Parties And Their Roles Flashcards
PESTLE Model
Political Economic Social Technological Legal Environmental
Used to assess the impact of external factors that affect a business and the market in which it operates
Factors to consider before entering into an overseas market
Freight forwarders
Those that manage the movement of goods internationally using the appropriate mode of transport
Also provide services such as Warehousing Final assembly and packaging of goods Managing customs requirements Documentation services for documentary collection and credits
Types of intermediaries
Export management companies
They will act as the export department for the seller and are set up to provide a whole range of services
They will have expertise in product or market and could provide immediate payment to seller or arranging financing
Disadvantage is seller might lose control of marketing and sale of goods
Types of intermediaries
Trading houses
Export trading houses will purchase the goods directly from the manufacturer and sell them on in an overseas market
They are often product or market specific
Manufacturer will lose all control but advantage is additional sales are generated
Types of intermediaries
Confirming houses
They are firms commissioned by a foreign buyer to find products from the country of the seller
Some instances government agencies or quasi government firms are its clients
Offer guarantee of payment for seller on behalf of the buyer
Export credit agencies might fulfill this role
Types of intermediaries
Buying agents
Will be employed whose responsibility is to look for products and buy for their respective companies or clients
Sales countries might be subject to the home countries law agent is based in
Types of intermediaries
Co-marketing
Arrangement which one manufacturer agrees to distribute a second firms product or service
When supplying company of contract may not have capabilities to fulfill the whole of the contract, it will turn to other domestic companies to provide the remaining products
Agents
A third party appointed by the exporting company to act on its behalf to market snd sell its products or services in a particular geographical territory or industry sector
Normally self employed so more sales generated more commission earned
Exporting company will have some control of who its goods are sold to and at what prices
Distributor
Fulfills a similar role to an agent with the main difference that the distributor usually makes an outright purchase of the goods and then sells them on again in a specified territory at a profit
The seller/export company has less control of goods, however distribution agreement can provide some protection
Nostro and vostro accounts
System that allows settling between banks financially in respect of such payments when different currencies are involved
Nostro means ours
Vostro means yours
Bank will maintain its own record of the nostro account known as Mirror account and will reconcile the bank statement against these mirror accounts
BIC & IBAN
Bank Identifier Code
International Bank Account Number
MLDLGB22123
BIC consists of a bank code(MLDL) a country ISO code (GB) and a branch identifier number (22123)
GB15MLDL40051512345678 Country code(GB) a check digit (15) bank code (MLDL) sort code (400515) account number (12345678)
STP
Straight through processing
A system where a transaction is processed by automated systems with minimal human intervention
RTGS Real Time Gross Settlement
A payment system that transfers and settles payments between banks electronically in real time(instantaneously) and on a one-to-one basis
Once sent irrevocable
CHAPS system solicitors use for property purchase in Europe which involves a linkage between the RTGS systems of each European country system called Target 2
Target 2 provides direct payment within Europe without the involvement of the member countries own RTGS system
CLS CONTINUOUS LINKED SETTLEMENT
Name of an institution owned and operated by banks engaged in large multi currency interbank settlements of money owed to other CLS participants. Particularly for intra-day(same day) foreign exchange transactions
Benefits for participant banks are
Elimination of settlement risk
Cost efficiency
Ease of management for the department of the bank that reconciles payment made and due
