© 2011 South-Western | Cengage Learning Importing, Exporting, and Trade Relations 6-1 Importing Procedures 6-2 Exporting Procedures 6-3 Importance of Trade Relations 6-4 The Nature of Competition CHAPTER 6

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 2 6 LESSON 6-1 Importing Procedures GOALS Explain the importance of importing. Identify the four steps for importing.

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 3 6 Importance of Importing Product demand Lower costs Production inputs

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 4 6 Importing Activities STEP 1: Determine demand STEP 2: Contact suppliers STEP 3: Finalize purchase STEP 4: Receive goods

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 5 6 Import Assistance Customs and Border Protection (CBP) Food and Drug Administration (FDA) U.S. Department of Agriculture (USDA)

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 6 6 LESSON 6-2 Exporting Procedures GOALS Identify the steps of the exporting process. Describe the exporting of services.

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 7 6 The Exporting Process STEP 1: Find potential customers STEP 2: Meet the needs of customers STEP 3: Agree on sales terms STEP 4: Deliver products or services STEP 5: Complete the transaction

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 8 6 Sales Terms Free on board (FOB) Cost, insurance, and freight (CIF) Cost and freight (C&F)

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 9 6 Export Documents Bill of lading Certificate of origin

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 10 6 Obstacles to Exporting No company representatives in foreign countries Products not appropriate for foreign consumers Insufficient production facilities to manufacture enough goods for exporting High costs of doing business in other countries Difficulty understanding foreign business procedures Difficulty obtaining payment from foreign customers

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 11 6 Commonly Exported Services Hospitality Hotels, food service Entertainment Movies, music, television production, amusement parks Financial services Insurance, real estate

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 12 6 LESSON 6-3 Importance of Trade Relations GOALS Identify the economic effects of foreign trade. Describe the types of trade agreements between countries.

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 13 6 The Economic Effect of Foreign Trade Balance of trade Trade deficit Trade surplus Balance of payments Positive, or favorable Negative, or unfavorable

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 14 6 Trade Agreements Promote economic development Encourage international business activities

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 15 6 The World Trade Organization Deals with rules of trade between nations Helps producers of goods and services, exporters, and importers conduct their business Encourages international trade

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 16 6 Regional Cooperation Economic community Common market

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 17 6 Barter Agreements Direct barter Countertrade

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 18 6 Free-Trade Zones An area designated by a government for duty-free entry of nonprohibited goods Commonly located at a point of entry into a nation

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 19 6 LESSON 6-4 The Nature of Competition GOALS List factors that affect international business competition. Explain the types of competitive market situations.

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 20 6 International Business Competition Factors affecting competition Number of companies Business costs Product differences Benefits and concerns of competition

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 21 6 Types of Competitive Situations Pure competition Monopolistic competition Oligopoly Monopoly

INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 22 6 Competitive Market Situations Monopolistic Competition ●Many sellers ●Slightly different product Oligopoly ●Few sellers ●Slightly different product Pure Competition ●Many sellers ●Same product Monopoly ●One seller ●Usually government regulated