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Importing and ExportingJohn Beasley
TMGT 7500 - 01
Introduction To International BusinessAs a Manager You Must Understand the Cultural Context of a Region or County Before You Can Understand How Business Operates in a Given Economy.
Business In A Cultural ContextA Cultures Story Defines the Rules for Social Engagement and Social Standing Within That Society. The Story Largely Determines the Distribution of Wealth in That Culture.(Example: Function of Roman Catholic Church in the Roman Empire was to define Universalism - Platos Republic).
The Social ProcessGo From Outside the Group Behavior is viewed as Dysfunctional (Indoc) Enter a Conversion Experience. Go From Outside The Group, To Inside The Group. (Pavlovs theories on conversion)Assimilation memorize the story. Live the story.
Business In Cultural ContextExamples:CULTURE CONTROLING STORYClassical Greece: Homers Iliad and OdysseyRoman Empire (Commonwealth): Virgils Aeneid. Jewish Culture: Torah Christian Culture: Bible Islamic Culture: Koran Japanese: ZEN - Mahayana Suturas ( koans - Sound of One Hand Clapping)(Alfred North Whitehead, Process and Reality)Maritime: Boatswains PipeChina: Chairman Maos Little Red Book(Sin/guilt Based Cultures Vs. Shame/honor Based Culture)
Theories On TradeMercantilism Economic NationalismGlobalization
Mercantilism NationalismBalance of trade in favor of exportsA system of tarriffs and subsidies(According to John Locke the problem with this system is the hording of assets. Utilitarianism = Epicureanism as presented by Lucretius 50 B.C.)
MercantilismSome Other Systems That Do Copy Several Mercantilist Policies, Such As Japan's Economic System, Are Also Sometimes Called Neo-mercantilist. In an Essay Appearing in the 14 May 2007 Issue of Newsweek, Economist Robert J. Samuelson Argued That China Was Pursuing an Essentially Mercantilist Trade Policy That Threatened to Undermine the Post-world War II International Economic Structure (Wikipedia Encyclopedia, Mercantilism)
Economic NationalismExport Dominated PhilosophyMake More Than They SpendProduce More Than They ConsumeExport More Than They Import(Weigh the Utility Value of Assets, Enlightened Mercantilism)
Germany, Japan, Hong Kong, South Korea, Taiwan, Singapore, China
GlobalizationIntegration of National Economies Into the International Economy Through: TradeForeign Direct Investment Capital FlowsMigration of Technology(Globalization is utilitarian colonialization)
Exodus Of Capital1997-98 Asian Stock Market CrashedOpportunity to Move Capital (P/E Ratio, P/B Ratio)
Exodus of U.S. Flagged ShipsExodus of Manufacturing Exodus of Capital
ExportingDirect MarketingIndirect Marketing
DirectLimited Exposure Opportunity to Test MarketA Learning Experience Greater Control Over Process U.S. Producer Deals Directly With Foreign Buyers Generally Higher Profits
Indirect SellingUses Local Intermediary Export Management Company (EMC)Export Trading Company (ETC) U.S. Producer Has No Contact With Foreign Buyers
Direct Or Indirect?A Major Factor in Determining to Use Direct or Indirect Selling Is Available Resources. In the Early Period It Is Common to Have Common Management Between Domestic and Exported Sales (HBS, P 2) (Do you understand the culture, do you have the capital?)
Cooperative Contractual RelationshipsFirms Derive Income From Providing Services Such As Technology, Expertise, Resources, Engineering, Design, and Perhaps a Trade Name.
Cooperative Contractual RelationshipsExample: In the early 1960s Kieser Manufacturing Hutson-Willis (JEEP) designed engines for Renault (France) for the South American market. Rambler-Nash merged to form American Motors Corporation (AMC) and in the process acquired Willis Jeep.
Licensing Is When a Company Sells the Rights to Produce and Market Its Products in a Foreign Market (HBS, P. 3)
Licensing Example: Rambler Licensed the Production of Rambler Rebels in Argentina to Renault. The Car Becomes the Torino, a Best Seller in Argentina for About 20 Years Until the Mid 1980's.
Franchising Typically a Business System Is Sold or Franchised to a Franchisee (HBR, P. 3). It Is Popular in Many Service Industries Such As Restaurants, Auto Parts Houses, Auto Repairs, Tire Stores, Appliance Stores, Hardware Stores, Florists, Shoe Stores, Coffee Shops, Donut Shops, Glasses, Beauty Salons, Health Food Grocery Stores, and Vitamin Shops.
SubsidiariesA Major Type of Investment Is to Produce a Subsidiary Company in a Foreign Market. Overcomes Import Restrictions Greater Market Penetration Spreads R&D Expenses Over Larger Sales Large Financial and Management Requirements
(HBR, P. 3).
Strategic Alliances Joint Ventures
Example: In the 1970s Renault Began Designing Cars for American Motors (Rambler). By the 1980s Renault Began Selling R5s and R9s (Alliance) Through AMC Dealerships. Renault Bought a Financial Interest in AMC.
Intellectual property and concepts Microsoft Patents
Physical property and their designsEdison Film Studios
Sources of Export Assistance U.S. Department of Commerce45 District Offices Advice on Industry, Countries, Finance Book: Basic Guide to Exporting Book: Exporters Guide to Federal Resources for Small Business (SBA)
Sources of Export AssistanceInternational Trade Administration World Traders Data ReportProvides Background Information on Importers and Exporters Worldwide.Agent Distributor Service (ADS)Does Searches for Overseas Agents and Distributors for Your Type of Product.National Trade Data Bank (NTDB)CD Providing - Market Research, Statistics, Foreign Traders Index.
Sources of Export AssistanceInternational Trade Administration
Basic Guide to Exporting 150 Page Guidebook on Exporting, Shipping, Payment Methods, Documentation, And Marketing Tips. Advertising Services Through the Commercial News USAMonthly Journal on ExportingTrade Opportunities Program Officers in 65 Embassies Around the World to Assist Exporters.
Sources of Export AssistanceInternational Trade Administration
Commercial Information Management System 3500 Marketing Research Reports About World Export; DemandTrade Barriers Profiles of BuyersTrade Events and ShowsCompetitionLabor and Trade Data Custom Sales Survey
Sources of Export Assistance
Custom Sales Survey The Commerce Department Will Provide a Marketing Potential Survey for Your Company. Is There a Market for the Product?Cost, Competition, Price, Place, Promotion Available Marketing ChannelsConsumer Survey, (Price, Quality, Availability, Service) What Is the Best Process for AdvertisingWhat Are the Barriers to Entering the Market?Who Might Carry or Represent the Product?Any Opportunities for Joint Ventures or Licensing?
Sources of Export AssistanceExport-import Bank USAThe Eximbank Helps US Companies to Compete Against Foreign Government Subsidized Financing in Foreign Markets. Lending Program Guarantee Program Working Capital Program Insurance
Sources of Export AssistanceSmall Business Administration (SBA)Field Offices Provide; Counseling Referral to Assistance Programs Initial Attorney Consultation International Trade and Export Business Management Training
Sources of Export AssistanceUS Department of Agriculture (USDA)The U.S. Remains the Worlds Largest Exporter of Agricultural Items. All of These Services Are Also Available to Agricultural Firms.
Import ExportAlmost every nation offers some form of assistance in exporting, an exporting kit. If you intend to do import export one of the most important things you can do is get these manuals from a number of countries; Turkey, Holland, Germany, Japan, China and compare their packages.
Toynbee, Arnold, A Study of History, Abridged, Oxford University Press, Oxford, 1972
Erikson, Erik H., Childhood and Society, W.W. Norton & Company, New York, 1963See Also Karl Jaspers Social Development Theories. When Karl Jaspers Refers to Second Level Shame Based Societies and Third Level Sin Based Societies, He Is Likely Referring to Erik Eriksons Eight Stages of Development, the Eight Ages of Man. This Is Not Defined Within Jaspers Work.
Karl Jaspers, Way to Wisdom, (Yale University Press, New Haven, Conn., 1960) Pp.99-103
Alfred North Whitehead, Process and Reality, (Free Press, New York, New York, 1979) P. 39
BibliographyDigby Ditzell, The Protestant Establishment: Aristocracy & Caste in America, (Random House, New York,1964) Pp. xi - Xii
NOTE: Everything I Have Defined Here Holds True for Western Societies, Not for Eastern Societies. In Western Culture Story Conquers Chaos, Story Defines Society. (I Would Call These Define the System Societies.)In Eastern Culture Story Shields One From Ultimate Reality or Wholeness, the Reality of What Is Actually Happening. (China, Japan, Korea) (I Would Call These Cut the Bullshit, What Is Actually Happening Societies.) Two Opposite Ways of Processing Reality.
BibliographyOutline of Mercantilism
That Every Inch of a Country's Soil Be Utilized for Agriculture, Mining or Manufacturing.That All Raw Materials Found in a Country Be Used in Domestic Manufacture, Since Finished Goods Have a Higher Value Than Raw Materials.That a Large, Working Population Be Encouraged.That All Export of Gold and Silver Be Pro