Capitulo 13 International Business

Chapter 13: Import and Export Strategies

• International trade through import and export is an important method of participation in the global economy. In the last decades, the most of the countries have been increasing their importations and exportations.

• Both methods have low risks, require few resources and increase the market’s flexibility.

Exportation

• Sale of goods or services produced by a company based in a country to people that reside in other country. Ex: Toyota, Japanese producer, sells cars to Russian customers. Here Japan is the exporter and Russia is the importer.

• The exportation include goods, services, or even intellectual property.

• There are case that the product does not have to get out of the country to be an exportation. An example of that is the education, exchange students.

• Is important to consider the difference between exportation and foreign investment. Opening a Starbucks is not an exportation because the foreign country is owner of a part of the Starbucks. Because of that, this case is a foreign investment.

→ Who are exporters? There are 3 types:

• Occasionally exporters: they don’t see this as essential in their business strategy.

• Regular exporters: They see this as an improver of productivity and strategy. They want to export.

• No exporters: They don’t know or don’t care about it.

→ Question to ask before export:

• What do we want to gain?

• Is consistent with our goals?

• Does it fit with our value chain?

• Are the projected benefits worth the costs?

→ Characteristics of successful exporters:

• Key competence, competitive prices, efficient production, and marketing management.

→ Why export?

• Profits: A company can sell products more expensive in a foreign market than in the local one.

• Productivity: Exportation improve the efficient, scale effects.

• Diversion: Improve the adaptation to the market and reduce the vulnerability of lose local customers.  

→ 2 versions of exportation:

1) Incremental internationalization: for that kind of countries is so important to consider the physical distance, culture and market similarities. As more similarities has a country to another, low risks they are facing with the business.  Slowly they are learning and making business with other countries not that similar.

2) Born global companies: These companies start with international business without doubts because of the technological opportunities of the country, or the worker’s knowledge.

* There also exist the role of serendipity: Accidental exporters that because of fortuitous situation found success in the exportation.

→ Pitfalls of exporting:

• Dealing with: - Financial management

                            - Customers demand

                            - Communication technology

→ Design an exportation strategy:

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