CHAPTER 6 Importing Exporting and Trade Relations 6

CHAPTER 6 Importing, Exporting, and Trade Relations 6 -1 Importing Procedures 6 -2 Exporting Procedures 6 -3 Importance of Trade Relations 6 -4 The Nature of Competition © 2011 South-Western | Cengage Learning

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 LESSON 6 -1 Importing Procedures GOALS l Explain the importance of importing. l Identify the four steps for importing. © 2011 South-Western | Cengage Learning 2

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Importance of Importing l Product demand l Lower costs l Production inputs © 2011 South-Western | Cengage Learning 3

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Importing Activities STEP 1: Determine demand STEP 2: Contact suppliers STEP 3: Finalize purchase STEP 4: Receive goods © 2011 South-Western | Cengage Learning 4

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Import Assistance l Customs and Border Protection (CBP) l Food and Drug Administration (FDA) l U. S. Department of Agriculture (USDA) © 2011 South-Western | Cengage Learning 5

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 LESSON 6 -2 Exporting Procedures GOALS l Identify the steps of the exporting process. l Describe the exporting of services. © 2011 South-Western | Cengage Learning 6

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 The Exporting Process STEP 1: Find potential customers STEP 2: Meet the needs of customers STEP 3: Agree on sales terms STEP 4: Deliver products or services STEP 5: Complete the transaction © 2011 South-Western | Cengage Learning 7

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Sales Terms l Free on board (FOB) l Cost, insurance, and freight (CIF) l Cost and freight (C&F) © 2011 South-Western | Cengage Learning 8

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Export Documents l Bill of lading l Certificate of origin © 2011 South-Western | Cengage Learning 9

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Obstacles to Exporting l No company representatives in foreign countries l Products not appropriate foreign consumers l Insufficient production facilities to manufacture enough goods for exporting l High costs of doing business in other countries l Difficulty understanding foreign business procedures l Difficulty obtaining payment from foreign customers © 2011 South-Western | Cengage Learning 10

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Commonly Exported Services l Hospitality l Hotels, food service l Entertainment l Movies, music, television production, amusement parks l Financial services l Insurance, real estate © 2011 South-Western | Cengage Learning 11

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 LESSON 6 -3 Importance of Trade Relations GOALS l Identify the economic effects of foreign trade. l Describe the types of trade agreements between countries. © 2011 South-Western | Cengage Learning 12

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 The Economic Effect of Foreign Trade l Balance of trade l Trade deficit l Trade surplus l Balance of payments l Positive, or favorable l Negative, or unfavorable © 2011 South-Western | Cengage Learning 13

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Trade Agreements l Promote economic development l Encourage international business activities © 2011 South-Western | Cengage Learning 14

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 The World Trade Organization l Deals with rules of trade between nations l Helps producers of goods and services, exporters, and importers conduct their business l Encourages international trade © 2011 South-Western | Cengage Learning 15

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Regional Cooperation l Economic community l Common market © 2011 South-Western | Cengage Learning 16

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Barter Agreements l Direct barter l Countertrade © 2011 South-Western | Cengage Learning 17

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Free-Trade Zones l An area designated by a government for duty-free entry of nonprohibited goods l Commonly located at a point of entry into a nation © 2011 South-Western | Cengage Learning 18

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 LESSON 6 -4 The Nature of Competition GOALS l List factors that affect international business competition. l Explain the types of competitive market situations. © 2011 South-Western | Cengage Learning 19

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 International Business Competition l Factors affecting competition l Number of companies l Business costs l Product differences l Benefits and concerns of competition © 2011 South-Western | Cengage Learning 20

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Types of Competitive Situations l Pure competition l Monopolistic competition l Oligopoly l Monopoly © 2011 South-Western | Cengage Learning 21

CHAPTER INTERNATIONAL BUSINESS, 4 e 6 Competitive Market Situations Pure Competition ● Many sellers ● Same product Monopolistic Competition ● Many sellers ● Slightly different product Oligopoly ● Few sellers ● Slightly different product Monopoly ● One seller ● Usually government regulated © 2011 South-Western | Cengage Learning 22