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IB 3101 (20)
Lecture 11

IB 3101 Lecture 11: Week 11 – Chapter 14 – Exporting
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Department
International Business Admn
Course
IB 3101
Professor
Susan Feinberg
Semester
Spring

Description
Week 11 Chapter 14 Exporting, Importing, and Countertrade Exporting is very difficult, hardest part is to figure out how to actually start exporting Only 5.3 of US firms export! Most of the value of US exports comes from a small number of firms that export A LOT. Exporting firms: Market opportunities Foreign exchange risk Import and export financing Challenges of doing business in foreign market Pitfalls of Exporting Poor market analysis A lack of customization A poor distribution program Poorly executed promotional campaigns Problems securing financing Underestimation of the expertise required for foreign market Underestimation of the amount of paperwork Finding foreign demand for a firms products, dealing with the financing, paperwork, etc. are HUGE roadblocks to setting up export operations. Ways to Reduce the Risks of Exporting Hire an EMC (export management companies) or export consultant Firms can go the Department of Commerce for help, but if they dont have a very good idea of what needs to be done, its unlikely theyll set up export operations. Focus on one, or a few markets at first Enter a foreign market on a small scale Recognize the commitment involved and time it takes to building export sales Develop a good relationship with local distributors and customers Hire locals Consider local production Lack of Trust Exporters prefer to receive payment prior to shipping goods Importers prefer to receive goods prior to making payments Solution can be the use of a third party o International trade financing Letter of credit
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