Keywords: MBA of International Trade Management almost free graduate school of business business structure

MBA of International Trade Management

These are some brief notes on International Trade Management - 1

Dr.  S.  Maurer,  
MBA Professor

Product adaptations may even include changës in one or more combinations of brand name,  color,  size,  taste,  design,  style,  features,  materials,  warranties,  after sale service,  technological sophistication and performance.

The cost of petroleum products along with a country's infrastructure,  for example,  may mandate the need to develop products with a greater level of energy efficiency.

Let’s assume that we have a buyer,  a broker/middleman,  and a supplier/manufacturer.  At the request of the broker,  a buyer applies for a letter of credit,  but this time there is no mention of the letter of credit needing to be transferable?

Foreign government product regulations now common in international trade are expected to expand in the future.

Those who do decide to venture abroad must realize that exporting success is not achieved overnight.  The requirements are the same as when you first started your business in this country.  That is,  you must be willing,  even enthusiastic,  about making a long-term commitment,  agree many experienced exporters.

A product may have to be adapted in a number of ways to meet the physical,  social or mandatory requirements of a new market.  it may have to be modified to conform to government regulations or to operate effectively in country specific geographic and climatic conditions.  it may be redesigned or repackaged to meet the diverse buyer preferences,  or standard of living conditions.

What flies off the shelves in Chicago may not necessarily be a great seller in Munich.  Cultural differences and varying product standards can present serious barriers if you aren't willing to adapt your commodity to your new target market.

Documentation is important not only for the amount of additives,  but also the source of the product; secondary or indirect additives are also regulated in most countries.

In a survey of 328 of the U.S.'s fastest growing enterprises,  globally focused enterprises anticipated 1992 growth rates of 26.4 percent compared to 22.5 percent for firms that aren't involved in selling internationally.

If you have found that direct mail has paid off for you at home,  chances are good that it will also help you reach buyers in foreign markets.

it would make perfect sense to develop [unless such products are already available] and export dehydrated vegetables in some country markets.

To make purchases of mass marketed consumer products more affordable in lesser developed country,  makers of products such as razor blades,  cigarettes,  chewing gum,  ball point pens and candy bars have been known to have repackaged them in small single units rather than multiple units prevalent in the developed and more advanced economies.

Outline the country or countries in which you plan to do business; identify your export objectives,  both immediate and long-term; define the specific tactics you will use to achieve these objectives,  such as a marketing and promotional plan and strategies; specify your distribution system and pricing; establish implementation and milestone schedules that reflect your objectives and tactics; and detail your allocation of resources.

In defining their price,  most exporters choose from three common methods.  You can base your overseas price on your domestic one,  then add in export costs.  You can use incremental cost pricing,  determining a basic unit cost that takes into account production and exporting costs plus an additional markup for profit.  Or you can reduce the quality of your product,  using cheaper materials or simplifying production processes.

If you choose to export directly,  you must be willing to devote more time,  money,  personnel and other enterprise resources.

These are some brief notes on International Trade Management - 2

Dr.  S.  Maurer,  
MBA Professor

Delivery is the placëment of the vehicle in a position for unloading.

On ramp-to-ramp rail traffic,  delivery by the railroad is completed when the railroad delivers the car to the destination ramp and notifies the consignee that the shipment is available for pick up.

Size of packaging,  material used in packaging,  before and after sale service and warranties may have to be adapted in view of the scope and level of service provided by the distribution structure in the country markets targeted.  In the event post sale servicing facilities are conspicuous by their absence,  enterprises may need to offer simpler,  more robust products in overseas markets to reduce the need for maintenance and repairs.

One area in which you should definitely seek assistance is market research.  You can get up-to-date information from the U.S.  Commerce Department's trade information Center and the SBA.  The SBA and its volunteer offshoot,  the Service Corps of Retired Executives [SCORE],  can also help you with marketing or distributing your commodity.

Many of the same organizations that sponsor trade shows and fairs - such as the SBA,  manufacturer groups and government agencies - also sponsor trade missions to target countries that enable you to hear from local officials and meet prospective buyers.

Quality packaging for shipment is vital,  even in this day of containerization and air-freight systems.  Poor quality packaging can mean poor quality product,  costly delivery and storage,  and failure to meet legal requirements.

Once a letter of credit [LC] is issued and the beneficiary has had a chance to review the document,  the need for an amendment may become apparent.  Or perhaps the applicant realizes they made an error when they completed the application after the letter of credit has already been issued.  Whatever the circumstances may be,  it isn’t unusual for someone involved in a transaction to need to amend an existing letter of credit.

The buyer,  not knowing that an assignment of proceeds has been issued,  may be thrilled at the prospect of not having to pay their bank an examination fee under the LC and embrace the open account proposal.

The court also reversed the lower court’s finding that O’Hare Services and Channel Distribution were not liable,  and remanded the matter back for further proceedings to determine if they could be liable under Illinois law as bailees,  since there was evidence of very lax security precautions.

Similar to domestic expansion,  moving into international markets requires capital.  You need funds for inventory,  receivables and promotion activities.  In addition,  if you intend to open foreign branch offices,  you'll need cash for facilities and related operating expenses.

When potential customers have limited purchasing power,  the exporter may actually need to develop an entirely new product [innovation] designed to address the market opportunity at a price point that is within the reach of a potential target market.

In Intech,  Inc.  v.  Consolidated Freightways,  Inc.,  836 F.2d 672 [1st Cir.  1987],  the carrier had transported a machine and its accessories in two containers from California to Acton,  Massachusetts.  Upon arrival of the first container at the consignee’s facility,  there was a dispute as to who was responsible to unload the machine.  The container sat there for some six months before C.F.  finally came back and removed it.  Damage was discovered five months later,  when the consignee went to inspect the machine at C.F.’s yard.

If all goes according to plan,  the beneficiary arranges shipment,  obtains the documents necessary to draw against the LC,  presents these documents to the bank,  and the bank makes payment to both the beneficiary and to the holder of the assignment of proceeds.  Again,  this may sound like the perfect solution for the buyer,  broker/middleman and supplier,  but could something go wrong with this approach? Unfortunately,  yes.

Now that the supplier is holding the Assignment of Proceeds they may feel confident that they will receive payment and release the merchandise to the middleman/beneficiary.

Factors such as topography,  humidity and energy costs can affect the performance of a product or even define its use in a foreign market.

These are some brief notes on International Trade Management - 3

Dr.  S.  Maurer,  
MBA Professor

Industry trade associations are also useful,  as arë private consulting firms [such as Terence Barber's BHP Associates] and the business departments located within major universities.

In Intech,  Inc.  v.  Consolidated Freightways,  Inc.,  836 F.2d 672 [1st Cir.  1987],  the carrier had transported a machine and its accessories in two containers from California to Acton,  Massachusetts.  Upon arrival of the first container at the consignee’s facility,  there was a dispute as to who was responsible to unload the machine.  The container sat there for some six months before C.F.  finally came back and removed it.  Damage was discovered five months later,  when the consignee went to inspect the machine at C.F.’s yard.

Now that the supplier is holding the Assignment of Proceeds they may feel confident that they will receive payment and release the merchandise to the middleman/beneficiary.

'Made in America' is still a high-powered statement.  And the low value of the U.S.  dollar means that our goods are currently so cheap,  we have an even greater competitive edge.

Many of the same organizations that sponsor trade shows and fairs - such as the SBA,  manufacturer groups and government agencies - also sponsor trade missions to target countries that enable you to hear from local officials and meet prospective buyers.

If the consignee is to unload the trailer,  this is customary when deliveries are to be made after normal business hours when no employee of the consignee is on duty.  If,  however,  there is a watchman or guard on duty with authority to sign for deliveries,  the carrier should obtain that person’s signature to prove delivery.

Product adaptations may even include changes in one or more combinations of brand name,  color,  size,  taste,  design,  style,  features,  materials,  warranties,  after sale service,  technological sophistication and performance.

You should also consider after-sales requirements such as service,  customary business methods and established distribution channels in the markets you've targeted.  In indirect exporting,  rather than dealing with the customer or a foreign importer directly,  you may rely on the services of foreign sales representatives or agents [equivalent to a manufacturer's rep],  distributors,  retailers or government-controlled trading enterprises.

A product may have to be adapted in a number of ways to meet the physical,  social or mandatory requirements of a new market.  it may have to be modified to conform to government regulations or to operate effectively in country specific geographic and climatic conditions.  it may be redesigned or repackaged to meet the diverse buyer preferences,  or standard of living conditions.

In a survey of 328 of the U.S.'s fastest growing enterprises,  globally focused enterprises anticipated 1992 growth rates of 26.4 percent compared to 22.5 percent for firms that aren't involved in selling internationally.

If a country's standard of living is lower than that of the United States,  a manufacturer may find a market for less sophisticated product models that have become obsolete in the United States.

Documentation is important not only for the amount of additives,  but also the source of the product; secondary or indirect additives are also regulated in most countries.

Working with distributors or representatives can offer distinct advantages.  These individuals can often provide the initial contacts you need in a foreign country.  They have already established relationships with buyers of related items and know the local market,  which is important in any sales effort.

Well-drafted cover letters and informative,  well-designed product and enterprise brochures can be very effective in getting started in a targeted segment of an overseas market.  However,  given the cost of foreign mailings,  be conscious of the weight of your direct mail package.

Levels of expectation for product warranties vary from country to country depending on its level of development,  competitive practices,  and the activism of consumer groups,  local standards of production quality,  and differing usage frequency and patterns.

These are some brief notes on International Trade Management - 4

Dr.  S.  Maurer,  
MBA Professor

Some exporters bëlieve the domestic product can be exported without significant changes.  Others seek to consciously develop uniform products [global product design strategy] that are acceptable in all markets with little or mo modification.

Today,  the miracle of the marketplace - fax machines,  modems,  international 800 telephone numbers and credit cards - has brought a new accessibility.  The new technology enables small and medium-size organizations to move to areas where they can prosper as surely as people in the 1800s were able to move to new territories using barbed wire,  windmills and other technology of their times.

Engineering changes needed: Measurement Systems—specifications,  manuals,  instructions,  labels,  dimensions,  and parts may need to be converted to the metric system.

If a country's standard of living is lower than that of the United States,  a manufacturer may find a market for less sophisticated product models that have become obsolete in the United States.

On ramp-to-ramp rail traffic,  delivery by the railroad is completed when the railroad delivers the car to the destination ramp and notifies the consignee that the shipment is available for pick up.

When potential customers have limited purchasing power,  the exporter may actually need to develop an entirely new product [innovation] designed to address the market opportunity at a price point that is within the reach of a potential target market.

While many enterprises recognize the potential of the global marketplace,  the idea of taking it on can be extremely daunting.  Experts agree that the process starts with a deep commitment.  And with that commitment come resources of money,  time and effort to research markets,  learn about new cultures and create a strategic business plan that specifically addresses the new realities.

The great complaint of most exporters is distributors who are poised to hop aboard the fastest train and move whatever product is currently hot

However,  the savviest exporters manage to make the relationship work.

The commitment and expertise of the distributor are paramount to us, stresses Cenogenics owner Michael Katz.  Once we've found the right person,  the country is no longer difficult.  We have a guide through the maze.

Let’s imagine that the amendment appears to restrain the beneficiary.  For example,  the amendment might reduce the dollar value of the LC,  shorten the life of the LC by adding an expiration date,  or change the tenor of the LC from a sight draft to a time draft with no mention of who would pick up the expense of accepting or discounting the draft.

California has overseas trade offices in five countries and its State Department of Food and Agriculture and California Energy Commission [to name just two agencies] sponsor trade shows and offer financial assistance to prospective exporters.

The court also reversed the lower court’s finding that O’Hare Services and Channel Distribution were not liable,  and remanded the matter back for further proceedings to determine if they could be liable under Illinois law as bailees,  since there was evidence of very lax security precautions.

If you choose to sell your commodity directly,  you can market your goods through direct mail,  advertising and promotions in magazines with overseas circulation as well as in local publications and other media.

The international market average rate for the 90s has been two percent,  topping 2.3 percent under the best of circumstances

These numbers don't mean that the U.S.  isn't growing,  but rather that other countries are growing so much faster.

Now that the supplier is holding the Assignment of Proceeds they may feel confident that they will receive payment and release the merchandise to the middleman/beneficiary.