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Summary Introduction of export History Process and actors Why export? Advantages of exporting Disadvantages of exporting Ways of exporting Barriers Making decision Comparison of countries
What is export? Goods produced in one country are shipped to other markets Ship the goods and services out of the port of a country Foreign demand for goods produced by home country
Additional information Export vs. Import Exporter X Importer For many industries of all sizes, small, medium and big Domestic producer foreign consumers The most common way of serving international markets
History The oldest branches of economic thought Major component Regularly discussed and disputed two views of int. trade recognizes the benefits of international trade certain domestic industries (or laborers, or culture) could be harmed by foreign competition.
Process Methods of export include a product or good or information being mailed hand-delivered, shipped by air or vessel, uploaded to an internet site, downloaded from an internet site. Exports also include the distribution of information that can be sent in the form of an email, an email attachment, a fax or can be shared during a telephone conversation
Actors Exporter (individuals or businesses) Banks Ministry of Foreign Trade Customs Administration Customs Transport Agent
Why export? Increase Sales extend the market (increase in Global Competition) respond to overseas buyers lengthen a product´s life cycle Minimize competitive risks Diversify sources of sales and supplies Avoid changing domestic conditions turn to different markets
Advantages of exportEnhance domestic competitivenessIncrease sales and profitsGain global market shareExploit corporate technology and know-howExtend the sales potential of existing productsStabilize seasonal market fluctuationsEnhance potential for corporate expansionSell excess production capacityGain information about foreign competition
Disadvantages of exportDevelop new promotional materialSubordinate short-term profits to long-term gainsIncur added administrative costsAllocate personnel for travelWait longer for paymentsModify your product or packagingApply for additional financingObtain special export licenses
Ways of Exporting Direct exporting The exporting company may create a separate export department to enable its own staff to concentrate on Indirect exporting developing new markets abroad Is an independent firm that acts as the export department of the company A combination export manager A manufacturer´s export agent
Direct exporting Representatives, distributors, or retailers who are located outside the exporter´s home country Direct exports are goods and service Direct selling through distributors Direct selling through foreign retailers and end users Direct selling over the Internet
Indirect exporting selling goods to or through an independent domestic intermediary customers foreign markets
Barriers Trade barriers are defined as: government laws regulations protect domestic products policy from foreign competition or stimulate exports practices Strategic Tariffs Subsidies
Barriers Strategic international agreements limit trade in, and the transfer of, certain types of goods and information Tarrifs tax placed on a specific good or set of goods exported from or imported to a country Subsidies subsidize an industry or company from government
Making the export decision What does the company want to gain from exporting? Is exporting consistent with other company goals? What demands will exporting place on the companys key resources management and personnel production capacity Finance Are the expected benefits worth the costs, or would company resources be better used for developing new domestic business?
Country comparison: ExportsRank Country Exports / $ 1. China 1,904,000,000,000 2. United States 1,497,000,000,000 3. Germany 1,408,000,000,000 4. Japan 788,000,000,000 5. France 587,100,000,00032. Czech Republic 138,500,000,00055. Colombia 56,220,000,000