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International Business
Rakesh Mohan Joshi
Professor & Chairperson, IIFT New Delhi
MODES OF
INTERNATIONAL
BUSINESS EXPANSION
Buying offices
profit margins.
markets.
trading/exports houses.
customers.
Copyright @ Oxford University Press Chapter 11: Modes of International
International Business R. M. Joshi Business Expansion
Manufacturers Export Agents or Sales Representatives
single transaction.
Simple barter:
Direct and simultaneous
exchange of goods without use of money.
Clearing arrangement: The transaction of
goods and services that extends an agreed period
of time.
Switch trading: Trading involving a third party,
known as switch trader in the transaction to
facilitate buying of unwanted goods from the
importer and make payment by cash or barter to
the exporter.
Copyright @ Oxford University Press Chapter 11: Modes of International
International Business R. M. Joshi Business Expansion
Counter purchase:
A deal involving two
separate transactions payable in hard currency,
each with its own cash value.
Buyback: Often used as a marketing tool to sell
plant and equipment wherein the payment is
recovered by way of output from plant and
equipment sold.
Offset: Partial payment is made by the importer
in hard currency, besides promising to source
inputs from the importing country and also make
investment to facilitate production of such goods.
internationally.
Process licensing
Trade-mark licensing
Cross-licensing
a franchising fee.
adopted.
foreign country.
Pragmatic rule
Strategy rule
international expansion.