Exporting and Global Sourcing

Exporting

• Exporting involves producing products or services in one country and selling/distributing them to customers in other countries.

Assessing Global Market Opportunity

• Managers assess the firm's readiness to internationalize and choose the most appropriate country markets and partners.

Organizing Exporting

• Managers decide on the degree of resource commitment and the type of domestic and foreign intermediaries to hire.

Acquiring Needed Skills and Competencies

• The firm acquires skills and competencies to handle export operations, trains staff, and engages appropriate facilitating firms.

Implementing Exporting Strategy

• Managers make decisions about product adaptation, marketing communications adaptation, pricing, and support to foreign intermediaries.

Types of Exporting

• Indirect exporting: accomplished by contracting with intermediaries located in the firm's home market.
• Direct exporting: accomplished by contracting with intermediaries located in the foreign market.

Company-owned Subsidiary

• A representative office of the focal firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market.

Importing or Global Sourcing

• Procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country.

Documentation

• Official forms and other paperwork required in export transactions for shipping and customs procedures.

Commercial Invoice

• The actual demand for payment the exporter issues when a sale is made.

Bill of Lading

• The basic contract between exporter and shipper.

Certificate of Origin

• The birth certificate of the goods being shipped, indicating the country of origin.

Incoterms

• Universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods.

Incoterms Examples

• FOB "Free on Board" (port of shipment): delivery takes place when the goods pass the ship's rail at the named port of shipment.
• CIF "Cost, Insurance, and Freight" (port of destination): the seller pays the cargo insurance and delivery of goods to a named port of destination.

This quiz covers the strategy of exporting products or services to other countries, including assessing global market opportunities and organizing exporting processes.