1 / 18

Chapter 13: Export-Import Management

Chapter 13: Export-Import Management. TOPIC PLAN. Negotiation of an international sale Main methods of payment Trade finance techniques Credit, factoring, forfeiting, counter trade Australia’s exporters Export management in a multinational company Exports of Small and Medium enterprises.

calais
Download Presentation

Chapter 13: Export-Import Management

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 13: Export-Import Management

  2. TOPIC PLAN • Negotiation of an international sale • Main methods of payment • Trade finance techniques • Credit, factoring, forfeiting, counter trade • Australia’s exporters • Export management in a multinational company • Exports of Small and Medium enterprises

  3. Major steps in the negotiation of an international sale 1.Enquiry Exporter in Country B Exporter in Country A 2. Quotation/Offer 3. Order 4. Order Acceptance/ contract

  4. INCOTERMS • Incoterms 2000 • EXW – Ex-Works • FCA- Free Carrier • FAS- Free Alongside Ship • FOB-Free on Board • CFR-Cost and Freight • CIF- Cost, Insurance and Freight

  5. The four contractual relationships • 1. The International Sale of Goods Contract • Exporter and Importer • 2. The Letter of Credit (L/C) • Importer and the Importer’s bank • 3. The Bill of Lading • Carrier and Exporter( under CFR/CIF) or with the Importer (under an FOB sale) • 4. Insurance contract • Insurance company and Exporter (CIF) and Importer (CFR/CIF)

  6. Export Marketing issues • Channels of distribution • National market:producer-export agent-import agent-major wholesaler-small wholesaler • Modus operandi is different • Pricing • (1) requiring prices in export markets that yield higher returns that are available in domestic markets • (2) “one-price” strategy • (3)pricing to yield lower returns, at least in the short run • (4) pricing to sell production in excess of the domestic needs

  7. Trade financing-Methods of Payment • Cash in Advance • Documentary letters of credit • Revocable credits • Irrevocable credits • Confirmed credits • Draft(bill of exchange): the instrument normally used in international commerce to effect payment. • Drawer (“Maker”) and Drawee • Sight drafts and time drafts

  8. European Importer AUSTRALIAN EXPORT SALE TO EUROPE € European Bank L / C ANZ BANK Aussie Exporter

  9. TRADE FINANCING:Bank finance • Credit to importer • Supplier credit (by the exporter) • Buyer credit(directly to the foreign buyer) • Short term (up to 2 years) • Medium term (2-5 years) • Long-term (over 5 years)

  10. Trade Financing: Non-Bank Finance • Government loans and guarantees(Export credit insurance):EFIC,COFACE etc. • Factoring • Factor buys export receivables at a discount of 2-4% Exporter -ultimately liable in case of default. • Forfeiting • Non-recourse export finance • Guarantee (avail) from the importer's government • Counter trade

  11. COUNTERTRADE • Main forms • Barter • Counter purchase • Buyback(Compensation) • Offsets(Local content) • Pro-active vs. Reactive counter trade • Disadvantages:Time-consuming;Costly

  12. Government Loans and Guarantees • Export credit insurance-guarantee programs • France-over 20% of exports • Japan-low interest loans to export companies • Brazil-favourable exchange rates to exporters • US-EXIMBANK • "Mixed credit"

  13. Australian Exporters • Small size by international standards • Top 50 Australian exporters(Median:US $300m) • Top 50 US exporters(Median :US$ 1.3billion.) • Primary products dominate the top 50 placings. • ETM’s: the fastest growing export sector. • 150 “born-global” ETM exporters • Foreign ownership plays a dominant role

  14. Selected indicators regarding the top 50 exporters in Australia and Canada

  15. Export Management for the MNE • More international options(exports & foreign production) • Exports of complete products or only parts • Changes in Foreign business strategy(Step 5-Bus.plan) • Exports to MNEs affiliates • Choice of foreign currency • Transfer pricing • More local market knowledge than non-MNE's

  16. SME's in global business activities • Worldwide:37,000 transnational enterprises with over 205,000 affiliates. • Contribution of SME's to nation's exports • Taiwan : 60 % • Denmark : 50 % • Sweden : 30 % • France : 26 % • AUSTRALIA :< 10 %

  17. Australia's Small and Medium Enterprises • Total number of Australian SME's :about 530,000 • Internationalised Small and Medium Enterprises(ISME'S) • Number of ISME's: at least 4,500 • International turnover:A$ 6.5 b. • Direct domestic employment : ab.40,000 • Over 20 % of turnover from global operators • Active in at least 5 countries(mainly SE Asia).

  18. IMPORT MANAGEMENT • Importing-neglected aspect of international business strategy • Importing channels-Direct and Indirect • Importing-part of the purchasing function • MNE imports from off-shore manufacturing affiliates

More Related