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Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
Practice of International Trade EIMSO2 Lecture V3
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Practice of International Trade EIMSO2 Lecture V3

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Course Introduction and Lecture slides for "Practice of International Trade", Department of International Business, Tunghai University. Utilizing the Export Import Management System V. 2.0 from JAI …

Course Introduction and Lecture slides for "Practice of International Trade", Department of International Business, Tunghai University. Utilizing the Export Import Management System V. 2.0 from JAI International (USA).

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  • Degree of control and risk, information feedback. Payment.
  • The configuration of the five forces differs byindustry. In the market for commercial aircraft,fierce rivalry between dominant producersAirbus and Boeing and the bargainingpower of the airlines that place huge ordersfor aircraft are strong, while the threat of entry,the threat of substitutes, and the power ofsuppliers are more benign. In the movie theaterindustry, the proliferation of substituteforms of entertainment and the power of themovie producers and distributors who supplymovies, the critical input, are important.The strongest competitive force or forces determinethe profitability of an industry and becomethe most important to strategy formulation.The most salient force, however, is notalways obvious.For example, even though rivalry is oftenfierce in commodity industries, it may not bethe factor limiting profitability. Low returns inthe photographic film industry, for instance,are the result of a superior substitute product—as Kodak and Fuji, the world’s leadingproducers of photographic film, learned withthe advent of digital photography. In such a situation,coping with the substitute product becomes
  • New entrants to an industrybring new capacity and a desire to gainmarket share that puts pressure on prices,costs, and the rate of investment necessary tocompete. Particularly when new entrants arediversifying from other markets, they can leverageexisting capabilities and cash flows toshake up competition, as Pepsi did when it enteredthe bottled water industry, Microsoft didwhen it began to offer internet browsers, andApple did when it entered the music distributionbusiness.The threat of entry, therefore, puts a cap onthe profit potential of an industry. When thethreat is high, incumbents must hold downtheir prices or boost investment to deter newcompetitors. In specialty coffee retailing, forexample, relatively low entry barriers meanthat Starbucks must invest aggressively inmodernizing stores and menus.The threat of entry in an industry dependson the height of entry barriers that are presentand on the reaction entrants can expect fromincumbents. If entry barriers are low and newcomersexpect little retaliation from the entrenchedcompetitors, the threat of entry ishigh and industry profitability is moderated. Itis thethreatof entry, not whether entry actuallyoccurs, that holds down profitability.Barriers to entry.Entry barriers are advantagesthat incumbents have relative to new entrants.There are seven major sources:1.Supply-side economies of scale.These economiesarise when firms that produce at largervolumes enjoy lower costs per unit becausethey can spread fixed costs over more units,employ more efficient technology, or commandbetter terms from suppliers. Supplysidescale economies deter entry by forcingthe aspiring entrant either to come into theindustry on a large scale, which requires dislodgingentrenched competitors, or to accepta cost disadvantage.Scale economies can be found in virtuallyevery activity in the value chain; which ones
  • Anti-trust (Competition Law): It may prohibit agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels. It may ban abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal and many others. It may supervise the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licences or access to facilities to enable other businesses to continue competing.
  • Transcript

    • 1. Practice of International Business UtilizingExport Management System Online
      www.eimso2.com
      funded by Tunghai International Business
    • 2.
      • An online management planning tool designed to help develop a company’s export strategy.
      • 3. …and enable informed Management Decisions
      http://www.eimso2.com
      Purpose of EMSO
    • 4.
      • Structured Methodology to:
      • 5. Gather Information
      • 6. Enter Information
      • 7. Analyze and Evaluate Information
      • 8. Generate Executive Reports
      • 9. Enable Management Decisions
      • 10. Combining International Management Theory with a Practical “How-to” approach
      How it works?
      http://www.eimso2.com
    • 11.
      • If you have not registered:
      • 12. At www.eimso2.comselect “student” under login location
      http://www.eimso2.com
      Registering
    • 13.
      • Enter the purchase code provided by the department.
      Purchasing
    • 14. Getting Started-Individual Projects
      • After logging in, Click in the Individual Projects table.
      • 15. Then, click “Module 1” in the Quick Links toolbar or “1.1 Company Analysis” in the table to begin entering information.
      • When a group is created, an automated e-mail with group information will be sent to all group members.
      • 16. Each member of the group will use his or her own username and password to log in.
      • 17. After logging in, click in the Group Project table. In the “Logged” column, EIMSO indicates when group members are logged in. If the field is blank, that means the group member is NOT logged in.
      Group Assignments
    • 18.
      • Two group members should not be working on one screen simultaneously.
      • 19. Communicate with your group members frequently to keep track of each others progress.
      • 20. If it should occur that two members are working on one screen, when one of those persons clicks “Save,” the other person will lose all of his or her entered data!
      Group Tips
    • 21.
      • Includes four modules
      • 22. Each module defines a set of objectives and provides
      • 23. Steps
      • 24. Instructions
      • 25. Resource links
      to accomplish these objectives.
      The EIMSO System
      http://www.eimso2.com
    • 26. Semester & System Overview
    • 27.
      • The objective of Module 1 is to conduct an in-depth situation analysis of a company.
      Each group will choose a company within an industry and conduct an internal and external analysis.
      You will then choose a specific product line/service within the company to export and determine the companies readiness for exporting.
      Module 1: Company Situation Analysis
    • 28.
      • Public vs. Private Companies
      • 29. Public companies are easier to research.
      • 30. But public companies are usually already well established internationally : you may need to select countries in which the company does not have a presence.
      • 31. Any selection should be a company that exports from Taiwan.
      http://www.eimso2.com
      Choosing a Company
    • 32.
      • Identify the countries with the greatest market potential for the company's products or services.
      • 33. Research and select countries to be analyzed and evaluated.
      • 34. Select essential criteria in determining high potential country markets for the company's product(s)/service(s).
      http://www.eimso2.com
      Module 2: Global Market Search
    • 35.
      • Evaluate the top two countries with the highest potential for the company and its products/services:
      Develop business contacts who can assist with exporting,
      Determine the total market potential along with the company's sales potential in each country,
      Develop a profile for the top two (2) competitors in each country.
      http://www.eimso2.com
      Module 3: In-Depth Market Analysis
    • 36. Determine the most effective entry strategy and marketing plan.
      Forecast future sales/profits, projected income statement, and breakeven analysis for the Target Market.
      http://www.eimso2.com
      Module 4: Entry Strategy and Marketing Plan
    • 37.
      • Remember to click “Save” at the bottom of every screen before exiting or moving forward to the next page.
      • 38. Click “Continue” or “Previous” buttons to navigate through EMSO.
      http://www.eimso2.com
      Save and Continue
    • 39.
      • At the end of each module, a Report can be generated. Print one for your use & bring to every class.
      • 40. Click on “Module #” in the Quick Links toolbar, and then click “Report.” A new tab or webpage will open.
      • 41. Choose to export the document as a Word document, PDF file, Excel document, or Rich text.
      http://www.eimso2.com
      GENERATE & PRINT REPORTS
    • 42.
      • You can also click on tables and print them separately and export the same way.
      • 43. Once you have exported the Module or table, you can print as you would a normal document.
      Printing
    • 44.
      • Search for answers instead of expecting answers with the click of the mouse.
      • 45. Carefully Review & Print the User Guide, Case Examples, Resources and Glossary before working on the project.
      • 46. Glossary terms are hyperlinked in all 4 Modules.
      http://www.eimso2.com
      Research Tips
    • 47. At the End of the Course: Executive Summary and Bibliography
      • Create an Executive Summary. Located on the Quick Links Toolbar.
      • 48. Includes Purpose, Research Methodology, Key Findings for each Module, Conclusions, and Recommendations.
      • 49. To print Executive summary, copy and paste paragraphs into a separate Word document.
      • 50. Create a Bibliography that includes all resources used for research on your project on a Word document and upload onto EMSO.
    • Suggestions to Start Module 1:
      Preview all four Modules to see the big picture
      Print out your User Guide
      Print & review our Case Example (Select Bedding)
      Review Porters 5 Forces Model:
      eLearning “Tunghai Porter” Document (Slideshare)
      EIMSO link or
      International Business textbook
      Review SWOT Models:
      eLearning “Tunghai Swot” Document (Slideshare)
      Management textbooks or online sources
      Questions???
    • 51. Company Situation Analysis
      Module 1:
    • 52. Overview
      Choose Industry & Company
      Conduct internal analysis
      Determine international experience (if any)
      Conduct Porters 5 Forces analysis:
      evaluate the profitability or power dynamics of the specific industry
      Select a specific product line or service of the chosen company to export
      Analyze companies readiness to export
      Conduct a SWOT Analysis
      Evaluate your company’s competitive position
      State your summary/ conclusions and initial recommendations for Module 1.
      Module 1: Company Situation Analysis
    • 53. 1.1a-c Company Analysis
      Company Selection
      Choose a company that you know about or have an interest in
      Select one that has information readily available
      Public traded company or private one that you have a relationship with
      Find a company from Taiwan
      1.1a Background
      1.1b Mission
      1.1c Sales/Profits for 3 Years
      1.1d International Diversification Strategy
      1.1e List the companies products and the countries it currently exports to.
    • 54. Describes a companies movement into foreign markets:
      Concentration Strategy (low)
      Diversification Strategy (high)
      Many markets, quickly, and increasing resources gradually to all
      Expensive, requires extensive management for success
      Licensing / franchising entry strategies can reduce resource requirements
      one or a few foreign markets until it develops a strong competitive position there
      Less resource intensive
      Less risk intensive
      1.1d Corporate Level International Strategy
    • 55. Prefer Prefer
      Factor Diversification Concentration
      if: if:
      1. Market growth rate low high
      2. Market sales stability low high
      3. Competitive lead time short long
      4. Spillover effects highhigh
      5. Need for product adaptation low high
      6. Need for promotion lowhigh
      and distribution adaptation
      7. Program control requirement lowhigh
      8. Constraints low high
      Source: “Marketing Expansion Strategies in International Marketing,” Journal of Marketing, Spring 1979, p.89.
      12-26
      Diversification vs. Concentration Strategies: Product and Market Factors
    • 56.
    • 57. Methods
      • Indirect Export (local middleman)
      • 58. Direct
      • 59. Foreign Sales/Marketing Subsidiary
      • 60. License/Franchise
      • 61. Foreign Factory
      • 62. Within current Sales/Marketing
      • 63. Administrative
      • 64. Export Department
      • 65. Logistics Department
      • 66. International Division
      • 67. Global Structure (product, geography, function)
      1.2 International Involvement
      Organization
      Key: Export functions closer to C.E.O show more resource, attention and commitment to international business
    • 68. International Division
      Organizational Structures
      Export Department
    • 69. Organization Strategies
    • 70. An Multi National Enterprise Network
      SE
      BE
      CE
      RD
      RE
      SA
      BA
      E
      RA
      CA
      D
      SD
      RB
      A
      BD
      SB
      B
      CD
      BB
      RC
      H
      SF
      BF
      CB
      CF
      SC
      F
      RF
      BC
      C
      A : Home plant
      H: Headquarters
      B … F: Subsidiaries
      Subsidiary Level Network
      S: Suppliers R: Regulatory institutions
      B: Buyers C: Customers
      CC
    • 71. Porters Five Forces
      “To Sustain long term profitability you must respond to your competition strategically”. Michael Porter, 1979, The Five Forces of Industry Strategy
      • We always monitor our rivals (competitors) …but there is more:
      • 72. Smart customers can force down prices (buying groups Wal*Mart)
      • 73. Suppliers can limit your profits if they are powerful enough to dictate prices to you (E.g. Microsoft)
      • 74. New entrants (competitors), often with lower cost structures and hungry for success can require you to increase investments/upgrades to maintain your position (E.g. Ryan Air UK, GolBrasil)
      • 75. Substitute offers can someday lure your customers away (E.g. Magellan GPS vs. the iPhone or Blackberry)
      1.3 Industry Analysis
    • 76. One of the least profitable industries because all five forces (against the firm) are strong:
      Established rivals: compete intensely on price (online reservation systems change continuously, Expedia, Travelocity, Bing)
      Customers are fickle, always searching for the lowest fare, regardless of carrier (airline independent – non loyal, miles only go so far)
      Suppliers; Plane (Boeing) and Engine Manufactures (GE, Pratt & Whitney) are few and strong, so are labor unions (highly trained employees)
      New Competitors enter the market every year
      Substitutes: HSR, Bus, Car
      Porters Five Forces Example: "Commercial Aviation"
    • 77. Industry Profitability examplesNotice the differences among industries
    • 78. End User Description:
      Gender, Age, Income, Education, Frequency of Purchases
      Household Types (large, multi-family, singles)
      Differences between the Domestic and Target Markets
      Customizations required (physical, energy, package, user guide)
      Typical use of product/service
      Cultural factors
      1.4 Target Market Profile
    • 79.
      • Key advantages and disadvantages
      • 80. For the user
      • 81. Compared to the competition
      • 82. Selling Price (maybe average for a family of products)
      • 83. Product Comparison (H-M-L)
      • 84. Lifecycle Stages:
      1.5 Product Profile
    • 85. Computer assisted scoring.
      Team review & analysis.
      Do you agree, why or why not?
      If not, state your reasoning.
      1.6 Export Readiness
    • 86. Strengths = Internal to Company or Product
      Weaknesses = Internal to Company or Product
      Opportunities = External provided by market
      Threats = External attacks from market forces
      Trends = What is happening over time (3-5 yrs)
      Provides us a better insight when we study factors over time.
      Shows changes either beneficial or problematic
      1.7 SWOT + “T”
    • 87.
      • Conclusion
      • 88. A summary of significant results or new insight based on analysis in this Module
      • 89. Ideally one statement for each sub-section
      • 90. E.g. 1.1, 1.2, 1.3, 1.4, 1.5, 1.7.
      • 91. Final comment: most important learning for your product/industry
      • 92. Recommendation
      • 93. Decision on what next steps to pursue (go – no go) and how new information may be useful in next module (you will need to pre-view Module 2 for this)
      Conclusion and Recommendation
    • 94. Global Market Search
      Module 2:
    • 95. Research & Select prospective Countries
      Select Criteria relevant to determine market success
      Determine a “weighted value” of importance for each criteria
      Conclusion/Summary and recommendations
      Report Generation & Printing
      Module 2 Agenda
    • 96. Consider findings from Module 1 Analysis:
      Choose 3-10 countries based on?:
      Product demand indicators or proxies
      Similar target market as domestic market
      Similar cultural orbehavioral characteristics
      Positive economic or per capita income statistics
      Other unique factors
      Choice should indicate a high sales potential
      These countries become your “short list”
      From 230 to as few as three.
      2.1 Country Selection
    • 97. General
      • Market Size & Growth Rate
      • 98. Exports/Import by Country Past sales figures, 5 yrs
      • 99. by Product Report
      • 100. Per Capita Income/Discretionary Income
      • 101. Middle Class Size and Growth Rate
      • 102. Political Freedom
      • 103. Internet penetration
      • 104. Telephone penetration
      • 105. Mass transportation penetration
      • 106. Proxies
      • 107. DVD for Flat Screen TV’s
      • 108. Home sales for dishwashers
      • 109. Tariff and Quota’s
      • 110. Custom Factors
      • 111. Industry specific
      2.2 Criteria Selection
      Specific (product)
    • 112. Derived Marketing Data
      Estimate consumption based on GDP:
      Use other countries as a guide
      If positive slope, tells us that GDP is important to demand
      Can be used for planning sales over time
      Emerging economies with changing GDP’s
    • 113. Weighted Criteria
      Each criteria = X% of the total of all criteria
      Enter Year, unit of measure, and the value
      Should total 100%
      If Positive impact on demand don’t check box (leave blank)
      If Negative impact on demand (e.g. unemployment, corruption), check box= √
      Transparency International: http://www.transparency.org/
      Survey: http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table
      2.3 Country Evaluation
    • 114. US Commercial Service
      www.export.gov
      Doing business in>
      www.doingbusinessin.org
      See EIMSO website resources
      CIA Factbook
      Yahoo.finance.com
      Sources
    • 115.
      • Conclusion
      • 116. Summary of significant results or new insight based on analysis in this Module
      • 117. Ideally one statement for each sub-section
      • 118. E.g. 2.1, 2.2, 2.3
      • 119. Final comment: most important learning for your potential country
      • 120. Recommendation
      • 121. Decision on what next steps to pursue (go – no go) and how new information may be useful in next step (need to pre-view Module 3)
      2.4 Conclusion and Recommendation
    • 122. Questions???
    • 123. In-Depth Market ANALYSIS
      Module 3:
    • 124. Goals: Evaluate the top two countries with the highest potential for export success:
      Methods:
      Select top 2 countries from previous module
      Develop business contacts that may assist with your export research and confirm your assumptions (e.g.):
      • Agents/Local Distributors/Trade Associations
      • 125. Government agencies, NGO’s, etc.
      Determine market sales potential
      Develop a profile of the top two competitors
      Module 3 Agenda (part I)
    • 126. Consider all sources of information:
      Government Trade offices (www.export.gov, www.taitra.org)
      Associations, Journals, Reports, Newspapers
      Provide leads or contact names.
      Trade Fair Schedules (by country)
      Names and coordinators of industry leads/contacts
      Distributors from online databases
      Alibaba, ebay, others
      Make a list and prioritize from strongest to weakest.
      3.1 Contacts
    • 127. China Examples
      • China Consumer Market
      • 128. China Automobile Industry
      • 129. China Beverage Market
      • 130. China Consumer Demographics
      • 131. Global Beverage Market
      • 132. World Coffee Market
      • 133. Brazil Cellular Market
      • 134. Brazil Wireless Industry
      • 135. Brazil Consumer Market
      • 136. Brazil Consumer Demographics
      • 137. Global Automotive Market
      • 138. World Wireless Data
      3.1 Secondary Research Search Terms
      Brazil Examples
    • 139. Total Market Potential (a x b x c = TMP)
      Number of potential consumers
      • Eligible or qualified (ability to pay, access to store, freedom to purchase, interest)
      • 140. Critical, realistic analysis, consider substitutes
      Frequency
      • Use domestic market as a starting point
      • 141. Consider differences in frequency or size of package or culture and buying habits (household, individual extended households)
      Selling price of the product (your estimate, can be changed)
      3.2 Market and Company Sales Potential
    • 142. Top Down
      • Start with population data
      • 143. Filter for
      • 144. Age, Income, Geography, Education, etc.
      • 145. Specific factors for your produce/service
      • 146. Result is Total Market Potential
      Start with detailed existing sales data for your competitors product
      Add up data from multiple competitors
      Result is Total Market Potential
      3.2 Market Estimation
      Bottom Up
      Multiply TMP by your sales success percentage
      to get your estimated (forecast) sales number.
    • 147. Total Potential Market x Success Factor = Market Estimation
      Estimate your sales achievement based on competitors distribution strategy
      Direct vs. non direct competitor sales is a key factor
      Direct have better success, typically
      Due to closeness and information exchange from producer to consumer
      3.2 Market Estimation
    • 148. A: Top three Export Competitors:
      See Module 1.2 for your original competitor list
      Choose one domestic and one international minimally
      Who is the most dangerous competitor?
      Local or international
      What are customers buying preferences (local or import)?
      B: Export methods
      Refer to export method chart for competitors for each country – recall for your own strategy.
      3.3 Competition
    • 149. C: Market Coverage
      National, regional or local/city market coverage
      D: Export methods by Competitor
      Choose known export methods for your competitor
      E: Final review of competitors by country
      The more direct their methods, the more difficult for our plan
      3.3 Competition
    • 150. Export regulations
      Country Entry Conditions
      Administrative conditions to
      Infrastructure and operating environment
      The Best Target Market Country
      Conclusion (summary) & Recommendations
      Module 3 Agenda (part II)
    • 151. Determine if an Export License is required
      National security (e.g. cellular telephones, ATM’s)
      Shortage (e.g. rice in Vietnam during 2008)
      Search Google: “US Cellular Phone Export License”
      3.4 Export Regulations
    • 152.
      • Each Country has a different set of rules for importing products. Tariff’s, quota’s and rules are all different and found in many places.
      • 153. Administrative Barriers
      • 154. Consider paperwork, bureaucracy and other administrative tasks. Score 1 for very difficult or 5 for easy
      • 155. Import Licensing
      • 156. Consider the process for getting an import license (sometimes your distributor will do this), consider how difficult this task will be. Score 1 for difficult or 5 for less difficult
      • 157. Quota/Tariff’s
      • 158. Score 1 for very high tariff’s or low quotas or 5 for low tariffs or no quotas.
      3.5a Country Entry Conditions
    • 159. Convertibility of currency (e.g. can you exchange it easily and inexpensively at a bank)
      Score 1 if no, 5 if yes (favorable).
      Country’s current account standing (balance of payments)
      Score 1 if no, 5 if yes (favorable).
      Country’s currency is stable?
      Score 1 if no, 5 if yes (favorable).
      3.5b Foreign Exchange Performance
    • 160. Banking system is efficient, available, useful, helpful?
      Energy reliability and accessibility?
      Internet connections and availability (speed, performance)
      Telecommunications systems &
      Transportation (highways, air cargo system, waterways, railways)
      3.5c Country Infrastructure
      Score 1 if no (unfavorable), 5 if yes (favorable).
    • 161. Regulated distribution channels, protection bias?
      Channels provide national accessibility (geographic reach)?
      Existing channels are capable to distribute our product?
      Score 1 if no, 5 if yes (favorable). “Capability Analysis”
      Others?
      3.5d Market Channel Conditions
      Score 1 if no (unfavorable), 5 if yes (favorable).
    • 162. Is it easy to establish a presence (company, office)?
      Score 1 if no, 5 if yes (favorable). “Doing Business In”
      Country has anti-trust legislation (competition laws) in place?
      Country is a member of the WTO?
      Intellectual property protection &
      Level of corruption
      3.5e Legal Environment
      Score 1 if no (unfavorable), 5 if yes (favorable).
    • 163. Questions?
    • 164. More than just market numbers and costs (e.g. tariff’s & transportation)
      Include administrative realities & bureaucracy
      Include legal protection & distributor strength
      Include telecoms and transportation
      This weighting will calculate the best market based on all the criteria you chose (highest weight)
      3.6 The best target market
    • 165. 3.6 a Main Criteria Weighting
    • 166. Result:
    • 167. Conclusion:
      A summary or important information for each section (at least the critical ones)
      Talk especially about unique factors or items which you do not agree with the computer results
      Recommendation:
      What choice your group will make regarding #1 country to export to (so far)
      3.7 Prepare your Conclusion (summary) and Recommendation
    • 168.
      • International tariff database:
      • 169. http://www.export.gov/logistics/eg_main_018142.asp
      • 170. Harmonized US Tariff Schedule:
      • 171. http://www.usitc.gov/tariff_affairs/
      Resources:
    • 172. Entry Strategy and Marketing Plan
      Module 4:
    • 173. Goals: To determine the most effective entry strategy and develop a marketing plan based on previous analysis of:
      Company goals, resources and strengths & weaknesses
      Product and target market, and
      Available distribution alternatives
      Topics:
      Entry Mode compared to company goals
      Product / Market Strategy
      Distribution Strategy
      Shipping
      Pricing and Payment Plans
      Promotion
      Projected Profit/Loss Statement
      4.0 Module Introduction
    • 174. Consider your realistic market entry options (likely export oriented)
      Estimate how each different entry mode would effect your sales success
      Estimate on a comparative basis to the other options
      Which are better, (higher score) which are worse (lower score)
      Enter your numerical ranking.
      This weighting will calculate the best entry option for you.
      4.1 Entry Mode
    • 175. Enter scores for each potantial market entry alternative
      5 = good / favorable
      1 = not good / unfavorable
      Ex. Would Corporate Owed Retail stores be good for sales?
      Only choose potential entry options.
      Consider how that entry alternative would impact sales.
      Also consider long term market knowledge development.
    • 176. Entry Mode Choice Evaluation Example
      How would using “Company Owned Retail Sales” effect your export sales: 1= not well, 5 very well?
      How would using “Company Owned Retail Sales” effect your control over the export sales process?
      What effect would using “Company Owned Retail Sales have on your companies international experience?
      What effect would using “Company Owned Retail Sales have on your competitive capability?
      What effect would using “Company Owned Retail Sales have on your competitive capability?
      How would using “Company Owned Retail Sales” help
    • 177. Calculate weights to find a quantitative ranking.
      Explain your choice in 4.1b.
      Speak about your best option, then remaining options.
    • 178. Focus on your specific markets
      Enter data in sections that relate to your target market
      Add additional factors if not present using“other”
      Place a check mark in activate box.
      Use the information from 4.2a section to complete 4.2c Describe the market using bullets
      Consider your target market, potential distributors and create a promotion plan
      Goal is what you will accomplish
      Objective is how you will do it
      Time is the date of completion
      4.2 a, b, c Product / Market Strategy
    • 179. Short sentence to describe target customer…
      Marketing goals should be very specific for your chosen target market: include dates, costs, personnel..
      Target market & marketing goals
    • 180. Questions?
    • 181. Channel Issues
      Describe any specific licenses or known legal/admin threats with regard to distributors – this can be critical.
      Choose the best channel (check all that apply)
      Discuss the relative advantages and disadvantages from your top choices
      Remember, your top choice may not be interested
      Remember, your top choice may not be available - legal
      Remember, your top choice may not be capable – financial or technical
      4.3 Distribution Strategy & Plan
    • 182. Port of origin (E.g. EXW – Taichung, Taiwan)
      Select INCOTERM E.g. ExWorks [From Factory]
      Determine the shipping origination (city, port)
      Determine the destination port
      Port of destination (CIF – USSEA – Seattle, USA
      http://www.worldportsource.com/countries.php
      http://www.worldportsource.com/ports/CHL.php
      Transportation Carrier Costs
      Air
      Ocean
      Motor / Truck
      Rail
      4.4a-c Shipping Details
    • 183. Air Transport
      Less Than Load Trucking
      Marking/Labeling
      Loading
      Total US$ 1,800
      Shipping Details
    • 184. Choose required shipping documents
      Based on your product and country and transportation method
      Export Price List√
      Commercial Invoice √
      Bill of Lading
      Ocean Bill
      Shippers Export Declaration √
      Dock Receipt
      Certificate of Origin √
      See EIMSO for examples related to your product.
      Insurance Certificate
      Power of Attorney
      Pro Forma Invoice √
      Packing Slip
      Airway Bill √
      Truck Bill of Lading √
      Shippers Instructions
      4.4d Documentation Requirements
    • 185. Check the ones that apply to your product/company/ shipping method
      Example Documents
    • 186. Channel Issues
      Describe any specific licenses or known legal/admin threats with regard to distributors – this can be critical.
      Choose the best channels (check all that apply)
      Discuss the relative advantages and disadvantages from your top choices
      Remember, your top choice may not be interested
      Remember, your top choice may not be available - legal
      Remember, your top choice may not be capable – financial or technical
      4.5 Pricing/Payment Methods
    • 187. 4.5a-c Export Price EXW Taichung, Taiwan
      Price: Cost Plus Pricing (Fixed? + Variable + Profit)
      Decide if fixed costs are to be included or not based on weather there is existing unused factory capacity
      Seek data from online sources: “XXX manufacturing costs”
      iPhone example : http://www.dslreports.com/forum/r18978878-iPhone-manufacturing-cost
      Our tea example = No fixed costs to start, variable is $2=Profit is $3
      Shipping Costs: Use from Section 4.3
      Wholesale Price: Total Cost * Wholesale Markup
      Cost of Tea = US$5 * 50% Markup = US$7.50
      Retail Price: Wholesale Price * Retail Markup
      Wholesale Price US$7.50 * 50% Markup = $11.25
    • 188. EX Works (Factory) Price 1,000 units.
      Cost (2) + Profit (3)
      Add
      -Shipping
      -Forwarder
      -Duties
      = Landed Cost in Country
      Enter Markup’s = 50% or so.
      Export Price
    • 189. 4.5 d-e Terms of Sale & Payment Methods
      Determine INCOTERM for Shipping & Legal Responsibility issues
      E.g. EXW (ExWorks), CIF (Cargo Insurance Freight), FOB (Free on Board)
      Consider shipping method and competitive situation
      Consider liability and ownership of cargo
      Choose best payment alternative
      Consider existing relationship, economy, value of goods
      Consider common practice in industry
      Letter of credit is most popular export financing method
    • 190. Consider advantages and disadvantages of each alternative, then choose your best option.
      Incoterms and Financial Optoins
    • 191. 4.6 Promotion Tips
      Select promotional options & estimate costs:
      Consider international coach travel expenses for 1 individual at a minimum of US$5,000/week.
      Consider/estimate costs to deliver trade show materials.
      Consider relationship building practices in each country, cost of entertainment, local travel, shows and memberships if desired.
      Consider internet website as a required mechanism localized for language and cultural access. Mobile internet access should also be evaluated.
    • 192. Trade Shows
      Travel (CEO)
      Government Programs
      Printed Materials
      Advertising
      Promotion
    • 193. 4.7a Projected Profit/Loss (P/L)
      Review Company Sales Potential and Total market Potential to estimate your unit sales and price.
      Initial years sales should be a fraction of ongoing; perhaps growing by 100% for the first two years, recall Derived Data
      Cost of goods sold may be found from Module 1.1c or your current estimate of the materials and labor involved in producing a unit of your product.
      Operating expenses may be found in 1.1c or may be estimated again. Manufacturing expenses may typically range in the 10-30% range; this is dependent on your industry.
      Calculate Net Profit.
    • 194. First Year total unit sales & revenue
      Second year forecast & third year forecast
      OP Expenditure is your promotional expenses plus any other expenses incurred resulting from the specific export project
      Projected P & L
    • 195. 4.7b-c Break Even Point & Scenario Planning
      How many units are required to break even?
      Based on a percentage of gross profit
      Unit sales calculated by dividing operating expenses by percentage of gross profit
      Profit & Sales Case Scenarios
      Choose best case: (I usually choose my actual planned for case here)
      Choose worst case:
      You may reduce sales by a fraction (25%, 50%, 75%) considering economic conditions, forecast errors, selling difficulties or the reliability of your information
      You should also consider if you selling expenses will rise:
      This is often the case in emerging markets as estimates are difficult to identify
    • 196. Break Even PointBest Case & Worst Case Scenarios
    • 197. Conclusion / Summary:
      A summary sentence or important information for each section
      Talk especially about unique factors or items which were not expected and had an impact on your strategy
      Recommendation:
      What choice your group will make (go or no-go based on profitability)
      What would be the next steps to make this plan a reality?
      What is the timing involved for any next steps?
      4.8 Prepare your Conclusion (summary) and Recommendation
    • 198. Conclusion & Recommendation
    • 199. Questions?
    • 200. Course Integration & Presentation
      Module’s 1-4:
    • 201. Review & Refine Summary /Conclusion for each Module (1-4).
      Make sure you mention the important findings (learning's, insights, revelations) from each sub-module (e.g. 1.1, 1.4, 2.3, 4.1, etc).
      This information should explain and tell a logical story.
      This should be objective not persuasive.
      If there is missing data/information, make an assumption and state that the data was not available.
      Cite your data sources when appropriate – mention when you make an educated estimate (“guestimate”)
      Your plan should tell why your chosen product and country are the best options for an export project.
      Course Integration: Export Plan
    • 202. Executive Summary Format
      Uses the same information from your Module Conclusion sections. Must be factual, reliable – well written. Enter this data in EIMSO Executive Summary sections.
      Re-format it when necessary into paragraph form. Use complete sentences, proof-read for grammar and spelling.
      Must tell a logical story.
      EIMSO automatically creates lower blue sections. (TOC ->Appendices)
    • 203. 15-20 minutes – approximately 15-20 slides
      Everyone participates in the presentation
      Submit our presentation slides and your executive summary before your presentation.
      Goal is to explain and recommend a specific product for export to a specific country, including modules 1-4:
      Company Situation– Industry Analysis
      Country Candidates – User Segments
      Market Selection – Entry Strategy & Marketing Plan
      Cost estimates (Marketing, Shipping, Documentation, COGS)
      P/L: Profit & Loss Analysis
      Presentation Contents
    • 204. C.E.O PowerPoint Presentation Format
      Uses the same information from the Executive Summary.
      Simply re-format it into PowerPoint slides – 15-20 slides for a 15-20 minute presentation.
      Change your communication from objective to persuasive to suggest your audience agree with your final recommendation and show confidence.
      Must tell a logical story; Recommendation is important.
      All group members must be able to discuss all sections. Sometimes people get sick or change jobs.
    • 205. C.E.O. Export Plan Presentation
      Module’s 1-4:
    • 206. 15-20 Minutes Each Group
      5 minute audience Q&A
      Groups 1-X
    • 207. Please take a few minutes to complete the course evaluation.
      Turn in your evaluation to the student leader.
      Thank you!
      Course Evaluation
    • 208. Consider the next class…
      What advice would you give to next semester’s students?
      White a one page note from your group to next years student groups on how they can be successful in this class.
      Submit to Instructor as you leave.
      Thank you.
      Final Thoughts
    • 209. International Business is as much an Art as it is a Science.
      Wrap Up

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