Exporting Case
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Exporting
Exporting is considered to be the most used method to buy and sell goods in the international markets. This is also used when the international markets have better offers for increased sales that become profitable for the company.
Advantages – Ability to expand on company sales, ability to make sales in other countries when its slow in your own country, smaller businesses use exporting of their goods to learn how to do business internationally
Disadvantages – smaller companies could strain their resources if theyre not careful and this may not be cost effective for them as well.
Motive – To move into newer markets
Countertrade
This is when you sell goods or services and accept goods or services from the buyer as payment of your goods or services sold to them. There are several different types of Counter trade such as Barter, Counter purchase, Offset, Switch trading, and Buy back.
Advantages – By counter trading you can sometimes gain access to a market that you normally couldnt get into because of funds.
Disadvantages – Price changes from the time of the purchase to the turnaround of the resale.
Motive – Strategically to get into a country you normally couldnt under normal circumstances.
Switch trading
This is when one company agrees to purchase a product that they dont need or use just to get into that countries market. This company the turns around and sells the purchase obligation to a trading organization that makes the purchase of the product because they have demand for this product.
Advantages – The ability to penetrate a market that is considered to be out of touch for them.
Disadvantages – Rapid price changes
Motive – Strategic
Counter purchase
The ability to sell your product to a country today with the understanding that you are obligated to purchase a specific product from that country in the future
Advantages – Provides ability to earn back monetary funds for the original purchase and relationship building for future business transactions.
Disadvantages – There may be an extended waiting period for the future purchase transactions
Motive – Strategic
Licensing
The licensing of a product allows another company to use your product to finish their product.
Advantages- Can be used to finance their expansion into the international markets with less risk. Also lessons the chances of the product ending up on the black market.
Disadvantages