Chapter 11 Flashcards
Small and medium-sized enterprises (SMEs):
Firms with fewer than 500 employees
Start-up companies:
Young firms that have only recently been formed
Entrepreneur:
Leader identifying opportunities and taking decisions to export them
Entrepreneurial team:
A group of people jointly acting as entrepreneurs
Exporters:
Sellers of products or services to another country
Importers:
Buyers of goods and services from another country
Direct exports:
The sale of products made by firms in their home country to customers in other
countries
Airway bill (AWL)
Document issued by and airline to certify receipt of merchandise. Contrary to B/L, it doesn’t entail a legal title to the products
Bill of landing (B/L)
Document issued by a courier or shipping company certifying that the merchandise has been delivered and paid for. Only the person holding the B/L has the right to claim the products
Letter of credit (L/C)
A document certifying that the importer’s bank will pay a specific sum of money to the exporter upon delivery of the merchandise
=> A Letter of Credit is a guarantee from the buyer’s (importer’s) bank that the seller (exporter) will get paid, as long as they meet the terms
CIF: Cost, insurance & freight
The seller pays all costs of transport, including insurance and freight
DDP: Delivery duty paid
The seller will deliver the goods to a specified place and pay the necessary customs duties
EXW: Ex works
Buyer has to pick up the goods from the seller’s specified factory or warehouse
FOB: Free on board
The seller delivers the goods on board a boat or train but doesn’t pay for the transport
Indirect exports:
A way for SMEs to reach overseas customers by exporting through domestic-
based export intermediates
Export intermediates:
A firm that performs an important intermediary function linking sellers and
buyers overseas
Sales agent:
Intermediaries receiving commission for sales
Distributors:
Intermediaries trading on their own account
Cross-border services:
Supplying services across national borders
Servicing foreign residents:
Supplying services to customers coming from abroad
Licensing:
A contract by which a firm allows another form to use its intellectual property rights in
return for a fee
Licensor:
The company granting a licence
Licensee:
The company receiving licence
Franchising:
A contract by which a firm allows another firm to use its branded service or
products in return for a fee
=> Next to the core product pr service, franchising may encompass trademark, marketing strategy, operation manuals, or quality control procedures
=> Franchising typically covers entire business concepts
Turnkey projects:
Projects in which clients pay contractors to design and construct new facilities and train personnel
Design-and-build contract:
A contract combining the architectural or design work with the
actual construction
Build-operate-transfer:
A contract combining the construction and temporary operation of a
project eventually to be transferred to a new owner
Consortium:
A project-based temporary business owned and managed jointly by several firms
Subcontracting:
A contract that involves outsourcing of an intermediate stage of a value chain
R&D contract:
A subcontracting of R&D between firms
Management contract:
A contract over the management of assets or a firm owned by someone
else
Experimental knowledge:
Knowledge learned by engaging in the activity and context
Uppsala model:
A model of internalisation processes focusing on learning processes
=> gradual learning-based internalisation
=> internalisation is a process of incremental decisions
=> Provides a good explanation of patterns of internalisation in the 1950s to 1980s
=> Internalisation is a dynamic process of learning
Network internalisation model:
A model of internalisation that focuses on the international
growth of business networks
=> expand abroad through relationships and networks, rather than just through firm size, resources, or market knowledge
Building resources for international business
=> Traditional processes
- Experimental learning and knowledge acquisition
- Network building and exploitation
Building resources for international business
=> Accelerated process
- Recruiting an entrepreneurial team with international experience
- Learning by importing and partnering with inward foreign investors
- Learning from others operating in the same foreign country
- Acquiring resources in the foreign country, possibly entire firms
Stages model:
Models depicting internalisation as a slow stage-by stage process an SME must
go through
International new venture:
Start-up company that from inception, seeks to derive significant
competitive advantages from the use of resources and the sale of outputs in multiple countries
International experience:
Personal experience of living in another country
Immigrant entrepreneurs:
People who set up a business after migrating to another country
Mimetic behaviour:
Imitating the behaviour of others as a means to reduce uncertainty
E-businesses:
Businesses that create and coordinate the value chain of their business online
Digital platform:
Online space where potential buyers and sellers can meet
A wide variety of contracts is available to combine different transfers of goods, services and
rights, including:
(1) licensing,
(2) franchising,
(3) turnkey projects,
(4) subcontracting and
(5) management contracts
Tender
A competition for a major contract
=> A tender is a formal process where organizations (usually governments or large companies) invite suppliers or contractors to submit bids to win a project or supply goods/services.
