Ch13 Export Strategies


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International Business Chapter Thirteen Export and Import Strategies Strategy of the Multinationals Price Competitive Advantage Quality Export Strategy of the Firm Firms export in order to increase revenues achieve economies of scale alleviate excess capacity minimize risk and diversify markets Firms consider the following factors to export Ownership advantages Location advantages Internalization advantages 3 Phases of Export Development 4 Steps Involved in Designing Export Strategy Assess company s export potential Obtain export counseling Select a market or markets Formulate and implement an export strategy Table 13 2 Export Business Plan has the details 5 Export Intermediaries Export can be conducted directly indirectly or through third party intermediaries Export management company EMC a firm that either acts as a manufacturer s agent or buys merchandise from manufacturers for international distribution Export trading company ETC a large independent broker whose primary purpose is to match suppliers to foreign customers for a fee Foreign freight forwarder an international trade specialist who assists in the delivery of goods from producer to customer 6 Import Strategy of the Firm Why import Basic imports include industrial and consumer goods and services intermediate goods and services Strategic advantages of imports Specialization of labor Global rivalry Local unavailability Diversification of operation risks Gain knowledge from abroad 7 Export Import Process Exporter Ships Importer Bill of lading Informs Receives payment Exporter s Bank Payment Reimbursement Informs Opens Letter of Credit Importer s Bank Export Documentation Key export documents include pro forma invoice outlines the terms of sale price and delivery details commercial invoice detailed legal document see example in the text shipper s export declaration used to monitor exports and compile trade statistics bill of lading a detailed receipt from the carrier transporting the cargo consular invoice

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