IM final.ppt

Embed Size (px)

Text of IM final.ppt

  • 7/29/2019 IM final.ppt

    1/17

    1

    Export and Import Strategies

    Submitted to:

    Prof. Sanjay Jain

    Submitted by:

    Group No 2

    Karan Bhadra 111230

    Rahul Kochar 111244

    Ruturaj Thacker 111252Sunil Sancheti - 111259

    Competitive Entry Strategies in Expanding

    Markets

  • 7/29/2019 IM final.ppt

    2/17

    Participation StrategiesParticipation Strategies

    The choice of how to enter each

    international market

    Exporting, Licensing, Strategicalliances, and Foreign DirectInvestment

  • 7/29/2019 IM final.ppt

    3/17

    H i g h

    L o w

    R i s k

    C o n t r o l

    D i r e c t

    E x p o r t

    I n d i r e c t

    E x p o r t

    L i c e n s i n g

    S t r a t e g i c

    A l l i a n c e s

    F D I

    L o w H i g h

  • 7/29/2019 IM final.ppt

    4/17

    Export StrategyExport Strategy

    Export strategy is to shipcommodities to other places orcountries for sale or exchange.

    In economics, an export is any goodor commodity, transported from onecountry to another country in a

    legitimate fashion, typically for use intrade.

    4

  • 7/29/2019 IM final.ppt

    5/17

    ExportingExporting

    Advantages:

    Limited investment;

    Ownershipadvantages

    Location advantages Internalization

    advantages

    Increase revenues

    achieve economies ofscale

    alleviate excesscapacity

    minimize risk and

    diversify markets

    Disadvantages:

    Higher unit cost toconsumer

    Likely lower market

    share Limited learning on

    country marketcharacteristics

    Possible preemptionby competitors

  • 7/29/2019 IM final.ppt

    6/17

    Phases of exportPhases of export

    developmentdevelopmentAs companies learn more about the

    process of exporting, they tend to export to more countries

    they tend to export to more dissimilarcountries which are located furtheraway

    they tend to export a larger percentageof their sales.

    The following figure summarizes

    the various phases of exporting 6

  • 7/29/2019 IM final.ppt

    7/177

    Phases of Export Development

  • 7/29/2019 IM final.ppt

    8/17

    Export StrategiesExport Strategies

    Direct exporting

    Indirect exporting

    Uses intermediaries

  • 7/29/2019 IM final.ppt

    9/17

    Direct ExportingDirect Exporting

    Direct selling involves salesrepresentatives, distributors, or retailers who arelocated outside the exporter's home country.

    Direct exports are goods and services that are sold toan independent party outside of the exporters homecountry. Mainly the companies are pushed by corecompetencies and improving their performance of valuechain

    More aggressive

    Requires more contact with foreign companies

    Uses foreign sales representatives, distributors, or

    retailers

  • 7/29/2019 IM final.ppt

    10/17

    Channels in DirectChannels in Direct

    ExportingExportingSales representatives: use the

    company's promotional literatureand samples

    Foreign distributors: resell the

    products

    Sell directly to foreign retailers or

    end users

  • 7/29/2019 IM final.ppt

    11/17

    Indirect ExportingIndirect Exporting

    Export IntermediariesExport IntermediariesIndirect exports, is simply selling goods

    to or through independentdomestic intermediary in their ownhome country, then intermediaries

    export the products to customersforeign markets

    Companies use external specialists for

    exporting before developing internalcapabilities

    Companies may market their productseither directly or indirectly through11

  • 7/29/2019 IM final.ppt

    12/17

    Export IntermediariesExport Intermediaries

    Direct Selling

    Direct selling involves sales

    representatives, agents, distributors,or retailers

    A sales representativesales representative usually

    operates on a commission basis

    A distributordistributor is a merchant whopurchases the products from the

    manufacturer and sells them at a 12

  • 7/29/2019 IM final.ppt

    13/17

    Export IntermediariesExport Intermediaries

    Indirect Selling

    Commission agents work for thebuyer

    Export Management Companies(EMCs) provide export services for aspecific exporter or group of

    exporters

    Export Management Companies

    EMCs are mostly small, entrepreneurialventures that tend to specialize by 13

  • 7/29/2019 IM final.ppt

    14/17

    Export Trading CompaniesExport Trading Companies

    (ETCs)(ETCs)

    ETCs tend to operate on thebasis of demand rather thansupply

    ETCs can be formed by

    Competitors can be exempt fromantitrust laws

    State and local governments

    Money-center banks

    14

  • 7/29/2019 IM final.ppt

    15/17

    IMPORTANT FACTORS FORIMPORTANT FACTORS FOR

    SUCCESSFUL EXPORTINGSUCCESSFUL EXPORTINGCommitment of the firms management

    Exporting approach reliant on strong skillsbase

    Good marketing and informationcommunication system

    Production capacity & capability, productsuperiority, competitive pricing

    Effective market research

    Effective national export policy

  • 7/29/2019 IM final.ppt

    16/17

    15-16

    Management focus: ExportingManagement focus: Exporting

    strategy at 3Mstrategy at 3M

    Minnesota Mining and ManufacturingCo.

    55% of the firms revenue was throughexporting

    Export Strategy

    Enter on a small scale to reduce risks Add additional product lines once the

    exporting operations start to becomesuccessful

    Hire locals to promote the firms products

    Formulate global strategic plans for the

  • 7/29/2019 IM final.ppt

    17/17

    THANK YOUTHANK YOU

    15-17