Study guide Chapter 13 Export and Import Strategies 1) What term refers to the sale of goods or services produced

by a company based in one country to customers that reside in a different country? 2) What term refers to the purchase of goods or services produced by a company based in one country from sellers that reside in a different country? 3) Give another example of a service import. Examples include a consulting company performing services for a foreign client. an investment ban helping a foreign company arrange financing! and engineering contractors building roads in a foreign country. ") #his spring brea you are planning to leave the $.%. and go to &ondon! England and stay at a hotel there. 'ou (ill be ma ing a )))))))) and the &ondon hotel (ill be performing a )))))))). *) #he benefits of retaining a core competency (ithin a company and threading that core competency through the value chain are referred to as )))))))) advantages. +) ,ompanies are li ely to export products abroad in situations such as the follo(ing- (hen their average cost per unit of home country production declines substantially by increasing output! (hen they aim to increase degree of mar et diversification! and (hen they are ne( to international business. .ame another. /) #hese factors companies to loo to exports to boost total sales- maturity of the domestic mar et! potential to leverage their core competency in foreign mar ets! and response to the mar et entry of a foreign rival. .ame another. 0) 1n general! companies that have lo( levels of o(nership advantages )))))))). 2) #he probability of being an exporter )))))))). 13) #he )))))))) of a firm is the share of its total output that is exported. 11) 4o small and medium5si6ed enterprises 7%8Es) ma e up the ma9ority of $.%. exporters? 12) :ccording to the research described in your text! (hat factors (ould increase a firm;s probability of exporting? 13) What are the phases in the process of incremental export development? 1") 1ncreasingly! (e see ne(ly formed companies begin exporting sooner in their life cycle! led by a ne( generation of entrepreneurs and managers (ith a een a(areness of export opportunities. #hese sorts of firms are generally referred to as )))))))). 1*) :n :ustralian company ma es athletic (ear for (omen! men! and adults. :fter several years of successfully exporting its products to the $.<. and the $.%.! the company began exporting to
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several members of the E$. #his is an example of )))))))). 1+) #he perspective of )))))))) holds that as a company gains experience! resources! and confidence! it progressively increases its exports. 1/) What is a ma9or pitfall of exporting? 10) What mista es do companies ne( to exporting fre?uently ma e? 12) :dvances in information technology have led to )))))))))))))))))))). 23) What is commonly cited as a reason that firms do not see export opportunities more aggressively? 21) #he basis for designing an effective strategy for exporting begins (ith )))))))). 22) 1n designing an export strategy! managers typically do )))))))))))))))))). 23) #he manager of a small or medium5si6ed enterprise 7%8E) in the $nited %tates loo ing to begin exporting (ould most li ely consult (ith (hom to obtain expert counseling on exporting? 2") #he incremental internationali6ation vie( of exporting holds that companies first target countries that are )))))))) their home mar et. 2*) :n import strategy may be driven by the fact that companies )))))))). 2+) 8any of the strategic and practical issues of the import process )))))))) those of the export process. 2/) #he three main types of importers include )))))))))))))))))))). 20) : driving factor for the gro(th in imports is the impact of )))))))). 22) : bro er or other import consultant can help an importer minimi6e import duties by )))))))). 33) #he primary duties of the )))))))) are the assessment and collection of all duties! taxes! and fees on imported merchandise! the enforcement of customs and related la(s! and the administration of certain navigation la(s and treaties. 31) #he primary duties of the @ureau of ,ustoms and @order >rotection include assessing all duties! taxes! and fees on imported merchandise! protecting the $.%. from threatening imports! policing smuggling operations and (hat else? 32) 1mport documents are of t(o different types- those that determine (hether customs (ill release the shipment and those that contain information for )))))))).
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33) 1n ))))))))! the exporter sells goods directly to or through an independent domestic intermediary in the exporter;s home country that exports the products to foreign mar ets. 3") #he three common (ays that bro ers are paid by a company conducting indirect exporting are3*) :s companies initiate their activities in export mar ets (ith a preference for an indirect selling strategy! they tend to )))))))). 3+) #he company that hires an intermediary in the belief that indirect selling has the most appeal in helping it manage the export process must accept )))))))). 3/) :7n) )))))))) operates on a contractual basis and provides exclusive representation for an exporter;s goods and services in a foreign mar et. 30) What is typically true of an export management company? 32) What is a difference bet(een export management companies 7E8,s) and export trading companies 7E#,s)? "3) What is true of export trading companies in the $nited %tates? "1) Exporters (ho opt for direct selling in foreign mar ets most commonly do so )))))))). "2) :n exporter that opts for a7n) )))))))) strategy (ill develop its o(n international mar eting capability. "3) #he 1nternet supports more companies; efforts to launch a direct selling strategy by )))))))). "") What is the formal export document from the exporter to the importer that outlines the selling terms! price! and delivery if the goods are actually shipped? "*) Aederal! state! and local governments! seeing the benefits of international trade! actively aid the efforts of potential and active exporters as (ell as )))))))). "+) :n :merican company loo ing to get into exporting could loo to government agencies for assistance in ))))))))))). "/) : freight for(arder! the so5called Btravel agent of cargo!B performs (hat functions? "0) #rends such as more fre?uent shipments! lighter5(eight shipments! and higher5value shipments )))))))). "2) ,ountertrade is an alternative means of structuring an international sale (hen )))))))). *3) )))))))) refers to any one of several different arrangements that parties negotiate so that
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they can trade goods and services (ith limited or no use of currency. *1) ,ountertrade is an inefficient (ay of doing business because it )))))))). *2) ,ountertrade generally increases in countries (hose economies )))))))). *3) : situation in (hich goods are traded for goods due to a shortage of foreign exchange is no(n as )))))))). *") : situation in (hich an exporter sells goods for cash but then underta es to promote exports from the importing country in order to help it earn foreign exchange is no(n as )))))))). **) : situation in (hich an exporter sells products to a foreign country along (ith its promise to ma e a future purchase of a specific product made in that country is no(n as )))))))). *+) Which of the follo(ing is an example of barter? :) : beverage ma er in England provides production e?uipment to a state5o(ned bottling plant in Cussia (hile agreeing to ta e payment in the form of future output generated by the Cussian plant. @) 1ndonesia supplies #hailand (ith agricultural supplies in exchange for rice gro(n in #hailand. ,) #he $.%. exports goods to ,hina and then invests in a ,hinese business that is unrelated to those goods. 4) :n aircraft exporter partners (ith a company in the importing country to manufacture components that (ill then to be used in the assembly of the aircraft. #DA */) 1mporting is the converse of exporting. *0) : company classified as a small and medium5si6ed enterprise 7%8E) has fe(er than *33 employees. *2) E(nership advantages refer to a firm;s specific assets! international experience! and the ability to develop either lo(5cost or highly differentiated products (ithin the context of its particular value chain. +3) %erendipity is often an export trigger for companies that purposefully loo to internationali6e their operations. +1) Export intensity! the percentage of total revenues coming from exports! is not al(ays correlated (ith company si6e. +2) #he probability of a company being an exporter is independent of the si6e of the company. +3) B@orn globalB firms are those that step straight onto the (orld stage! ma ing exporting the primary goal of the firm from day one of operations. +") #he stages of development in a company;s export expansion are tied to company si6e.
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+*) : ma9or pitfall of exporting is misclassifying products in terms of the destination country;s tariff schedule! thereby incurring a higher tax or slo(er delivery. ++) ,ompanies ne( to exporting most fre?uently suffer over5commitment by top management in ta ing on the initial difficulties and financial re?uirements of exporting. +/) ,ompanies that are born global can s ip the step of designing an export strategy. +0) Entrepreneurs exporting for the first time are more li ely to underestimate than overestimate demand for their product. +2) Ene advantage of importing is that an importer can diversify its operating ris s by developing alternative suppliers. /3) #here are three broad types of importers- those that use foreign sourcing as part of their global production net(or ! those that loo at foreign sourcing to get the highest ?uality products at the lo(est possible price! and those that loo defensively for any product around the (orld that they can import in order to compete (ith rivals. /1) #he primary duty of the customs agency of a government is the assessment and collection of all duties! taxes! and fees on imported merchandise. /2) #he $.%. government has more than 13!333 tariff classifications and more than half of them are sub9ect to interpretation. /3) 1ndirect exports are goods and services sold to an independent intermediary outside of the exporter;s home country! (hich then sells the product in the export mar et to the final consumer. /") Exporters employ an export management company as part of an indirect selling strategy. /*) 8a9or types of indirect intermediaries include export trading companies! distributors! and freight for(arding companies. /+) :n export trading company 7E#,) (or s (ith many manufacturers rather than representing a single manufacturer. //) 1n (hat is no(n as direct selling! the exporter sells goods directly to or through an independent domestic intermediary in the exporter;s home country that then exports the products to foreign mar ets. /0) 4irect exports are sold to an independent intermediary in the domestic mar et! (hich then sells the products in the export mar et to the final consumer. /2) : $.%. government agency that provides assistance to companies interested in exporting is the 1nternational #rade :dministration. 03) #he foreign freight for(arder is the largest export intermediary in terms of value and (eight
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of products managed. 01) ,ountertrade refers to any one of several different arrangements that parties negotiate so that they can trade goods and services (ith limited or no use of currency. 02) ,ountertrade is an efficient (ay of doing business. 03) @arter is a transaction in (hich goods or services are traded for goods or services of e?ual value (ithout any exchange of cash or credit. 0") #ransactions in (hich an exporter sells products for cash and then helps the importer find opportunities to earn hard currency for payment are no(n as buybac .

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