4 Competitive Advantage and the Strategy of the Multinationals PriceCompetitive AdvantageQuality
5 Export Strategy of the Firm-1 Exporting and importing are the most common modes of international business; and, one of the fastest growing activities in the worldWhy Export….Profitability-increase revenuesProductivity-achieve economies of scale, alleviate excess capacityDiversification-minimize risk and diversify markets
10 Export Import Process Ships Exporter Importer Bill of lading Receives paymentInformsPaymentOpens Letter of CreditReimbursementExporter’s BankImporter’s BankInforms
11 Types of Exports Documents Pro Forma Invoice: outlines the terms of sale, price, and delivery details, it is the basis for Commercial InvoiceShipper’s Export Declaration: used to monitor exports and compile trade statisticsBill of Lading: a detailed receipt from the carrier transporting the cargoConsular Invoice: required to monitor importsCertificate of Origin: determines the tariffExport Packing List: lists the cargo detailsCommercial Invoice: details of sale according to Pro Forma Invoice, it is legal document
21 Chapter 14: Discussion Questions Explain why firms export or import. What are their competitive advantages for export or import?Describe the export-import process and explain the role of various “export documentation” involved in the process.Who are the export/import intermediaries? Explain their role and functions in the export-import process.What are the common issues in exporting/importing? Explain.What is countertrade? What are the different types of countertrade? Why firms or governments engage in countertrade? Explain.