Test 2 study guide

Test 2 study guide - Rationale for international buying...

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Rationale for international buying Introduction: Why international buying (or global sourcing)? Changing commercial trade environment Free trade by WTO and formation of EU, NAFTA, ASEAN Increased opportunities- higher competition in domestic and int’l markets Global sourcing as a strategic weapon-improved performance and profitability Necessity to maintain a competitive position Ultimate objective of global sourcing: What do we want to achieve from global sourcing? Satisfy operational needs by lowering costs, improving quality, and seeking wider availability Development of strategic outsourcing: increase technological know-how, stimulate product innovation Reasons for international buying: Ways to ensure low prices from international buying Lower price: low labor costs, exchange rate, efficiency, low pricing for exports Exchange rate Efficiency (equipment and process) Lowering process of exports List reasons for international buying Lower price Higher quality (most important factor) Unavailability of items domestically Wider choice of products Better technical service Technology Further price improvement Potential problems Source location and evaluation Lead/delivery time Political and labor problems Currency fluctuations Payment methods Quality control Rejects/reorders Paperwork costs Legal problems Transportation Factors to consider in new product development Specification Exclusivity Pricing/mark-ups Merchandising mix (compatibility of lines) Vendor Selection Retail Buying Decisions: The Sheth Model: What are inter-organizational factors affecting retail buying decisions?
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Retailer type Size and location Vision and mission Management and mentality What are intra-organizational factors? Type of merchandise Product positioning Regulatory constraints Steps for successful outsourcing Evaluating vision and mission Strategy and needs Sources for vendor selection Trade magazines US chamber of Commerce County trade information offices Trade shows International Procurement offices (IPO) Internet Direct visits Evaluation criteria for vendor selection Company factors Financial position Reference clients Reputation Service factors Delivery capability Level of service Production factors Production capability Technological capability Manufacturing practices Availability Legal compliance Working conditions labor Currency Consideration World once pegged: What does this mean? From 1870-1914 exchange rates were globally
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Test 2 study guide - Rationale for international buying...

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