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Topic3.2ExportEntryModes.pptx - 3.2 E-Commerce Nowadays...

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3.2 E-Commerce Nowadays, conducting business overseas is electronically driven Internet promotional tool, procurement, digital trading (trade transport network embracing the logistics chain) Scanning the web to obtain potential overseas buyers, markets, and companies (B2B, B2C contract) Exporter/importer must have hi-tech computer resource & software (EDI) Procurement suppliers – buyers relationship, need to understand buyers’ needs & aspirations, harmonized their strategies (develop synergy) 1
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3.3 EXPORT ENTRY MODES Introduction Choice between using direct and indirect exporting organizational forms involves: 1. cost of performing functions, 2. transaction costs of organizing activities or contracting with others. Figure 7.1 shows how a foreign manufacturer may use both direct and indirect forms of export. 2
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Figure 7.1 Indirect and direct export of consumer goods 3
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Figure 7.2 Direct and indirect exporting 4
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3.3 EXPORT ENTRY MODES 3.3.1 INDIRECT EXPORT 3.3.2 DIRECT EXPORT 3.3.1 INDIRECT EXPORT Exporter/manufacturer uses independent organization (IO) located in the manufacturer’s country. Process of selling goods overseas through a third party, thereby relinquishing control of the selling process of the goods. In some cases, exporters may works together with IO & coordinates the export activities. 5
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Continued In other words, exporter uses “middleman” or “third party” in their home-country. They do not export on their own but instead relies on the middleman/IO. Example: Local buying office (525), piggyback operations (496- 497), an export house (484) & trading house (498) Advantages: not necessary of internationally-focused organization because no contact is made Two (2) alternatives: 3.3. 1.1 International Marketing Organizations a. Merchants b. Agents 3.3.1. 2. Cooperative Organization a. Piggyback Marketing b. Export Combinations.
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