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International Business | 3P98 > Chapter 14 > Flashcards

Chapter 14 Flashcards

Export and Import

1
Q

Ownership advantages

A

the firm’s core competencies

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2
Q

Location advantages

A

the combination of sales opportunity and investment risk that creates favourable locations in foreign markets

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3
Q

Internalization advantages

A

reflect companies’ response to market imperfections that often create uncertainties

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4
Q

Direct exporting

A

involves independent representatives, distributors, or retailers outside of the exporter’s home country

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5
Q

Indirect exporting

A

products are sold to intermediory in the domestic market, which then exports them

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6
Q

Service exports (invisibles)

A

are intangible products

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7
Q

Types of exporters include:

A
  • sporadic exporter
  • regular exporter
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8
Q

Ownership advantages of the company

A

location advantages of the market, and internalization advantages from controlling transactions shape how firms enter foreign markets

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9
Q

Resource-constrained or risk-averse companies

A

that have strong ownership advantages often foreign markets through export

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10
Q

A firm’s characteristics moderate its export activity

A

Size matters, but often management commitment, productivity, innovativeness, and cost structure matter more

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11
Q

Reasons to import

A
  • Specialization of labour
  • Global rivalry
  • Local unavailability
  • Diversification
  • Top management’s outlook
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12
Q

Exporting helps all types of companies

A
  • increase profitability
  • improve productivity
  • diversify risk
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13
Q

Importing and Exporting: Problems and Pitfalls

A
  • Financial risks
  • customer management
  • Lack of international business experience
  • Marketing challenges
  • Top management commitment
  • Government regulation
  • Trade documentation
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14
Q

Incremental internationalization

A

The view that as a company gains experience, resources, and confidence, it progressively exports to increasingly distant and dissimilar countries

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15
Q

Two view of export shape interpretation:

A

the deliberate, sequential dynamic of incremental internationalization and the instant-internationalization of the born-global

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16
Q

Progressively gaining experience in successfully dealing with increasingly dissimilar markets

A

encourages managers to expand their international horizon

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17
Q

Born-globals, owing to their executives’ international orientation and improving technological options

A

begin trading internationally at inception

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18
Q

An Export Plan

A
  1. Executive Summary
  2. Company Description
  3. Product/Service Description
  4. Foreign Marketplace Analysis
  5. Market Entry Strategies
  6. International Law
  7. Financial Analysis
  8. Risk Management
  9. External Assistance
  10. Implementation Schedule
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18
Q

Countertrade

A

different arrangement that parties use to trade products via transactions that use limited or no currency or credit

19
Q

Trends indicate increasing interaction between

A

the incremental-international and born-global perspectives

19
Q

Exporters are often proactive decision-makers

A

Sometimes, however, serendipity-marking fortunate discoveries by accident-initates export activity

20
Q

Exporting directly involves

A

independent representatives, distributors, or retailers outside of the exporter’s home country

21
Q

Indirect exports

A

are products sold to an intermediary in the home market, which then exports those products to end users in other countries

22
Q

Several factors shape an SME’s preferred approach to export

A

notably its mix of ownership, location, and internalization advantages

23
Q

Imports and exports

A

are the foundation of international trade

24
Q

A service import is

A

a service transaction that does not result in ownership and is rendered by nonresidents to residents

25
Q

The specialization of labour

A

is a powerful tool to improve productivity. It benefits the import potential and performance of SMEs and large firms

26
Q

There are 3 general types of importers:

A
  • Optimizers
  • Opportunism
  • Arbitrageurs
27
Q

In principle, arbitrage is the simultaneous

A

buying and selling of the same product in different markets to exploit differences in price

28
Q

Common barriers to trade

A
  • Operations
  • Strategic
  • Financial
  • Governmental
  • Documentation
29
Q

SMEs regularly rate financial constraints

A

as the most daunting barrier to trading internationally

30
Q

Governments require international traders to

A

thoroughly document trade transactions

31
Q

Firms often find themselves in situations where 3rd party assistance

A

influences the productivity and profitability of their international activities. They can enlist aid from various public or private agents

32
Q

In the US, as in most countries, public agencies

A

help firms initiate and develop exports and imports

33
Q

Trade intermediaries are

A

third parties that provide exporters a variety of services

34
Q

Many EMCs are entrepreneurial ventures that

A

specialize by product, function, or market area

35
Q

The US exempts ETCs from antitrust provisions

A

thereby permitting competitors to combine forces in foreign markets

36
Q

Freight forwarders

A

the largest export/import intermediary in terms of value and weight of products shipped internationally

37
Q

ETCs operate based on

A

demand rather than supply. They identify suppliers who can fill orders in overseas market

38
Q

A freight forwarder specializes

A

in moving goods from sellers to buyers

39
Q

A 3PL is a trade intermediary that

A

applies sophisticated technologies and systems to supervise trade logistics

40
Q

A customs broker helps an importer navigate the regulations imposed by customs agencies. It helps importers in matters of

A
  • valuation
  • qualification
  • deferment
  • liability
41
Q

Enlisting the support of a trade intermediary requires

A

the trader surrender some degree of operational control

42
Q

Going international imposes many demands that, collectively, influence

A
  • resource allocation
  • executive effectiveness
  • operational flexibility
  • financial stability
  • decision-making
43
Q

Countertrade is an umbrella term for several sorts of trade transactions

A

such as bater or offset, in which the seller accepts goods or services, rather than currency or credit, as payment

International Business | 3P98 (13 decks)

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