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12 Cards in this Set
- Front
- Back
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Export Failures due to |
1. Lack of knowledge of opportunities 2. Commitment of resources 3. Contextual Reasons 4. Operational commitments |
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Reasons failures occur related to knowledge of export opportunities |
- insufficient market analysis - insufficient understanding of competitive conditions - insufficient customization of products - Ineffective distribution program - poor promotion - lack of export financing (insurance) |
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Reasons failures occur due to contextual reasons |
Difference in: - culture - language - time difference Lots of distance between |
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What is a LOC? |
- a financing method in which the importers bank issues a document stating the bank will pay the exporter when the exporter fulfills the terms of the document - typically used when an importers credit is questionable, when exporter needs to obtain financing, and when market regulations require it |
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Types of LOC |
- irrevocable LOC - revocable LOC - confirmed LOC |
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Role of bank in export transaction |
- Exporters bank is advising bank and informs the exporter of the LOC and delivers documents to importers bank - Importers bank is issuing bank and sends payments to exporters bank |
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4 steps to develop export strategy |
Step 1 - Identify potential market Step 2 - Match needs to abilities Step 3 - Initiate meetings Step 4 - Commit resources |
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What is a draft and what are the two types of drafts? |
A draft or bill of exchange is a document that orders an importer to pay an exporter a specific sum of money at a specific time. - Sight draft - requires the importer to pay when the goods are delivered - Time draft - extends period of time (30, 60, 90, 180) following delivery which the importer must pay for the goods |
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Bill of lading? |
contract between an exporter and shipper that specifies merchandise destination and shipping costs. - proof that the exporter has shipped the merchandise - serves as a receipt, contract, and document of title |
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Export financing |
Open account Advanced Payment Documentary Collection |
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Open Account |
- exporter bills the importer after the merchandise ships - high risk for exporter because importer may not pay - used when parties are familiar with one another or between subsidaires |
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Documentary Collection |
- banks act as intermediar |
