International Commerce & Transactions

• International commerce includes business activities to produce, ship, and sell goods and services internationally, from production to consumption.

International Transaction Steps

• An exporter and importer sign a sales contract.
• The exporter sells the merchandise.
• Goods are transported locally from Saint-Georges-de-Beauce to Montreal port.
• Export customs formalities are completed.
• Merchandise is delivered to a maritime carrier.
• Goods are stored on the quay before loading onto the ship.
• The merchandise is loaded onto the ship.
• Travel occurs from Montreal to Miami.
• The merchandise arrives in Miami port onboard the ship.
• The merchandise is transferred onto the quay.
• Truck transport happens to the agreed contract destination.
• The importer receives the merchandise.
• The invoice is paid upon merchandise receipt.

Factors Favoring International Trade Development

• Telecommunications are developing.
• Transportation is developing.
• Trade liberalization is occuring by trade barriers being abolished/ agreements being made.
• Banks are implementing systems for secure money transferring.

Why Canada Encourages Exports

• To develop company competitiveness
• To promote awareness of Canada beyond borders.
• To increase national economic growth by bringing money into the economy.
• Because Canada and Quebec have smaller markets, a favorable economic situation is produced.

Why Companies Internationalize

• Diversification helps maintain consistent output of a formerly seasonal product
• New markets increase sales.
• Visibility and reputation grow.
• It develops companies by increasing production.
• Economies of scale are achieved.

Success Factors for International Business

• Knowing strengths and weaknesses
• Human factors are important.
• Product advantages help
• Financial and technical resources are needed.
• Support from management is needed.
• Structured planning is key.
• Sensitivity to cultural aspects helps.
• The importance of human relations is critical.

Types of Internationalizing Companies

• Service companies exist.
• Human factors can be a challenge, technology a chance.
• Large corporations internationalize.
• SMEs can internationalize because they are naturally less agile.

SME Challenges and Advantages in International Trade

• They can gain credibility with international clients or suppliers
• Accessing liquidity improves.
• They are given access to raw materials or components at favorable prices.
• The decision-making process is imprived.
• Resources become available for business and marketing development.
• Organizational structure can improve
• International trade knowledge/experience is gained.
• They get access to specialty markets.

Different Forms of Economic Integration

• A free trade agreement promotes not taxes in member states and the reduction of non-tariff barriers
• Customs union establishes free trade agreements and common external tariffs
• Common market consists of customs unions plus free capital/labor flow and partial policy harmonization.
• Economic union entails common markets with shared economic institutions/ policies and a common currency.

Trade Obstacles (Barriers)

• A barrier is protectionism.
• These are tariff and non-tariff measures protecting national production from foreign competition.
• Tariff barriers involve taxes or duties to be paid
• Specific rate tariffs equal to $35/L of wine.
• Ad valorem tariffs equal a percentage of the product's value.
• Non-tariff barriers involve various original forms without a tax or duty
• Quotas
• Sanctions/embargos
• Protectionist measures include hygiene and safety standards, requiring in-country incorporation, etc.

Transaction Legal Aspects

• Legal System Varieties
• Civil Law: Laws are written by a legislator, judges refer to laws when rendering judgments.
• Religious Law (e.g., Muslim law): An autonomous system grounded in the Quran containing Islamic doctrine.
• Common Law: Based on jurisprudence. Judges refer to previous cases and legal principles.

International Conventions

• International conventions and agreements align laws between countries.

International Litigation: Applicable Law

• International litigation can be complex
• The applicable law will depend on the contract
• Laws to consider: exporting country, importing country, or a third country
• Example: A Canadian judge’s ruling against a Vietnamese company; it is applied by Vietnamese justice.
• Resolutions: friendly settlements or arbitration

Questionnaire Method

• The questionnaire method is use to determine business strengths and weaknesses.
• It considers these four main functions: organizational resources, finance, marketing, and production.

Areas to diagnose

• Diagnosis uses questions to recognize strengths and weaknesses.
• Resource/Direction: training for employees, management/employee relations & communication/experience are assessed.
• Efficiency is calculated with employees, management, vacations and employee turnover rates.
• Decision-Making: level of delegation and accountability is considered.
• Tolerance for risk, budget monitoring, liquidity, access to financing, financial ratios and accounting expertise all affect finance.
• A company's legal structure needs consideration.
• Commercialization/Marketing: Brand image, pricing, distribution networks, promotion and customer knowledge affect marketing.
• Capability for market research should be weighed.
• Adaptability of promotional tools and use of trade shows affect marketing.
• Production: optimized supply chain, production capacity, and the current workforce also impact production.

FFPM Method (FFOM)

• The FFPM method is an analysis for looking at external factors like opportunities and threats.
• It facilitates strategy development by pairing strengths with opportunities, strengths with threats, weaknesses with opportunities, and weaknesses with threats.

Diagnostic Realization Conditions

• Objectivity is key for effective FFPM analysis, and one needs to be realistic on strengths and weaknesses.
• Assess the current state, do not look at the future you want
• Analysis should be based on foreign markets targeted.
• The FFPM analysis is not an end in itself.

Market Study Objectives

• Market studies help businesses establish a position and strategy; focusing on understanding the potential market.
• The study should establish realistic goals and a strategy.

Study Difficulties

• New market with zero data
• Distance barrier
• Language barrier
• Information can be unreliable.

Conducting a Market Study

• Preliminary analysis using existing documents/notes focus on economic, political-legal, geographical, socio-cultural environments
• Study the market structure/target by assessing competition, consumer needs, and distribution networks through documents and notes.

Market Study Characteristics

• The preliminary analysis is done using available information, and is quick, inexpensive, and broad.
• Market structure/target analysis is more precise using primary and secondary data.

PESTE Analysis

• Economic factors: average income, inflation, GDP, unemployment, exchange rates, debt, economic forecasts, and trade balance.
• Political factors: regime type, political parties, governmental stability are needed.
• Legal aspects: how stable is the system and effective, interventionalism of the government and corruoption
• Geographical: access to country, topography, water, resources, types of transportation, infrastructure, telecommunications, urbanization should be studied.
• Socio-cultural/demographic Factors to explore: culture, traditions, age, gender, ethnicity, religion, education, family and population values.
• Examine the hierarchy, age relations, corporation type.
• Commercial factors: trade regulations, company regulations, price control and display also need to be taken into consideration.
• Understand banking rules, consumer protection policies, leading industries, tariff and trade agreements.

Market Structure

• Determine competitive scope
• Understand international aspects
• Is the product an advantage or disadvantage?
• Perform an analysis on consumer needs.
• Study habits and consumer behavior and where do they purchase.
• Analyze the frequency of purchase and amount.
• Research the perception of foreign products from locals.
• Create profiles with market segments.

Distrubiton Network

• Use overseas chain, a retailer chain, or a gross agglomerate.
• What is required to be a product to be sold in the country considering the bar code
• Have arrangements with big or many smaller retailers.

Market Entry vs. Distribution Network

• Both the terms fall under variable Distribution of marketing internationally.
• Market entry is a process and is the first step of the process to a distributive network
• Market introduction allows entry to national distribution

Types of Market Entry

• Direct: The company manages all sales and delivery processes.
• Indirect: The company uses intermediaries to export products.
• Partnership: The company partners with another entity to do the distribution.

Direct Sales

• Boutique networks are not the best because complex.
• Door-to-door sales and having a booth a events is inexpensive.
• Online sales is efficient and simple.
• Downside includes restrictions on marketing and low chance of network
• Sites must have comparable pricing to market despite distributors taking their margin.

Purchasing Office

• Bureau can be from a distribution chain that is also an international provider.
• They handle logistics and oversee prices.
• Small businesses are able to create an office as well.

Direct Entry

• The company will have a direct relationship with their market
• The product is sold just after the client has made the payment.
• The market has a dependence on the company due to distribution
• Due to these factors, there is a long process as well as a high risk.

Indirect

• Directing is easier when selling through an intermediary
• Commercial practices will have a lack of risk
• The intermediary is connecting the client and seller
• There is lack of market knowledge
• The beneficiary will has a low market to be making income.

Partnerships

• Benefits from shared expertise and low risk
• It will hold independence
• Long and important investment
• Can be from little to no initial internationalization
• It can be:
• Co-Venture: Two enterprises create one
• Licensing: The production with be contracted to an payed business.
• Franchise: The product will not be sold unless it is in a specialized market.

Considerations for Partnering

• There are possible requirements set by the receiving country.
• There must be the possibility to lower production cost
• There must be a lower risk due to market
• To acquire certain tech that is needed in business

Factors to contemplate

• What are they going to contribute?
• How possible is it to have labor along with the product?
• What are the finances like
• Will it take long?
• Are there going to needs to be specific needs?
• Is it going to have to deal with low stock?

Overseas Marketing

• Cultural adaptation
• Customer awareness
• Competitor understanding
• Must be able to handle distance between distributors
• Frequent Partner Communication

Segmenting the public

• Segments of the market
• Demographically
• Behavioral based
• Mentality bases
• Geographical base
• Choose a segment
• Dedication to a small segment
• Separate segments for different campaigns
• Make a singular campaign for one segment

Marketing Point

• The customer
• The relationship
• The cost

Product

• Setting the price
• Customer appreciation
• Bench Marks
• How much to make
• Set cost/ Set revenue
• What the currency is
• Will you get recurring payments
• Cost

Distribution

• Making a transfer
• Are the items insured
• How easy is the access to the direct
• What are the needs for a product.
• Quantity to make
• Intensive( Everywhere)
• Selective(certain location)
• Exclusive(limited)

Communication

• Has to be made for all types of communities as well with the company's message
• What are the communication goals?

Methods Of communication and public notice

• Public ads
• Social Media
• Promotions
• Event
• International means need to be different as well.
• What is optimal to be making for performance.
• Local advertisement
• Cultural differences
• Target
• Recent Trends
• How the competition handles the campaign

Communication Adaptations

• Keep it the same and convey
• Lower the cost for making it be more efficient and to have a unique style of advertising.
• Different cultures will also need different ads due to local memes

Product

• Check if the product's name will be appropriate in other countries and what it might mean
• Is there service to the product being shipped which has modes
• The best will have a higher quality control and has different flavor types.
• Have to consider multiple climates and environments when packaging
• The measurement and size will change with different locations and where products will be used.

Adaptation of production

• To maintain satisfaction for the market.
• To go against local company
• A singular type of system
• Market condition based
• The negative
• Higher rates
• Marketing changes
• Lack market grip