Ch06

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Ch06

  1. 1. Importing, Exporting, and Trade Relations 6-1 Importing Procedures 6-2 Exporting Procedures 6-3 Importance of Trade Relations 6-4 The Nature of Competition CHAPTER 6
  2. 2. LESSON 6-1 Importing Procedures <ul><li>GOALS </li></ul><ul><li>Explain the importance of importing. </li></ul><ul><li>Identify the four steps for importing. </li></ul>
  3. 3. Importance of Importing <ul><li>Product demand </li></ul><ul><li>Lower costs </li></ul><ul><li>Production inputs </li></ul>
  4. 4. Importing Activities <ul><li>STEP 1: Determine demand </li></ul><ul><li>STEP 2: Contact suppliers </li></ul><ul><li>STEP 3: Finalize purchase </li></ul><ul><li>STEP 4: Receive goods </li></ul>
  5. 5. Import Assistance <ul><li>Customs and Border Protection (CBP) </li></ul><ul><li>Food and Drug Administration (FDA) </li></ul><ul><li>U.S. Department of Agriculture (USDA) </li></ul>
  6. 6. LESSON 6-2 Exporting Procedures <ul><li>GOALS </li></ul><ul><li>Identify the steps of the exporting process. </li></ul><ul><li>Describe the exporting of services. </li></ul>
  7. 7. The Exporting Process <ul><li>STEP 1: Find potential customers </li></ul><ul><li>STEP 2: Meet the needs of customers </li></ul><ul><li>STEP 3: Agree on sales terms </li></ul><ul><li>STEP 4: Deliver products or services </li></ul><ul><li>STEP 5: Complete the transaction </li></ul>
  8. 8. Sales Terms <ul><li>Free on board (FOB) </li></ul><ul><li>Cost, insurance, and freight (CIF) </li></ul><ul><li>Cost and freight (C&F) </li></ul>
  9. 9. Export Documents <ul><li>Bill of lading </li></ul><ul><li>Certificate of origin </li></ul>
  10. 10. Obstacles to Exporting <ul><li>No company representatives in foreign countries </li></ul><ul><li>Products not appropriate for foreign consumers </li></ul><ul><li>Insufficient production facilities to manufacture enough goods for exporting </li></ul><ul><li>High costs of doing business in other countries </li></ul><ul><li>Difficulty understanding foreign business procedures </li></ul><ul><li>Difficulty obtaining payment from foreign customers </li></ul>
  11. 11. Commonly Exported Services <ul><li>Hospitality </li></ul><ul><ul><li>Hotels, food service </li></ul></ul><ul><li>Entertainment </li></ul><ul><ul><li>Movies, music, television production, amusement parks </li></ul></ul><ul><li>Financial services </li></ul><ul><ul><li>Insurance, real estate </li></ul></ul>
  12. 12. LESSON 6-3 Importance of Trade Relations <ul><li>GOALS </li></ul><ul><li>Identify the economic effects of foreign trade. </li></ul><ul><li>Describe the types of trade agreements between countries. </li></ul>
  13. 13. The Economic Effect of Foreign Trade <ul><li>Balance of trade </li></ul><ul><ul><li>Trade deficit </li></ul></ul><ul><ul><li>Trade surplus </li></ul></ul><ul><li>Balance of payments </li></ul><ul><ul><li>Positive, or favorable </li></ul></ul><ul><ul><li>Negative, or unfavorable </li></ul></ul>
  14. 14. Trade Agreements <ul><li>Promote economic development </li></ul><ul><li>Encourage international business activities </li></ul>
  15. 15. The World Trade Organization <ul><li>Deals with rules of trade between nations </li></ul><ul><li>Helps producers of goods and services, exporters, and importers conduct their business </li></ul><ul><li>Encourages international trade </li></ul>
  16. 16. Regional Cooperation <ul><li>Economic community </li></ul><ul><li>Common market </li></ul>
  17. 17. Barter Agreements <ul><li>Direct barter </li></ul><ul><li>Countertrade </li></ul>
  18. 18. Free-Trade Zones <ul><li>An area designated by a government for duty-free entry of nonprohibited goods </li></ul><ul><li>Commonly located at a point of entry into a nation </li></ul>
  19. 19. LESSON 6-4 The Nature of Competition <ul><li>GOALS </li></ul><ul><li>List factors that affect international business competition. </li></ul><ul><li>Explain the types of competitive market situations. </li></ul>
  20. 20. International Business Competition <ul><li>Factors affecting competition </li></ul><ul><ul><li>Number of companies </li></ul></ul><ul><ul><li>Business costs </li></ul></ul><ul><ul><li>Product differences </li></ul></ul><ul><li>Benefits and concerns of competition </li></ul>
  21. 21. Types of Competitive Situations <ul><li>Pure competition </li></ul><ul><li>Monopolistic competition </li></ul><ul><li>Oligopoly </li></ul><ul><li>Monopoly </li></ul>
  22. 22. Competitive Market Situations <ul><li>Monopolistic Competition </li></ul><ul><li>Many sellers </li></ul><ul><li>Slightly different product </li></ul><ul><li>Oligopoly </li></ul><ul><li>Few sellers </li></ul><ul><li>Slightly different product </li></ul><ul><li>Pure Competition </li></ul><ul><li>Many sellers </li></ul><ul><li>Same product </li></ul><ul><li>Monopoly </li></ul><ul><li>One seller </li></ul><ul><li>Usually government regulated </li></ul>

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