Importing and Exporting from the USA. Summary of class in MS-ITM

1. Importing and ExportingImporting and Exporting
John Beasley
TMGT 7500 - 01

2. Introduction To International BusinessIntroduction To International Business
As a Manager You Must Understand the Cultural
Context of a Region or County Before You Can
Understand How Business Operates in a Given
Economy.

3. Business In A Cultural ContextBusiness In A Cultural Context
A Cultures Story Defines the Rules for Social
Engagement and Social Standing Within That
Society. The Story Largely Determines the
Distribution of Wealth in That Culture.
(Example: Function of Roman Catholic Church in the Roman
Empire was to define Universalism - Plato’s Republic).

4. The Social ProcessThe Social Process
Go From Outside the Group – Behavior is
viewed as Dysfunctional
(Indoc) Enter a Conversion Experience.
Go From Outside The Group, To Inside The
Group. (Pavlov’s theories on conversion)
Assimilation – memorize the story. Live the
story.

5. Business In Cultural ContextBusiness In Cultural Context
Examples:
CULTURE CONTROLING STORY
Classical Greece: Homer’s Iliad and Odyssey
Roman Empire (Commonwealth): Virgil’s Aeneid.
Jewish Culture: Torah
Christian Culture: Bible
Islamic Culture: Koran
Japanese: ZEN - Mahayana Sutura’s
( koans - Sound of One Hand Clapping)
(Alfred North Whitehead, Process and Reality)
Maritime: Boatswain’s Pipe
China: Chairman Mao’s Little Red Book
(Sin/guilt Based Cultures Vs. Shame/honor Based Culture)

6. Theories On TradeTheories On Trade

Mercantilism

Economic Nationalism

Globalization

7. MercantilismMercantilism
Nationalism
Balance of trade in favor of exports
A system of tarriffs and subsidies
(According to John Locke the problem with this
system is the hording of assets. Utilitarianism =
Epicureanism as presented by Lucretius 50 B.C.)

8. MercantilismMercantilism
Some Other Systems That Do Copy Several Mercantilist Policies, Such As
Japan's Economic System, Are Also Sometimes Called Neo-mercantilist.[32] In
an Essay Appearing in the 14 May 2007 Issue of Newsweek, Economist Robert
J. Samuelson Argued That China Was Pursuing an Essentially Mercantilist Trade
Policy That Threatened to Undermine the Post-world War II International
Economic Structure (Wikipedia Encyclopedia, Mercantilism)

9. Economic NationalismEconomic Nationalism

Export Dominated Philosophy

Make More Than They Spend

Produce More Than They Consume

Export More Than They Import

(Weigh the Utility Value of Assets, Enlightened Mercantilism)
Germany, Japan, Hong Kong, South Korea, Taiwan, Singapore,
China

10. GlobalizationGlobalization
Integration of National Economies Into the International
Economy Through:

Trade

Foreign Direct Investment

Capital Flows

Migration of Technology

(Globalization is utilitarian colonialization)

11. Exodus Of CapitalExodus Of Capital
1997-98 Asian Stock Market Crashed
Opportunity to Move Capital
(P/E Ratio, P/B Ratio)

Exodus of U.S. Flagged Ships

Exodus of Manufacturing

Exodus of Capital

12. ExportingExporting

Direct Marketing

Indirect Marketing

13. DirectDirect

Limited Exposure

Opportunity to Test Market

A Learning Experience

Greater Control Over Process

U.S. Producer Deals Directly With Foreign Buyers

Generally Higher Profits

14. Indirect SellingIndirect Selling

Uses Local Intermediary

Export Management Company (EMC)

Export Trading Company (ETC)

U.S. Producer Has No Contact With Foreign
Buyers

15. Direct Or Indirect?Direct Or Indirect?
A Major Factor in Determining to Use Direct
or Indirect Selling Is Available Resources.
In the Early Period It Is Common to Have
Common Management Between Domestic
and Exported Sales (HBS, P 2)
(Do you understand the culture, do you have
the capital?)

16. Cooperative Contractual RelationshipsCooperative Contractual Relationships
Firms Derive Income From Providing
Service’s Such As Technology, Expertise,
Resources, Engineering, Design, and
Perhaps a Trade Name.

17. Cooperative Contractual RelationshipsCooperative Contractual Relationships
Example:
In the early 1960’s Kieser Manufacturing – Hutson-Willis
(JEEP) designed engines for Renault (France) for the
South American market. Rambler-Nash merged to form
American Motors Corporation (AMC) and in the process
acquired Willis Jeep.

18. LicensingLicensing
Is When a Company Sells the Rights to
Produce and Market It’s Products in a
Foreign Market (HBS, P. 3)

19. LicensingLicensing
Example:
Rambler Licensed the Production of Rambler
Rebel’s in Argentina to Renault. The Car
Becomes the Torino, a Best Seller in
Argentina for About 20 Years Until the Mid
1980's.

22. FranchisingFranchising
Typically a Business System Is Sold or Franchised
to a Franchisee (HBR, P. 3). It Is Popular in Many
Service Industries Such As Restaurants, Auto Parts
Houses, Auto Repairs, Tire Stores, Appliance
Stores, Hardware Stores, Florists, Shoe Stores,
Coffee Shops, Donut Shops, Glasses, Beauty
Salons, Health Food Grocery Stores, and Vitamin
Shops.

23. FranchisingFranchising

24. SubsidiariesSubsidiaries
A Major Type of Investment Is to Produce a
Subsidiary Company in a Foreign
Market.

Overcomes Import Restrictions

Greater Market Penetration

Spreads R&D Expenses Over Larger Sales

Large Financial and Management
Requirements
(HBR, P. 3).

25. SUBSIDIARIESSUBSIDIARIES
Euro-DisneyEuro-Disney

26. Beneteau.png

28. Strategic AlliancesStrategic Alliances
Joint Ventures
Example:
In the 1970’s Renault Began Designing Cars
for American Motors (Rambler). By the 1980’s
Renault Began Selling R5’s and R9’s
(Alliance) Through AMC Dealerships. Renault
Bought a Financial Interest in AMC.

29. Protecting ProductsProtecting Products
Copyright
– Intellectual property and concepts
– Microsoft
Patents
– Physical property and their designs
– Edison Film Studios

30. Sources of Export AssistanceSources of Export Assistance
U.S. Department of CommerceU.S. Department of Commerce
45 District Offices
Advice on Industry, Countries, Finance
Book: Basic Guide to Exporting
Book: Exporters Guide to Federal Resources
for Small Business (SBA)

31. Sources of Export AssistanceSources of Export Assistance
International Trade AdministrationInternational Trade Administration
World Traders Data Report
Provides Background Information on Importers and
Exporters Worldwide.
Agent Distributor Service (ADS)
Does Searches for Overseas Agents and Distributors for
Your Type of Product.
National Trade Data Bank (NTDB)
CD Providing - Market Research, Statistics, Foreign
Traders Index.

32. Sources of Export AssistanceSources of Export Assistance
International Trade AdministrationInternational Trade Administration
Basic Guide to Exporting
150 Page Guidebook on Exporting, Shipping, Payment Methods,
Documentation,
And Marketing Tips.
Advertising Services Through the
“Commercial News USA”
Monthly Journal on Exporting
Trade Opportunities Program
Officers in 65 Embassies Around the World to Assist Exporters.

33. Sources of Export AssistanceSources of Export Assistance
International Trade AdministrationInternational Trade Administration
Commercial Information Management System

3500 Marketing Research Reports About World Export;

Demand

Trade Barriers

Profiles of Buyers

Trade Events and Shows

Competition

Labor and Trade Data

Custom Sales Survey

34. Sources of Export AssistanceSources of Export Assistance
Custom Sales SurveyCustom Sales Survey
The Commerce Department Will Provide a Marketing Potential Survey for
Your Company.

Is There a Market for the Product?

Cost, Competition, Price, Place, Promotion

Available Marketing Channels

Consumer Survey, (Price, Quality, Availability, Service)

What Is the Best Process for Advertising

What Are the Barriers to Entering the Market?

Who Might Carry or Represent the Product?

Any Opportunities for Joint Ventures or Licensing?

35. Sources of Export AssistanceSources of Export Assistance
Export-import Bank USAExport-import Bank USA
The Eximbank Helps US Companies to Compete
Against Foreign Government Subsidized Financing
in Foreign Markets.

Lending Program

Guarantee Program

Working Capital Program

Insurance

36. Sources of Export AssistanceSources of Export Assistance
Small Business AdministrationSmall Business Administration
(SBA)(SBA)
Field Offices Provide;

Counseling

Referral to Assistance Programs

Initial Attorney Consultation

International Trade and Export

Business Management Training

37. Sources of Export AssistanceSources of Export Assistance
US Department of AgricultureUS Department of Agriculture
(USDA)(USDA)
The U.S. Remains the Worlds Largest Exporter of
Agricultural Items. All of These Services Are Also
Available to Agricultural Firms.

38. Import ExportImport Export
Almost every nation offers some form of
assistance in exporting, an exporting kit.
If you intend to do import – export one of
the most important things you can do is get
these manuals from a number of countries;
Turkey, Holland, Germany, Japan, China
and compare their packages.

39. BibliographyBibliography
Culture
Toynbee, Arnold, A Study of History, Abridged, Oxford University Press, Oxford, 1972
Erikson, Erik H., Childhood and Society, W.W. Norton & Company, New York, 1963
See Also Karl Jaspers Social Development Theories. When Karl Jaspers Refers to Second Level Shame Based
Societies and Third Level Sin Based Societies, He Is Likely Referring to Erik Erikson’s Eight Stages of
Development, the Eight Ages of Man. This Is Not Defined Within Jaspers Work.
Karl Jaspers, Way to Wisdom, (Yale University Press, New Haven, Conn., 1960) Pp.99-103
Alfred North Whitehead, Process and Reality,
(Free Press, New York, New York, 1979) P. 39

40. BibliographyBibliography
Digby Ditzell, The Protestant Establishment: Aristocracy & Caste in America, (Random House, New
York,1964) Pp. xi - Xii
NOTE: Everything I Have Defined Here Holds True for Western Societies, Not for Eastern Societies.
In Western Culture Story Conquers Chaos, Story Defines Society. (I Would Call These Define the System
Societies.)
In Eastern Culture Story Shields One From Ultimate Reality or Wholeness, the Reality of What Is Actually
Happening. (China, Japan, Korea) (I Would Call These Cut the Bullshit, What Is Actually Happening
Societies.) Two Opposite Ways of Processing Reality.

41. BibliographyBibliography
Outline of Mercantilism
▪ That Every Inch of a Country's Soil Be Utilized for Agriculture, Mining or Manufacturing.
▪ That All Raw Materials Found in a Country Be Used in Domestic Manufacture, Since Finished Goods
Have a Higher Value Than Raw Materials.
▪ That a Large, Working Population Be Encouraged.
▪ That All Export of Gold and Silver Be Prohibited and All Domestic Money Be Kept in Circulation.
▪ That All Imports of Foreign Goods Be Discouraged As Much As Possible.
▪ That Where Certain Imports Are Indispensable They Be Obtained at First Hand, in Exchange for
Other Domestic Goods Instead of Gold and Silver.
▪ That As Much As Possible, Imports Be Confined to Raw Materials That Can Be Finished [in the Home
Country].
▪ That Opportunities Be Constantly Sought for Selling a Country's Surplus Manufactures to
Foreigners, So Far As Necessary, for Gold and Silver.
▪ That No Importation Be Allowed If Such Goods Are Sufficiently and Suitably Supplied at Home.
(Wikipedia Encyclopedia, Mercantilism)

42. BibliographyBibliography
The Asian Financial Crisis of 1997 - 1998 and the Behavior of Asian Stock Markets
By Urbi Garay
http://www.westga.edu/~bquest/2003/asian.htm
Galbraith, John Kenneth, The Great Crash of 1929, Houghton Mifflin Co., N.Y., N.Y., 1961
Foley, James F., The Global Entrepreneur: Taking Your Business International
QuickMBA / Strategy / Foreign Market Entry
http://www.quickmba.com/strategy/
Quick MBA Excel Spreadsheets for Business - Free
http://download.cnet.com/3001-2077_4-10475788.html?spi=7965efb919046414e0c29548e4f2992e
Free Spreadsheets From Google
Http://www.google.Com/google-d-s/spreadsheets/#utm_campaign=en&utm_source=en-ha-na-us-
bk&utm_medium=ha&utm_term=spreadsheet%20programs

43. BibliographyBibliography
Harvard Business School 9-395-034 (Case Study)
August 11, 1994
Note on Entering Foreign Markets Opportunities for Smaller U.S. Companies
(Maritime = Episcopal)
To Be Episcopal in the USA Is to Agree That You Are on the Same Page With Successful People in Society.
This Is to Say You Adhere to the English Principles of Business Enterprise.
Digby Ditzell, The Protestant Establishment: Aristocracy & Caste in America, (Random House, New
York,1964) Pp. xi - Xii
Economic History of England Beginning in 1700 to 1900, Economic History of USA 1800 to 2000
The South Sea Company Was a British Joint Stock Company That Traded in South America During the 18th
Century. Founded in 1711, the Company Was Granted a Monopoly to Trade in Spain's South American
Colonies As Part of a Treaty During the War of Spanish Succession. In Return, the Company Assumed the
National Debt England Had Incurred During the War. Speculation in the Company's Stock Led to a Great
Economic Bubble Known As the South Sea Bubble in 1720, Which Caused Financial Ruin for Many. In Spite
of This It Was Restructured and Continued to Operate for More Than a Century After the Bubble.

44. BibliographyBibliography
Stock Price / Earnings Ratios
Stock Price / Assets Ratios
Stock Price / Book Value Ratios
The P/E or Price/earnings Ratio, and the P/B or Price/book Ratio. Rising Stock Prices and Earnings
May Well Yield a Flat P/E Ratio (I.E. There Is No Bubble Since Higher Stock Prices Are Justified by
“Fundamentals”, at Least As It Pertains to the P/E Ratio.)

45. DefinitionsDefinitions
Social Standing
Colonialism
Economic Nationalism
Globalism
Utilitarianism
Epicureanism

46. BibliographyBibliography