Selling international

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Selling international

  1. 2. <ul><li>Ready Market </li></ul><ul><li>Sales = Profit </li></ul><ul><li>Increased Product Life Cycle </li></ul><ul><li>Minimize Domestic Downturns </li></ul>
  2. 3. Purpose <ul><li>Manage Resources </li></ul><ul><li>Manage Risk </li></ul><ul><li>Manage Cash Flow </li></ul>
  3. 4. <ul><li>Customer Risk </li></ul><ul><li>Country Risk </li></ul><ul><li>Flexible Terms </li></ul><ul><li>Problem Resolution </li></ul>
  4. 5. Same as Domestic <ul><li>Legal Name </li></ul><ul><li>Related Companies </li></ul><ul><li>Authorized Signers </li></ul><ul><li>Time In Business </li></ul><ul><li>Financials </li></ul><ul><li>References </li></ul>Customer Risk
  5. 6. <ul><li>FCIB </li></ul><ul><li>D & B </li></ul><ul><li>Veritas </li></ul><ul><li>Coface </li></ul><ul><li>Euler </li></ul><ul><li>Local Presence </li></ul>Sources
  6. 7. <ul><li>Political </li></ul><ul><li>Monetary </li></ul><ul><li>Cultural </li></ul><ul><li>Experience </li></ul>
  7. 8. Political <ul><li>Stability of Government and Policies </li></ul><ul><li>Trade Balances / Reserves </li></ul><ul><li>Government Interest in “your” Industry </li></ul>
  8. 9. Monetary <ul><li>Monetary Controls </li></ul><ul><li>Hard Currency </li></ul><ul><li>Exchange Fluctuation </li></ul>
  9. 10. Currency Sell @ per unit cost 100.00 Peso Budget cost @ US $8.50 FX @ 10.50 89.25 Peso 10.75 profit Actual cost @ US $8.50 FX @11.50 97.75 2.25 profit lost 8.5% profit
  10. 11. Cultural <ul><li>Meaning of Time </li></ul><ul><li>Ownership of Debt </li></ul><ul><li>Oral or written Contract </li></ul>
  11. 12. Country Risk Assessment <ul><li>Bank Reports </li></ul><ul><li>Rundt’s Weekly </li></ul><ul><li>Periodicals </li></ul><ul><li>U.S. Foreign and commercial service reports </li></ul><ul><li>FCIB Country Reports </li></ul><ul><li>FCIB Credit and Collection Surveys </li></ul><ul><li>FCIB / Political Risk Reports </li></ul><ul><li>IMF </li></ul><ul><li>Country Agencies </li></ul><ul><li>World Bank </li></ul><ul><li>Colleges / Universities </li></ul><ul><li>Local / Regional International Groups </li></ul><ul><li>Local Agents </li></ul><ul><li>Export-Import Bank </li></ul>
  12. 13. Experience <ul><li>Presence Direct / Indirect </li></ul><ul><li>Others in Same Industry </li></ul><ul><li>Others Broad Basis </li></ul>
  13. 14. On Going Project <ul><li>Changes are Key </li></ul><ul><li>Continued Two Way Communication </li></ul><ul><li>Continued Evaluation and Revision </li></ul>
  14. 15. Payment Risk <ul><li>Cash in Advance </li></ul><ul><li>Confirmed Letter of Credit </li></ul><ul><li>Letter of Credit </li></ul><ul><li>Documentary Collection </li></ul><ul><li>Open Account </li></ul>Least Risk Most Risk
  15. 16. Risk Mitigation <ul><li>Delay </li></ul><ul><li>Flexible Terms </li></ul><ul><li>Problem Resolution </li></ul>
  16. 17. Risk Mitigation Foreign Exchange <ul><li>Natural Hedge </li></ul><ul><li>Hedge Contract </li></ul>
  17. 18. Risk Mitigation <ul><li>AVAL </li></ul><ul><li>PAGARE’ </li></ul><ul><li>Personal Guarantee </li></ul><ul><li>Contract Tied to Security </li></ul><ul><li>Guarantee from Related Party </li></ul><ul><li>Credit Insurance </li></ul><ul><li>Forfaiting </li></ul>Payment

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