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Exporting, Importing, and Countertrade: Studycase of 3M and Pakistan Export Processing Zone Gizti Diah Huzaifah & Silvio Adriano S.S International Business subject Faculty of Economics and Business Universitas Gadjah Mada 2014
Citation preview
Exporting, Importing & Countertrade
Gizti Diah Huzaifah / 320296Silvio Adriano S.S / 342806
Export Strategy at
Management Focus
Minnesota Mining and Manufacturing Co.
Products
one of the world’s great mult inational operations
over
60%firm’s revenues are from outside U.S
remains a major exporterwith over $2 billion in exportswith over $2 billion in exports
ExportExport establish initial presenceestablish initial presencesales raisessales raises
build foreign production
build foreign production
Export Strategy’s Principle
Export Strategy’s Principle
FIDOFirst In Defeat Others
getting into market firstgetting into market first
learning about
country
learning about
country
learn how to sell before
others
learn how to sell before
others
“make a l i t t le, sell a
l i t t le”entering
small scaleentering
small scalevery modest investment
very modest investment
pushing one basic
product
pushing one basic
product
adds additional product
adds additional product
Export Strategy’s Principle
hire local employees
local sales subsidiary
local sales subsidiary local hireslocal hires better ideabetter idea
Export Strategy’s Principle
Export Strategy’s Principle Implemented
formulate global strategic plans
for export
Export Strategy’s Principle Implemented
eventual overseas
production
eventual overseas
production
local authorities -
way to sell
local authorities -
way to sell
office cleaning
crews
office cleaning
crews
office product
distributor
office product
distributor
young womenyoung women
“sample the daylights”
“sample the daylights”
Export Strategy’s Principle Implemented
Conclusion
Conclusion
OpportunitiesOpportunities
Successful Strategies for Export
Concentrated Market
Concentrated Market
Small ScaleSmall Scale
RelationshipRelationship
Hire LocalsHire Locals
Local Production
Local Production
Export Processing Zones Authority of
Pakistan
Country Focus
An organization under the Ministry of Industries run by
a Board of Directors
An organization under the Ministry of Industries run by
a Board of Directors
With the task of creating a network
of EPZs (Export Processing Zones)
With the task of creating a network
of EPZs (Export Processing Zones)
Promoting exports for Pakistan’s
development goal
Promoting exports for Pakistan’s
development goal
Promoting Exports, how?
Custom tariffs will not be applicableCustom tariffs will not be applicable
Flexibility to carry out all transactions in foreign convertible
currencies
Flexibility to carry out all transactions in foreign convertible
currencies
Promoting Exports
Specializing in the production of goods and services mainly
for export
Specializing in the production of goods and services mainly
for export
Currently there are 12 EPZs in Pakistan
EPZs attract foreign capital investment
EPZs supposed topromote exports
The EPZs themselves are established in cooperation with private sector companies
Offer complete infrastructural
facilities
Offer complete infrastructural
facilities
Resulting in attractive zones for FDI
Resulting in attractive zones for FDI
The growth of Pakistan’s EPZs is in a positive
trend, yet it plays smaller role on the overall export
trade
The growth of Pakistan’s EPZs is in a positive
trend, yet it plays smaller role on the overall export
trade
Out of total $17billion exports, EPZs currently bring in around $250
million per year.
Out of total $17billion exports, EPZs currently bring in around $250
million per year.
EPZs Trends
EPZs Roles
The question remains:
Should Pakistan focus on promoting local industry in its EPZs, instead of emphasizing
foreign investment alone?
Should Pakistan focus on promoting local industry in its EPZs, instead of emphasizing
foreign investment alone?
What implications will that have for the country’s
economic development?
What implications will that have for the country’s
economic development?
Promoting Local IndustryPromoting Local Industry Emphasizing FDIEmphasizing FDI
Advantage:Strengthen the
country’s economy
Advantage:Strengthen the
country’s economy
Advantage:Ease off any
risks brought by exporting
abroad
Advantage:Ease off any
risks brought by exporting
abroad
Drawback:Unfamiliarity of
foreign, opportunities for exporting
Drawback:Unfamiliarity of
foreign, opportunities for exporting
Drawback:When transfer of payments made,
resulting in the deficit current account
Drawback:When transfer of payments made,
resulting in the deficit current account
Ways for local to overcome complexity & diversity in
capturing export’s opportunities
business counseling, information gathering, technical assistance,
and financing by:
counceling
trade associations
trade associations
government agencies
government agencies
commercial banks
commercial banks
Assigning EMC (Export Management Company)
to help local f irms
export marketing
department
export marketing
department
international department
international departmentacting asacting as for its clients
firmfor its clients
firm
Thank you.Gizti Diah Huzaifah / 320296Silvio Adriano S.S / 342806