International Business Study Guide
Ch 16, 17 18, 19
Chapter 16
Why export?
To serve markets where the firm has no or limited production facilities.
To satisfy a host government's requirement that the local subsidiary have exports.
To remain price competitive in the home market.
To test foreign markets and foreign competition inexpensively.
To meet actual or prospective customer requests for the firm to export.
To offset cyclical sales in the domestic market
To achieve additional sales, which will allow the firm to use excess production capacity to lower per-unti fixed costs
To extend a product's life cycle by exporting to currently unserved markets where the product will be at the introduction stage of the life cycle
To respond strategically to foreign competitors that are in the firm's home market by entering their home market
To achieve the success the firm's management has seen others achieve by exporting
To improve the efficiency of manufacturing equipment, which usually works better at or near full capacity.
The first step in locating foreing markets is to determine whether a market exists for the firm's products
Export Marketing Plan terms of sale – conditions of a sale that stipulate the point at which all costs and risks are borne by the buyer
INCOTERMS – universal trade terminology developed by the International Chamber of Commerce. 13 trade terms that describe the responsibilities of the buyer and seller in international trade.
FOB (free on board) – pricing policy in which risks pass from seller to buyer at the factory door; U.S. Equivalent of ex-works. Means all costs and risks from that point on are borne by the buyer.
FAS (free alongside ship—port of call) – the seller pays all the transportation and delivery expense up to the ship's side and clears the goods for export
CIF (cost, insurance, freight—foreign port) – the price includes the cost of the goods, insurance, and all transportation and miscellaneous charges to the named port of final destination
CFR (cost
Chapter 16
Why export?
To serve markets where the firm has no or limited production facilities.
To satisfy a host government's requirement that the local subsidiary have exports.
To remain price competitive in the home market.
To test foreign markets and foreign competition inexpensively.
To meet actual or prospective customer requests for the firm to export.
To offset cyclical sales in the domestic market
To achieve additional sales, which will allow the firm to use excess production capacity to lower per-unti fixed costs
To extend a product's life cycle by exporting to currently unserved markets where the product will be at the introduction stage of the life cycle
To respond strategically to foreign competitors that are in the firm's home market by entering their home market
To achieve the success the firm's management has seen others achieve by exporting
To improve the efficiency of manufacturing equipment, which usually works better at or near full capacity.
The first step in locating foreing markets is to determine whether a market exists for the firm's products
Export Marketing Plan terms of sale – conditions of a sale that stipulate the point at which all costs and risks are borne by the buyer
INCOTERMS – universal trade terminology developed by the International Chamber of Commerce. 13 trade terms that describe the responsibilities of the buyer and seller in international trade.
FOB (free on board) – pricing policy in which risks pass from seller to buyer at the factory door; U.S. Equivalent of ex-works. Means all costs and risks from that point on are borne by the buyer.
FAS (free alongside ship—port of call) – the seller pays all the transportation and delivery expense up to the ship's side and clears the goods for export
CIF (cost, insurance, freight—foreign port) – the price includes the cost of the goods, insurance, and all transportation and miscellaneous charges to the named port of final destination
CFR (cost