Export 7500

Importing and ExportingImporting and Exporting

John Beasley

TMGT 7500 - 01

Introduction To International BusinessIntroduction To International Business

As a Manager You Must Understand the Cultural Context of a Region or County Before You Can Understand How Business Operates in a Given Economy.

Business In A Cultural ContextBusiness In A Cultural Context

A Cultures Story Defines the Rules for Social Engagement and Social Standing Within That

Society. The Story Largely Determines the Distribution of Wealth in That Culture.

(Example: Function of Roman Catholic Church in the Roman Empire was to define Universalism - Plato’s Republic).

The Social ProcessThe Social Process

Go From Outside the Group – Behavior is viewed as Dysfunctional

(Indoc) Enter a Conversion Experience. Go From Outside The Group, To Inside The

Group. (Pavlov’s theories on conversion)Assimilation – memorize the story. Live the

story.

Business In Cultural ContextBusiness In Cultural ContextExamples:CULTURE CONTROLING STORYClassical Greece: Homer’s Iliad and OdysseyRoman Empire (Commonwealth): Virgil’s Aeneid. Jewish Culture: Torah Christian Culture: Bible Islamic Culture: Koran Japanese: ZEN - Mahayana Sutura’s ( koans - Sound of One Hand Clapping)(Alfred North Whitehead, Process and Reality)Maritime: Boatswain’s PipeChina: Chairman Mao’s Little Red Book(Sin/guilt Based Cultures Vs. Shame/honor Based Culture)

Theories On TradeTheories On Trade

Mercantilism Economic NationalismGlobalization

Mercantilism Mercantilism

NationalismBalance of trade in favor of exportsA system of tarriffs and subsidies(According to John Locke the problem with this system is the hording of assets. Utilitarianism = Epicureanism as presented by Lucretius 50 B.C.)

MercantilismMercantilism

Some Other Systems That Do Copy Several Mercantilist Policies, Such As Japan's Economic System, Are Also Sometimes Called Neo-mercantilist.[32] In an Essay Appearing in the 14 May 2007 Issue of Newsweek, Economist Robert

J. Samuelson Argued That China Was Pursuing an Essentially Mercantilist Trade Policy That Threatened to Undermine the Post-world War II International

Economic Structure (Wikipedia Encyclopedia, Mercantilism)

http://en.wikipedia.org/wiki/Economy_of_Japan

http://en.wikipedia.org/wiki/Newsweek

Economic NationalismEconomic Nationalism

Export Dominated PhilosophyMake More Than They SpendProduce More Than They ConsumeExport More Than They Import(Weigh the Utility Value of Assets, Enlightened Mercantilism)

Germany, Japan, Hong Kong, South Korea, Taiwan, Singapore, China

GlobalizationGlobalization

Integration of National Economies Into the International Economy Through: TradeForeign Direct Investment Capital FlowsMigration of Technology(Globalization is utilitarian colonialization)

Exodus Of CapitalExodus Of Capital

1997-98 Asian Stock Market CrashedOpportunity to Move Capital (P/E Ratio, P/B Ratio)

Exodus of U.S. Flagged ShipsExodus of Manufacturing Exodus of Capital

ExportingExporting

Direct MarketingIndirect Marketing

DirectDirect

Limited Exposure Opportunity to Test MarketA Learning Experience Greater Control Over Process U.S. Producer Deals Directly With Foreign Buyers

Generally Higher Profits

Indirect SellingIndirect Selling

Uses Local Intermediary Export Management Company (EMC)Export Trading Company (ETC) U.S. Producer Has No Contact With Foreign

Buyers

Direct Or Indirect?Direct Or Indirect?

A Major Factor in Determining to Use Direct or Indirect Selling Is Available Resources. In the Early Period It Is Common to Have Common Management Between Domestic and Exported Sales (HBS, P 2) (Do you understand the culture, do you have the capital?)

Cooperative Contractual RelationshipsCooperative Contractual Relationships

Firms Derive Income From Providing Service’s Such As Technology, Expertise, Resources, Engineering, Design, and Perhaps a Trade Name.

Cooperative Contractual RelationshipsCooperative Contractual Relationships

Example: In the early 1960’s Kieser Manufacturing – Hutson-Willis (JEEP) designed engines for Renault (France) for the South American market. Rambler-Nash merged to form American Motors Corporation (AMC) and in the process acquired Willis Jeep.

Licensing Licensing

Is When a Company Sells the Rights to Produce and Market It’s Products in a Foreign Market (HBS, P. 3)

Licensing Licensing

Example: Rambler Licensed the Production of Rambler Rebel’s in Argentina to Renault. The Car Becomes the Torino, a Best Seller in Argentina for About 20 Years Until the Mid 1980's.

Franchising Franchising

Typically a Business System Is Sold or Franchised to a Franchisee (HBR, P. 3). It Is Popular in Many Service Industries Such As Restaurants, Auto Parts Houses, Auto Repairs, Tire Stores, Appliance Stores, Hardware Stores, Florists, Shoe Stores, Coffee Shops, Donut Shops, Glasses, Beauty Salons, Health Food Grocery Stores, and Vitamin Shops.

FranchisingFranchising

SubsidiariesSubsidiariesA Major Type of Investment Is to Produce a Subsidiary Company in a Foreign Market. Overcomes Import Restrictions Greater Market Penetration Spreads R&D Expenses Over Larger Sales Large Financial and Management Requirements(HBR, P. 3).

SUBSIDIARIESSUBSIDIARIESEuro-DisneyEuro-Disney

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Strategic Alliances Strategic Alliances Joint Ventures

Example: In the 1970’s Renault Began Designing Cars for American Motors (Rambler). By the 1980’s Renault Began Selling R5’s and R9’s (Alliance) Through AMC Dealerships. Renault Bought a Financial Interest in AMC.

Protecting ProductsProtecting Products

Copyright – Intellectual property and concepts

– Microsoft

Patents – Physical property and their designs

– Edison Film Studios

Sources of Export Assistance Sources of Export Assistance U.S. Department of U.S. Department of

CommerceCommerce45 District Offices Advice on Industry, Countries, Finance Book: Basic Guide to Exporting Book: Exporters Guide to Federal Resources for Small Business (SBA)

Sources of Export AssistanceSources of Export AssistanceInternational Trade International Trade

AdministrationAdministration World Traders Data ReportProvides Background Information on Importers and Exporters Worldwide.Agent Distributor Service (ADS)Does Searches for Overseas Agents and Distributors for Your Type of Product.National Trade Data Bank (NTDB)CD Providing - Market Research, Statistics, Foreign Traders Index.


AdministrationAdministration Basic Guide to Exporting 150 Page Guidebook on Exporting, Shipping, Payment Methods, Documentation, And Marketing Tips. Advertising Services Through the “Commercial News USA”Monthly Journal on ExportingTrade Opportunities Program Officers in 65 Embassies Around the World to Assist Exporters.


AdministrationAdministration Commercial Information Management System 3500 Marketing Research Reports About World Export; DemandTrade Barriers Profiles of BuyersTrade Events and ShowsCompetitionLabor and Trade Data Custom Sales Survey

Sources of Export AssistanceSources of Export Assistance

Custom Sales Survey Custom Sales Survey The Commerce Department Will Provide a Marketing Potential

Survey for Your Company. Is There a Market for the Product? Cost, Competition, Price, Place, Promotion Available Marketing Channels Consumer Survey, (Price, Quality, Availability, Service) What Is the Best Process for Advertising What Are the Barriers to Entering the Market? Who Might Carry or Represent the Product? Any Opportunities for Joint Ventures or Licensing?

Sources of Export Sources of Export AssistanceAssistance

Export-import Bank USAExport-import Bank USAThe Eximbank Helps US Companies to

Compete Against Foreign Government Subsidized Financing in Foreign Markets. Lending Program Guarantee Program Working Capital Program Insurance

Sources of Export AssistanceSources of Export AssistanceSmall Business Administration Small Business Administration

(SBA)(SBA)Field Offices Provide; Counseling Referral to Assistance Programs Initial Attorney Consultation International Trade and Export Business Management Training

Sources of Export AssistanceSources of Export AssistanceUS Department of Agriculture US Department of Agriculture

(USDA)(USDA)

The U.S. Remains the Worlds Largest Exporter of Agricultural Items. All of These Services Are Also Available to Agricultural Firms.

Import ExportImport Export

Almost every nation offers some form of assistance in exporting, an exporting kit.

If you intend to do import – export one of the most important things you can do is get these manuals from a number of countries; Turkey, Holland, Germany, Japan, China and compare their packages.

Bibliography Bibliography

Culture

Toynbee, Arnold, A Study of History, Abridged, Oxford University Press, Oxford, 1972

Erikson, Erik H., Childhood and Society, W.W. Norton & Company, New York, 1963See Also Karl Jaspers Social Development Theories. When Karl Jaspers Refers to Second Level Shame Based Societies and Third Level Sin Based Societies, He Is Likely Referring to Erik Erikson’s Eight Stages of Development, the Eight Ages of Man. This Is Not Defined Within Jaspers Work.

Karl Jaspers, Way to Wisdom, (Yale University Press, New Haven, Conn., 1960) Pp.99-103

Alfred North Whitehead, Process and Reality, (Free Press, New York, New York, 1979) P. 39

BibliographyBibliography

Digby Ditzell, The Protestant Establishment: Aristocracy & Caste in America, (Random House, New York,1964) Pp. xi - Xii

NOTE: Everything I Have Defined Here Holds True for Western Societies, Not for Eastern Societies. In Western Culture Story Conquers Chaos, Story Defines Society. (I Would Call These Define the System Societies.)In Eastern Culture Story Shields One From Ultimate Reality or Wholeness, the Reality of What Is Actually Happening. (China, Japan, Korea) (I Would Call These Cut the Bullshit, What Is Actually Happening Societies.) Two Opposite Ways of Processing Reality.

BibliographyBibliographyOutline of Mercantilism

▪ That Every Inch of a Country's Soil Be Utilized for Agriculture, Mining or Manufacturing.▪ That All Raw Materials Found in a Country Be Used in Domestic Manufacture, Since Finished Goods

Have a Higher Value Than Raw Materials.▪ That a Large, Working Population Be Encouraged.▪ That All Export of Gold and Silver Be Prohibited and All Domestic Money Be Kept in Circulation.▪ That All Imports of Foreign Goods Be Discouraged As Much As Possible.▪ That Where Certain Imports Are Indispensable They Be Obtained at First Hand, in Exchange for

Other Domestic Goods Instead of Gold and Silver.▪ That As Much As Possible, Imports Be Confined to Raw Materials That Can Be Finished [in the

Home Country].▪ That Opportunities Be Constantly Sought for Selling a Country's Surplus Manufactures to

Foreigners, So Far As Necessary, for Gold and Silver. ▪ That No Importation Be Allowed If Such Goods Are Sufficiently and Suitably Supplied at Home.

(Wikipedia Encyclopedia, Mercantilism)

BibliographyBibliographyThe Asian Financial Crisis of 1997 - 1998 and the Behavior of Asian Stock

Markets

By Urbi Garay

http://www.westga.edu/~bquest/2003/asian.htm

Galbraith, John Kenneth, The Great Crash of 1929, Houghton Mifflin Co., N.Y., N.Y., 1961

Foley, James F., The Global Entrepreneur: Taking Your Business International

QuickMBA / Strategy / Foreign Market Entryhttp://www.quickmba.com/strategy/

Quick MBA Excel Spreadsheets for Business - Free

http://download.cnet.com/3001-2077_4-10475788.html?spi=7965efb919046414e0c29548e4f2992e

Free Spreadsheets From Google

Http://www.google.Com/google-d-s/spreadsheets/#utm_campaign=en&utm_source=en-ha-na-us-bk&utm_medium=ha&utm_term=spreadsheet%20programs

BibliographyBibliographyHarvard Business School 9-395-034 (Case Study) August 11, 1994Note on Entering Foreign Markets Opportunities for Smaller U.S. Companies

(Maritime = Episcopal)To Be Episcopal in the USA Is to Agree That You Are on the Same Page With Successful People in Society. This Is to Say You Adhere to the English Principles of Business Enterprise. Digby Ditzell, The Protestant Establishment: Aristocracy & Caste in America, (Random House, New York,1964) Pp. xi - Xii

Economic History of England Beginning in 1700 to 1900, Economic History of USA 1800 to 2000

The South Sea Company Was a British Joint Stock Company That Traded in South America During the 18th Century. Founded in 1711, the Company Was Granted a Monopoly to Trade in Spain's South American Colonies As Part of a Treaty During the War of Spanish Succession. In Return, the Company Assumed the National Debt England Had Incurred During the War. Speculation in the Company's Stock Led to a Great Economic Bubble Known As the South Sea Bubble in 1720, Which Caused Financial Ruin for Many. In Spite of This It Was Restructured and Continued to Operate for More Than a Century After the Bubble.


Stock Price / Earnings RatiosStock Price / Assets RatiosStock Price / Book Value Ratios

The P/E or Price/earnings Ratio, and the P/B or Price/book Ratio. Rising Stock Prices and Earnings May Well Yield a Flat P/E Ratio (I.E. There Is No Bubble Since Higher Stock Prices Are Justified by “Fundamentals”, at Least As It Pertains to the P/E Ratio.)

Definitions Definitions Social StandingColonialism Economic Nationalism Globalism Utilitarianism Epicureanism
