Keywords: MBA of International Trade Management free school of business business plans examples

MBA of International Trade Management

These are some brief notes on International Trade Management - 1

Dr.  S.  Maurer,  
MBA Professor

You should also research existing trëaties and any currently under development,  such as GATT and the North American free trade Agreement [NAFTA].  [These trade agreements are still evolving,  so be sure to monitor them closely.]

After determining that your product is highly exportable,  you need to identify your potential customers.  The best way to do this is through market research.

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.

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].

The court also reversed the lower court’s finding that O’Hare Services and Channel Distribution were not liable,  and remanded the matter back for further proceedings to determine if they could be liable under Illinois law as bailees,  since there was evidence of very lax security precautions.

Most owners of small businesses venturing overseas often don't have the extra capital they need and must turn to outside financing sources.  In recognition of the importance of exporting building at all governmental levels,  new sources of funding are springing up.

Whilst exporting requires no direct manufacturing in a foreign country,  successful exporting warrants a need for significant investments in marketing related initiatives.  Done right it can be an expensive but lucrative proposition.

Industry trade associations are also useful,  as are private consulting firms [such as Terence Barber's BHP Associates] and the business departments located within major universities.

Similar to domestic expansion,  moving into international markets requires capital.  You need funds for inventory,  receivables and promotion activities.  In addition,  if you intend to open foreign branch offices,  you'll need cash for facilities and related operating expenses.

Keep in mind most letters of credit are irrevocable,  meaning that no change can be made to the LC without the agreement of all parties.

Firms that market their products and services internationally expect higher growth rates than those which concentrate exclusively on domestic markets,  reports financial consulting firm Coopers & Lybrand.

Engineering changes needed: Electrical Requirements—cycles and voltages.

Let’s assume that we have a buyer,  a broker/middleman,  and a supplier/manufacturer.  At the request of the broker,  a buyer applies for a letter of credit,  but this time there is no mention of the letter of credit needing to be transferable?

The supplier tries to contact the broker/middleman,  only to find out that the phone has been disconnected and they appear to have left town.  The supplier’s prospect for payment at this point isn’t very good.  For this very reason,  suppliers or manufacturers may shy away from this arrangement.  It’s never a perfect world!

* Similarities in business culture,  practices and the law.  * Language and other possible communication barriers.  * Spending habits.  * National traditions.  * Religious beliefs.  * The stability of the market's economic and political environment.  * Direct and indirect barriers to initial market entry.  * Product standards in the quality,  safety and technical areas.  * Current market size and growth potential.  * Existing domestic and foreign competition.

These are some brief notes on International Trade Management - 2

Dr.  S.  Maurer,  
MBA Professor

Outline the country or countries in which you plan to do businëss; identify your export objectives,  both immediate and long-term; define the specific tactics you will use to achieve these objectives,  such as a marketing and promotional plan and strategies; specify your distribution system and pricing; establish implementation and milestone schedules that reflect your objectives and tactics; and detail your allocation of resources.

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

To be successful in marketing products in international markets,  most products require some level of adaptation or localization.

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.

Quality packaging for shipment is vital,  even in this day of containerization and air-freight systems.  Poor quality packaging can mean poor quality product,  costly delivery and storage,  and failure to meet legal requirements.

Transportation is not completed until a shipment has both arrived at its destination and has been delivered.  Danciger v.  Cooley,  248 U.S.  319,  327 [1919].

A common carrier can affect delivery by merely depositing the merchandise at the consignee's place of business without acceptance or rejection by the consignee.

Engineering changes needed: Knowledge of legal and operating requirements will help the exporter to determine whether that ‘special’ that is selling well in the home country needs to be substituted or should an arrangement be made to offer a different drive ratio to achieve the desired operating revolutions per minute.

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.

What flies off the shelves in Chicago may not necessarily be a great seller in Munich.  Cultural differences and varying product standards can present serious barriers if you aren't willing to adapt your commodity to your new target market.

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.

Market-driven thinking is sweeping the globe.  People don't talk of countries anymore, notes Dr.  N.E.  Okeke,  former president of the Nigerian Chamber of Commerce and manufacturer.  They talk of markets.

After determining that your product is highly exportable,  you need to identify your potential customers.  The best way to do this is through market research.

Once a letter of credit [LC] is issued and the beneficiary has had a chance to review the document,  the need for an amendment may become apparent.  Or perhaps the applicant realizes they made an error when they completed the application after the letter of credit has already been issued.  Whatever the circumstances may be,  it isn’t unusual for someone involved in a transaction to need to amend an existing letter of credit.

The international market average rate for the 90s has been two percent,  topping 2.3 percent under the best of circumstances

These numbers don't mean that the U.S.  isn't growing,  but rather that other countries are growing so much faster.

These are some brief notes on International Trade Management - 3

Dr.  S.  Maurer,  
MBA Professor

The court also reversëd the lower court’s finding that O’Hare Services and Channel Distribution were not liable,  and remanded the matter back for further proceedings to determine if they could be liable under Illinois law as bailees,  since there was evidence of very lax security precautions.

The mere arrival of goods at their destination does not reduce the liability of the carrier where anything remains to be done by the carrier to effectuate delivery.  Seaboard Allied Milling Corp.  v.  Consolidated Rail Corp.,  unreported,  [D.  Colo.  1980]; Keystone Motor Freight Lines v.  Brannon-Signaigo Cigar Co.,  115 F.2d 736 [5th Cir.  1940].

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.

Your bank can also be an excellent resource if you choose one that has an international department and is committed to serving small business.  Such an institution can help you with all aspects of an export transaction and introduce you to the federal and state government export financing programs that actively support small firms.  State governments are another prime source of assistance.

Engineering changes needed: Knowledge of legal and operating requirements will help the exporter to determine whether that ‘special’ that is selling well in the home country needs to be substituted or should an arrangement be made to offer a different drive ratio to achieve the desired operating revolutions per minute.

A country's standard of living and the target market’s purchasing power can also determine whether a enterprise needs to modify a 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.

Invent new products to satisfy both your domestic and foreign markets.  If management is uncertain that the profit potential in foreign markets is large enough to recover costs for product adaptations or it is driven by a risk-averse culture,  it is likely to limit its export activity to products that require only minimal changes to existing domestic products by exporting the products to only those countries that are politically,  physically and culturally similar to their own.

We have the supplier sitting back patiently waiting for payment.  After two or three weeks,  they may contact the bank asking about the status of payment against the assignment only to hear that documents have yet to be presented against the letter of credit.  The supplier will be referred to the line in the assignment of proceeds that payment will be made to them if and when payment under the letter of credit is made.

According to NFIB statistics,  almost every international market is growing faster than the U.S.  For example,  Latin America is experiencing annual growth of five percent; the Middle East,  nearly that.  The Four Tigers - Hong Kong,  Singapore,  South Korea and Taiwan - and their neighbors Thailand,  Malaysia and Indonesia,  are averaging six percent growth annually - and that's when they're having an unremarkable year.

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.

Market-driven thinking is sweeping the globe.  People don't talk of countries anymore, notes Dr.  N.E.  Okeke,  former president of the Nigerian Chamber of Commerce and manufacturer.  They talk of markets.

For consumer products the pack might have various functions: protective,  informative,  merchandising and conforming to legal requirements and buying habits [e.g.  Americans tend to buy less frequently than Europeans,  so the largest size is more popular in the United States].

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.

Engineering changes needed: Electrical Requirements—cycles and voltages.

These are some brief notes on International Trade Management - 4

Dr.  S.  Maurer,  
MBA Professor

Transportation is not completed until a shipment has both arrivëd at its destination and has been delivered.  Danciger v.  Cooley,  248 U.S.  319,  327 [1919].

* Similarities in business culture,  practices and the law.  * Language and other possible communication barriers.  * Spending habits.  * National traditions.  * Religious beliefs.  * The stability of the market's economic and political environment.  * Direct and indirect barriers to initial market entry.  * Product standards in the quality,  safety and technical areas.  * Current market size and growth potential.  * Existing domestic and foreign competition.

A thorough corporate self analysis or self audit is needed to understand to what extent the exporter is willing to gather information and invest in adaptation of the product for customers in a specific country market or region of the world.

In Seaboard,  a carrier temporarily left a railroad car in constructive placement on some side rails to await orders for the car to be moved for actual placement to the unloading spot.  While the carrier was waiting for orders,  the car was vandalized.  The court held the carrier liable since the car had not been delivered before the damage occurred.

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.

Local customs,  such as religion or the use of leisure time,  often determine whether a product will gain market acceptance.  The sensory impact of a product,  such as taste or visual impact,  may also be a critical factor.  The Japanese consumers’ desire for beautiful packaging,  for example,  has led many U.S.  enterprises to redesign cartons and packages specifically for this market.

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.

Market-driven thinking is sweeping the globe.  People don't talk of countries anymore, notes Dr.  N.E.  Okeke,  former president of the Nigerian Chamber of Commerce and manufacturer.  They talk of markets.

Industry trade associations are also useful,  as are private consulting firms [such as Terence Barber's BHP Associates] and the business departments located within major universities.

If you choose to sell your commodity directly,  you can market your goods through direct mail,  advertising and promotions in magazines with overseas circulation as well as in local publications and other media.

Trademark protection and patent law comprise another critical area that requires your attention.  A vexing problem for many U.S.  enterprises doing business abroad,  especially in developing countries,  has been the pirating of intellectual property.  The Western idea of owning an idea is as foreign to many cultures as the idea of private property.

Carrier liability ends when delivery has been completed.  Again,  this is a question of fact that often involves a “dropped” trailer.  When it is the carrier’s duly to unload the trailer,  dropping the trailer in the consignee’s premises does not constitute delivery.

If a corporate self audit brings to light ethnocentric orientation,  the leadership at the top may be seeking to sell the same products around the world with an attitude: “If it is good enough for the U.S.  of A.  it has to be good enough for India,  China,  Malaysia,  South Korea or Japan.”

Many of the same organizations that sponsor trade shows and fairs - such as the 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.

Instruction or maintenance manual,  for example,  should be made available in centimeters,  weights in grams or kilos,  and temperatures in degrees Celsius.