyright © 2011 Pearson Education
Chapter
13
Export
and
Import
Strategies
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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
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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.
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World’s Top Trading Countries
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Environmental Factors Influencing
Export and Import Operations
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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
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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?
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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.
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Two Views of Export Development
Two views of export shape interpretation:
The slow, sequential dynamic of incremental
internationalization and the instant
internationalization of the born global
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Phases of
Export Development
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Pitfalls of Exporting
•
•
•
•
Adjusting Financial Management
Adjusting Customer Management
Adjusting for Information Technology
Additional Stumbling Blocks
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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.
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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.
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Advantages of Importing
•
•
•
•
Specialization of Labor
Global Rivalry
Local Unavailability
Diversification of Operating Risks
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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
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Customs Agencies
• Procedural Assistance
• Efficiency Improvement
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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
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Import Documentation
• Bureaucratic Impediments
– The efficiency of importing is challenged by
delays, documents, and fees.
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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.
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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.
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Direct Selling
• Direct selling involves sales representatives,
distributors, or retailers.
– Direct Selling to Foreign Retailers and End
Users
– Direct Selling over the Internet
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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
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Sources of Regulatory Assistance
In the United States, a number of institutions,
most notably the Department of Commerce
and its affiliates, help firms identify and
realize export and import opportunities.
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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.
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Counter-trade
This is an umbrella term for several sorts of
trade, such as barter or offset, in which the
seller accepts goods or services, rather than
currency or credit, in payment for its products.
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stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise,
without the prior written permission of the publisher. Printed in the
United States of America.
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