Chapter 14 - Exporting And Countertrade

Question 1

Global Sourcing, importing, global procurement or global purchasing

Answer 1

The strategy of buying products and services from foreign sources, for consumption in the home country

Question 2

Exporting

Answer 2

The strategy of producing products or services in one country, and selling and distributing them to customers located in other countries

Question 3

Countertrade

Answer 3

An international business transaction where all or partial payments are made in kind, rather than cash

Question 4

Contractual Relationship

Answer 4

A licensing or franchising agreement in which the firm allows a foreign partner to use its intellectual property in return for royalties or other compensation

Question 5

Equity-Based or Ownership-based International Business Activities

Answer 5

Activities involving foreign direct investment FDI and equity -based collaborative ventures where the firm establishes a presence in the foreign market by investing capital and security ownership of a factory, subsidiary or other facility

Question 6

Indirect Exporting

Answer 6

Exporting that is accomplished by contracting with intermediaries located in the firm’s home market

Question 7

Direct Exporting

Answer 7

Exporting that is accomplished by contracting with intermediaries located in the foreign market

Question 8

Company-Owned Subsidiary

Answer 8

A representative office of the exporter that handles marketing, physical distribution, promotion and customer service activities in the foreign market

Question 9

Importing, Global Sourcing, Global Procurement or Global Purchasing

Answer 9

Buying products and/or services from foreign sources and bringing them into the home market

Question 10

Documentation

Answer 10

Official forms and other paperwork required in export transactions for shipping and customs procedures

Question 11

Incoterms

Answer 11

Universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction, and at which point the buyer takes title to the goods

Question 12

Letter of Credit

Answer 12

Contract between the banks of a buyer and a seller that ensures payment from the buyer to the seller upon receiving an export shipment

Question 13

Multilateral Development Banks MDBs

Answer 13

International financial institutions owned by multiple governments within regions or other groups

Question 14

Barter

Answer 14

A type of countertrade that involves the direct exchange of goods without any money

Question 15

Compensation Deals

Answer 15

A type of countertrade that involves payment in both goods and cash

Question 16

Counterpurchase

Answer 16

A type of countertrade that involves two distinct contracts. In the first contract the seller agrees to sell its product at a set price and receives cash payment from the buyer. This first deal is contingent on a second contract wherein the seller also agrees to purchase goods from the buyer for the total monetary amount or a set percentage of the same

Question 17

Buy-Back Agreement

Answer 17

A type of countertrade that involves the seller agreeing to supply technology or equipment to construct a facility and receiving payment in the form of goods produced by the facility