Sheet3 - Barter: Direct ex. of good or services b/w 2...

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Barter : Direct ex. of good or services b/w 2 parties w/o cash transaction Bill of lading: serves as receipt, contract & document of title. From carriers to exporter Compensation or Buybacks: build a technological plant in a country (ie. Equipment, training etc) agree ton give the country a certain % of output Counterpurchase: reciprocal buying agreement. Allow firm to purchase material back from a country to a sale is made. “counterpurchase credit” Countertrade: a range of barterlike agreements. Use for a firm exports to a country which currency’s not freely convertible&lack of foreign ex. reserve to purchase imports. Types: Barter, Counterpurchase, Offset, Switch Trading, Compensation or Buybacks Pro: finance export deal when other means dun work. Con: firm may receive unusable or poor-quality goods that can’t be disposed of profitably. (large, diverse multinational enterprise can easily dispose the good) Department of Commerce: help firms gather info in matchmaking process(matchmaker prog), make foreign contacts&explore export opportunity. 1) Int’l Trade Administration, 2) U.S. and Foreign Commercial Srvc Agency Draft: exporter(maker) to importer(drawee) for payment (specific amount&time) e.g. sight drafts or time draft (negotiable instruments) Export Credit Insurance: in US provided by Foreign Credit Insurance Association (FCIA) under guidance of Eximbank. Provides coverage against commercial risk and political risks. Export management companies: help exports to identify export opportunities. Pro: network contacts, multilingual employees, know diff. business, know export’g process, local business regulation. Con: firm can fail to develop on its own 1) start export for the firm, then firms take Export: 1) cost reduction by achieve econ of scale (large production), 2) opportunity for growth Export-Import Bank(Eximbank): independent agency of US gov. 1) provide financing aid that will facilitate exports,imports&ex. of commodities b/w US and other countries. 2) guarantee rePMT of medium&L-T loans US bank makes to foreign borrowers for purchasing US exports. 3) direct lending to foreign borrowers Exporting (impediment): 1) ignorance of foreign market opportunities. Ans: dept. of commerce&export mngt companies. 2) complexities, i.e. business practices, language, Lack of trust: ans: reputable bank in b/w 2 firms Letter of credit(L/C): request by importer. The bank will pay to exporter Neophyte exporters: became discouraged or frustrated w/ exporting process b/c problems, delays, pitfalls, i.e. poor mkt analysis, understanding of frgn mkt condit’n, no customization, no effective distribution prog., bad promot’l campaign, securing fin. (ans: hire export mngt company, export consultant, rite strategy) Steps: 1) hire export mngt co. 2) focus on a handful of mkts, 3) enter foreign mkt in small scale more time to learn, 4) hire more personnel, 5)
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This test prep was uploaded on 04/22/2008 for the course IBUS 211 taught by Professor Ullmann during the Spring '07 term at Binghamton University.

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Sheet3 - Barter: Direct ex. of good or services b/w 2...

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