International Business

Prepared By Manu Melwin Joy

Assistant ProfessorIlahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

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Introduction

• Exporting is defined as the sale of products and services in foreign countries that are sourced or made in the home country.

Introduction

• Exporting is an effective entry strategy for companies that are just beginning to enter a new foreign market. It’s a low-cost, low-risk option compared to the other strategies. These same reasons make exporting a good strategy for small and midsize companies that can’t or won’t make significant financial investment in the international market.

Why Do Companies Export?

• Companies export because it’s the easiest way to participate in global trade, it’s a less costly investment than the other entry strategies, and it’s much easier to simply stop exporting than it is to extricate oneself from the other entry modes.

Benefits of Exporting

• Market -The company has access to a new market, which has brought added revenues.

• Money - Not only will company earned more revenue, but it has also gain access to foreign currency, which benefits companies located in certain regions of the world.

Benefits of Exporting

• Manufacturing - The cost to manufacture a given unit decreased because company can manufacture products at higher volumes and buy source materials in higher volumes, thus benefitting from volume discounts.

Specialized Entry Modes: Contractual

• Two main contractual entry modes– Licensing – Franchising.

Specialized Entry Modes: Investment • Beyond contractual

relationships, firms can also enter a foreign market through one of two investment strategies: – Joint venture– Wholly owned subsidiary.

Various forms of documentation • The bill of lading is the

contract between the exporter and the carrier (e.g., UPS or FedEx), authorizing the carrier to transport the goods to the buyer’s destination. The bill of lading acts as proof that the shipment was made and that the goods have been received.

Various forms of documentation • A commercial or customs

invoice is the bill for the goods shipped from the exporter to the importer or buyer. Exporters send invoices to receive payment, and governments use these invoices to determine the value of the goods for customs-valuation purposes.

Various forms of documentation • The letter of credit is a

legal document issued by a bank at the importer’s (or buyer’s) request. The importer promises to pay a specified amount of money when the bank receives documents about the shipment.

Export Procedure

1. Registration.2. Processing of Shipping Bill.3. Quota Allocation and Other certification for Export Goods.4. Arrival of Goods at Docks.5. System Appraisal of Shipping Bills.6. Status of Shipping Bill.7. Customs Examination of Export Cargo.8. Variation Between the Declaration & Physical Examination.9. Stuffing / Loading of Goods in Containers.10. Drawal of Samples.11. Generation of Shipping Bills.12. Export General Manifest.