Export Finance and Risk Management

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Questions and Answers

What is one primary objective of quality control in exports?

Ensuring compliance with legal regulations

Maximizing production speed

Maintaining standards of quality (correct)

Reducing overall production costs

Which institution provides export credit insurance in India?

Export Credit Guarantee Corporation (correct)

Export-Import Bank of India

Indian Insurance Regulatory Authority

Foreign Trade Development Council

Which component is NOT associated with international marketing?

Local market analysis (correct)

Global electronic supply chain

E-marketing

Targeting individual customers

What are the 4Cs of negotiation in international trade?

Communication, Cooperation, Collaboration, and Compromise Signup and view all the answers

Which factor is a determinant of India's exports?

Global market demand Signup and view all the answers

Which of the following is a key feature of services trade?

Intangible nature of services Signup and view all the answers

What is one of the stages of negotiation in international trade?

Initiation Signup and view all the answers

What type of assistance do export houses typically provide?

Marketing assistance Signup and view all the answers

What does the BRIC Report predict about the economies of China and India by the end of the current century?

China will be the largest economy and India the second largest. Signup and view all the answers

Which of the following countries is NOT part of the Next Eleven (N-11) identified by Goldman Sachs?

Brazil Signup and view all the answers

How is international marketing best defined according to Walsh's perspective?

The marketing of goods and services across national frontiers. Signup and view all the answers

What does international marketing encompass other than just international trade?

Marketing operations of organizations within a single country. Signup and view all the answers

According to the definition provided in the content, what is a characteristic of international marketing?

It can influence or control marketing activities from outside the country. Signup and view all the answers

Which statement best describes the final definition of international marketing provided in the content?

Marketing in an internationally competitive environment. Signup and view all the answers

Which of the following factors indicates the growing importance of developing countries in the global economy?

Surge in attention from multinational corporations. Signup and view all the answers

What aspect does international marketing highlight compared to traditional marketing?

The global outlook and market strategies of a company. Signup and view all the answers

What type of differences can create challenges for international marketers?

Political differences Signup and view all the answers

What is a common problem arising from language differences in international marketing?

Misunderstandings due to varied meanings of terms Signup and view all the answers

Which of the following is NOT considered a challenge faced by international marketers?

Uniform marketing practices Signup and view all the answers

Which factor denotes reasons that pull businesses toward foreign markets?

Pull factors Signup and view all the answers

How does economic environmental variability impact international marketing?

Variations can affect pricing and product demand Signup and view all the answers

Which challenge is associated with differences in marketing infrastructure?

Availability of effective marketing mediums varies Signup and view all the answers

What challenges do international marketers face due to trade restrictions?

Imposed limits on the quantity of imports Signup and view all the answers

Which of the following can lead to high costs in international marketing?

Geographic distance between markets Signup and view all the answers

What is one primary objective of a business when it chooses to internationalize?

Profit advantage Signup and view all the answers

What are push factors in the context of international business?

Compulsions of the domestic market Signup and view all the answers

How can international business increase the total profit of a company?

By supplementing domestic profits through foreign sales Signup and view all the answers

What is one reason companies might choose to move parts of their production abroad?

To benefit from cheap labor Signup and view all the answers

What does the North American Free Trade Agreement expect to encourage?

Relocation of production to Mexico Signup and view all the answers

What is a significant growth opportunity that attracts foreign companies to developing countries?

Rapid population and income growth Signup and view all the answers

How might international business affect the costs of domestic production?

Can lead to decreased average unit costs Signup and view all the answers

What can result from a company generating more than 100% of its total profits from foreign markets?

Losses in domestic operations Signup and view all the answers

What percentage of US firms exporting industrial products began their international business by responding to unsolicited orders?

48% Signup and view all the answers

Which statement best describes the initial attitude of many firms towards international business?

They often exhibit a passive attitude responding to external stimuli. Signup and view all the answers

What is a characteristic process in the international expansion of a domestic company?

Gradual development of a global outlook. Signup and view all the answers

How do many firms first start their exports according to surveys of US companies?

By responding to unsolicited orders or foreign distributors. Signup and view all the answers

What is the evolution stage that a purely domestic company typically undergoes?

Progressing to multinational and eventually global status. Signup and view all the answers

What is commonly observed in the commitment level of firms as they begin international business?

They often start with a low level of commitment. Signup and view all the answers

Which of these factors does NOT commonly influence a domestic company's decision to go international?

High profitability in the domestic market. Signup and view all the answers

What is the typical starting point for a firm that evolves into a multinational company?

A company completely focused on domestic sales. Signup and view all the answers

Study Notes

Export Finance

Export finance encompasses institutional finance for exports, facilitated by bodies like Exim Bank.
Payment terms and letters of credit are crucial components of export finance.

Export Risk Insurance

Marine insurance safeguards against potential risks during the shipping process.
ECGC (Export Credit Guarantee Corporation) and export credit insurance providers offer protection against export risks.

Quality Control and Pre-shipment Inspection

The primary objective of quality control is to ensure the delivery of goods meeting set standards.
Bureau of Indian Standards plays a crucial role in maintaining quality standards for exports.

Trade in Services

Trade in services involves the exchange of intangible services across international borders.
Services face restrictions due to their unique characteristics.

Technological Developments and International Marketing

Technological advancements have diminished the impact of geographical distance, enhancing global competitiveness.
E-marketing leverages digital platforms for marketing goods and services internationally.
Global electronic supply chains streamline international trade processes.

International Negotiations

"4Cs" of negotiation: Communication, Compromise, Collaboration, and Creativity.
Effective negotiation involves a multi-stage process.

Trade Policy and Regulation of India

India's trade policy aims to promote economic growth and liberalization.
The Foreign Trade Policy (2015-20) outlines India's trade strategy.
The Foreign Trade (Development and Regulation) Act, 1992, regulates foreign trade activities.

Export Promotion

Various organizations and incentives support export promotion in India.
Production assistance, marketing assistance, and import facilities are provided to exporters.
Special Economic Zones (SEZs), Export Oriented Units (EOUs), and Export Houses are established to boost exports.

Trade and BoP of India

India's trade performance is influenced by various economic factors.
Major exports and imports, trade directions, and the balance of payments are critical aspects of India's trade.

International Marketing

International marketing is a distinct concept from international trade.
It involves marketing goods and services across national borders.
Companies with a global outlook are particularly adept at international marketing.
It encompasses marketing strategies in a competitive international landscape.

Motivations for International Marketing

The profit motive is a key driver of international business expansion.
Growth opportunities in foreign markets are attractive to international players.
Companies can leverage cost advantages by relocating production to regions with lower labor costs.
Firms can expand their reach, increase sales, and diversify risks through international operations.
Some companies adopt international marketing as a strategic initiative from their inception.
Others might embark on exports in response to specific opportunities or external incentives.
Internationalization usually involves a gradual process of expanding operations across various markets.

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Description

Explore the essentials of export finance, including institutional support from agencies like Exim Bank, and learn about payment terms and letters of credit. Delve into the importance of export risk insurance through entities like ECGC and the role of marine insurance. Understand quality control measures and the exchange of services in international trade as influenced by technological advancements.