Keywords: MBA of International Trade Management scholarship degree business business strategic

MBA of International Trade Management

These are some brief notes on International Trade Management - 1

Dr.  S.  Maurer,  
MBA Professor

Companies in lesser dëveloped countries that have achieved local success may find it necessary to adopt an “up-market strategy” whereby the product may have to be designed to meet world class standards.

Engineering changes needed: Environmental Requirements—Combustion engines,  for example,  may be required to use unleaded fuel only.

Buyer preferences in a foreign market may also lead an exporter based in more advanced countries to modify its product.

Common engineering changes needed to conform to the country specific requirements.

Delivery of a rail car is normally affected when the car is placed on a team track or spotted.  Republic Carloading & Distribution Co.  v.  Missouri Pacific R.R.  Co.,  302 F.2d 381,  386 [8th Cir.  1962].

In the final analysis the extent of adaptation will be driven by the corporate culture,  customer and market orientation,  the market potential for the product scheduled to be exported and the importance of international marketing for corporate growth and survival.

As tariff barriers [tariffs,  duties and quotas] are eliminated around the world in accordance with the requirements of participation in the World trade Organization [WTO],  other non-tariff barriers,  such as product standards,  are proliferating.

Sell the standard products you make for your country market in as many foreign markets as will accept them.  Adapt your standard products to meet foreign market needs more closely.  Adapt your products to meet both foreign and domestic market criteria at the same time,  i.e.  create a universal [global] product.

The level of income,  the level of education,  and the availability of energy are all factors that help predict the acceptance of a product in a foreign market.

While many enterprises recognize the potential of the global marketplace,  the idea of taking it on can be extremely daunting.  Experts agree that the process starts with a deep commitment.  And with that commitment come resources of money,  time and effort to research markets,  learn about new cultures and create a strategic business plan that specifically addresses the new realities.

The greater the cultural differences between the two target markets the greater the need for adaptation.

The buyer,  not knowing that an assignment of proceeds has been issued,  may be thrilled at the prospect of not having to pay their bank an examination fee under the LC and embrace the open account proposal.

A world of opportunity awaits outside the U.S.  borders.  Despite calls for protectionism by a number of business and government leaders,  trade agreements and the reconfiguration of nations are creating a global marketplace that offers new horizons for enterprises willing to venture out.

To make purchases of mass marketed consumer products more affordable in lesser developed country,  makers of products such as razor blades,  cigarettes,  chewing gum,  ball point pens and candy bars have been known to have repackaged them in small single units rather than multiple units prevalent in the developed and more advanced economies.

Foreign government product regulations now common in international trade are expected to expand in the future.

These are some brief notes on International Trade Management - 2

Dr.  S.  Maurer,  
MBA Professor

Hot dusty climates of countries in the Middlë East and other emerging markets may force the automakers to adapt the automobiles with different types of filters and clutch systems than those used in North America,  Japan and Europe countries.

Scope of Product Adaptation Product adaptation deals with a whole range of issues,  ranging from quality and appearance of products,  to materials,  processing,  production equipment,  packaging,  style and modeling.

If you have found that direct mail has paid off for you at home,  chances are good that it will also help you reach buyers in foreign markets.

Don't ignore the human resources factor in the export equation,  say Terence Barber,  founder of BHP Associates,  a global economic development and management consulting firm in Sacramento,  California.  Concentrate on developing a multicultural workforce.  Opportunities may arise from informal interpersonal contacts.

Language,  legal and cultural differences may require you to consider the need for product changes.  Such changes may include product design,  branding,  labeling,  packaging and service arrangements.

The applicant is always the party that contacts the issuing bank to request the amendment.  Typically the issuing bank grants the request of their customer and issues the amendment.  So far it’s a pretty typical transaction.

The packaging design should be based on the customer needs.  In industrial products the pack should be considered for its usage and for its amenability to storing,  pouring,  re-use,  etc.

Perhaps you think you've tapped out your market in the U.S.  and believe exporting could breathe some life back into your product.  Before you start pouring in time and other resources,  step back and candidly assess your potential for success.  This assessment should include a look at manufacturer trends,  your firm's domestic position in the manufacturer,  the effect exporting will have on your present operations,  the status of your resources and the anticipated demand for your commodity.

For doing business overseas,  you will want to choose one that offers short-term and medium-term export financing,  foreign credit,  commercial letters of credit,  collection or discount export drafts,  and purchase and sale of foreign exchange.

In Intech,  Inc.  v.  Consolidated Freightways,  Inc.,  836 F.2d 672 [1st Cir.  1987],  the carrier had transported a machine and its accessories in two containers from California to Acton,  Massachusetts.  Upon arrival of the first container at the consignee’s facility,  there was a dispute as to who was responsible to unload the machine.  The container sat there for some six months before C.F.  finally came back and removed it.  Damage was discovered five months later,  when the consignee went to inspect the machine at C.F.’s yard.

Doing business in foreign markets can be very different from doing business here at home,  so don't be afraid to ask for help.

Establishing local customer preferences and evaluating competitive products and enterprises in the target market is elemental.

A product’s size and packaging may have to be modified to facilitate shipment or to conform to possible differences in engineering or design standards in a country or regional markets.

Those who do decide to venture abroad must realize that exporting success is not achieved overnight.  The requirements are the same as when you first started your business in this country.  That is,  you must be willing,  even enthusiastic,  about making a long-term commitment,  agree many experienced exporters.

The way you market your product in the United States can provide helpful clues for developing methods of selling it internationally.

These are some brief notes on International Trade Management - 3

Dr.  S.  Maurer,  
MBA Professor

Many of the same organizations that sponsor trade shows and fairs - such as thë SBA,  manufacturer groups and government agencies - also sponsor trade missions to target countries that enable you to hear from local officials and meet prospective buyers.

In the final analysis the extent of adaptation will be driven by the corporate culture,  customer and market orientation,  the market potential for the product scheduled to be exported and the importance of international marketing for corporate growth and survival.

Today,  the miracle of the marketplace - fax machines,  modems,  international 800 telephone numbers and credit cards - has brought a new accessibility.  The new technology enables small and medium-size organizations to move to areas where they can prosper as surely as people in the 1800s were able to move to new territories using barbed wire,  windmills and other technology of their times.

Perhaps you think you've tapped out your market in the U.S.  and believe exporting could breathe some life back into your product.  Before you start pouring in time and other resources,  step back and candidly assess your potential for success.  This assessment should include a look at manufacturer trends,  your firm's domestic position in the manufacturer,  the effect exporting will have on your present operations,  the status of your resources and the anticipated demand for your commodity.

Documentation is important not only for the amount of additives,  but also the source of the product; secondary or indirect additives are also regulated in most countries.

If all goes according to plan,  the beneficiary arranges shipment,  obtains the documents necessary to draw against the LC,  presents these documents to the bank,  and the bank makes payment to both the beneficiary and to the holder of the assignment of proceeds.  Again,  this may sound like the perfect solution for the buyer,  broker/middleman and supplier,  but could something go wrong with this approach? Unfortunately,  yes.

Domestic,  regional and multinational corporations are scanning the globe to source and market their products,  which is forcing the exporter to critically evaluate the kind and level of adaptation needed for various country markets.

Certain high-technology products are inappropriate in some countries not only because of their cost but also because of their function.  For example,  a computerized industrial washing machine might replace workers in a country where employment is a high priority.  In addition,  these products may need a level of servicing that is unavailable in some countries.

The case of Indemnity Insurance Co.  of North America v.  Hanjin Shipping,  348 F.3d 628 [7th Cir.  2003] involved a shipment of tools from Shenzhen,  China,  to a Lowe’s facility in North Vernon,  Indiana,  moving under a through multimodal ocean bill of lading.

Levels of expectation for product warranties vary from country to country depending on its level of development,  competitive practices,  and the activism of consumer groups,  local standards of production quality,  and differing usage frequency and patterns.

In order to speed up the amendment process,  the issuing bank may be tempted to add a clause to their amendment indicating that the beneficiary has a certain timeframe to either accept or reject the amendment.

American enterprises are more sophisticated and much more capable in many dimensions,  including marketing techniques,  technology,  experience and access to a lot of high quality products.

As tariff barriers [tariffs,  duties and quotas] are eliminated around the world in accordance with the requirements of participation in the World trade Organization [WTO],  other non-tariff barriers,  such as product standards,  are proliferating.

A world of opportunity awaits outside the U.S.  borders.  Despite calls for protectionism by a number of business and government leaders,  trade agreements and the reconfiguration of nations are creating a global marketplace that offers new horizons for enterprises willing to venture out.

The bank will require the original letter of credit be presented along with the written request for the assignment.  The bank needs the original LC so it can endorse the backside of the LC indicating that an assignment has been made to the named party and the value of the assignment.

These are some brief notes on International Trade Management - 4

Dr.  S.  Maurer,  
MBA Professor

The beneficiary knows that thëir supplier wants some type of assurance that they will be paid,  but the beneficiary wants to maintain a maximum amount of control over the transaction.  An Assignment of Proceeds might just be the answer.

Product adaptations may even include changes in one or more combinations of brand name,  color,  size,  taste,  design,  style,  features,  materials,  warranties,  after sale service,  technological sophistication and performance.

Local product market scanning,  competitive product sampling and evaluation are also needed to determine the appropriate level of warranties in country markets where the products are being exported.

The question of how you will sell,  deliver and service your product abroad is far more important than you may realize.  In answering this question,  the first decision you will want to address is method of distribution.

A product may have to be adapted in a number of ways to meet the physical,  social or mandatory requirements of a new market.  it may have to be modified to conform to government regulations or to operate effectively in country specific geographic and climatic conditions.  it may be redesigned or repackaged to meet the diverse buyer preferences,  or standard of living conditions.

We believes that even though there's an obvious benefit to designing products to meet a variety of standards,  the idea of a fully standardized global product that is identical all over the world is a near myth.

The buyer,  not knowing that an assignment of proceeds has been issued,  may be thrilled at the prospect of not having to pay their bank an examination fee under the LC and embrace the open account proposal.

To successfully establish your niche,  you should target a few selected countries.  You will want to investigate national wealth and any cost barriers,  such as tariffs and import regulations,  as well as taxation laws and restrictions on foreign investments.

When analyzing the need for adaptation or determining the extent to which adaptation may be necessary,  a close look at cultural differences between the target customers in home [country of origin] and those in the host country is extremely important.

Though there are multiple complexities in export marketing,  you most concentrate on issues and challenges relating to the need for product adaptation for export markets.

To make purchases of mass marketed consumer products more affordable in lesser developed country,  makers of products such as razor blades,  cigarettes,  chewing gum,  ball point pens and candy bars have been known to have repackaged them in small single units rather than multiple units prevalent in the developed and more advanced economies.

Once the letter of credit is received,  the beneficiary would approach their bank with the original letter of credit in hand and ask that a specific value of the original letter of credit be assigned to the supplier.  For example,  if the LC was issued for $45,000,  the request for the assignment might be $30,000?

A product’s size and packaging may have to be modified to facilitate shipment or to conform to possible differences in engineering or design standards in a country or regional markets.

The greater the cultural differences between the two target markets the greater the need for adaptation.

Some exporters believe the domestic product can be exported without significant changes.  Others seek to consciously develop uniform products [global product design strategy] that are acceptable in all markets with little or mo modification.