Edward Imm International Business Final Exam

Two administrations in the US dedicated to writing export guidelines

-International Trade Administration (ITA)

-US and Foreign Commercial Service

Export Management Company (EMC)

offers services to companies that have not previously exported products

Main principles that 3M built export success on

(1) Start small with EMC

(2) Then add lines

(3) Always hire local

(4) When volume dictates, produce locally

Biggest threat in exporting and importing

Lack of trust

Letter of Credit

States the bank will pay a specified sum to a beneficiary on presentation of specified documents

Bill of Exchange

the instrument normally used in international commerce to effect payment

Draft

an order written by an exporter instructing the importer to pay a specified amount of money at a specified time

Sight Draft

Payable on presentation to the drawee

Time Draft

allows for a delay in payment - normally 30, 60, 90, or 120 days

Bill of Landing

issued to the exporter by the common carrier transporting the merchandise

Export-Import Bank (Ex-Im Bank)

a wholly owned US government corporation established in 1934 to assist in financing imports and exports

Countertrade

denotes a range of barter-like agreements

-ex. barter, counter purchase, offset, switch trading, compensation, or buy backs

Firms confront interrelated issues

(1) Where to locate production?

(2) What is the long term strategic role of foreign production?

(3) Should the firm own or outsource?

(4) How will you manage the supply chain?

Goal of Supply Chain management (SCM)

lower the costs and increase the quality

Upstream Supply Chain

set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service

downstream supply chain

Organizations and processes responsible for delivering products to customers

Total Quality Management (TQM)

a management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement

-first popular in Japan, then the US in the 80s and 90s

Six Sigma

3.4 defects per million units

ISO 9000

the set of standards Europe requires that you meet to sell

Make or Buy decisions

a decision concerning whether an item should be produced in house or purchase it from a supplier

Global distribution center

A facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers, or directly to consumers anywhere in the world; also called a global distribution warehouse

Global Inventory Management

The decision-making process regarding the raw materials, work-in-process (component parts), and finished goods inventory for a multinational corporation.

Primary packaging

Packaging designed to hold a single retail unit of a product.

Secondary packaging

contains primary packages

Transit packaging

comes into use when a number of primary and secondary packages are assembled on a pallet or unit load for transportation

reverse logistics

The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.

Just In time inventory

materials arrive at a manufacturing plant just in time to enter into the production process

global supply chain coordination

shared decision making opportunities and operational collaborations of key global supply chain activities

lean manufacturing

technology designed to improve job scheduling, reduce setup time, and improve overall quality

mass customization

the production of a variety of end products at a unit cost that could once be achieved through mass production of a standardized unit

source factory

drive down costs in the global supply chain

server factory

linked into the global supply chain for a global firm to supply specific country or regional markets around the globe

contributor factory

serves a specific country or world region

outpost factory

intended to create new processes, products, and technologies that can be used throughout the global firm and in the world

market segementation

identifying distinct groups of consumers whose needs, wants, and purchasing behaviors differ from others in important ways

intermarket segment

A segment that spans multiple countries, transcending national boarders

desriptive research

simple statistical techniques to describe a data set

predictive research

Marketing research used to help the business forecast future business developments

prescriptive research

management methodology that guides a company into how to best allocate resources

How to collect international research

(1) Define the research objective

(2) Determine the data source

(3) Assess the costs and benefits

(4) Collect data

(5) Analyze and interpret the data

(6) Report findings

Concentrated Retail System

few retailers supply the market

Fragmented Retail System

many retailers supply a market with no one having a major share

Channel length

The number of intermediaries that a product has to go through before it reaches the final consumer

Channel Exclusivity

how difficult it is for outsiders to access

Channel Quality

the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses

Source effects

occur when the receiver of the message evaluates the message on the basis of status or image of the sender

country of origin effects

the extent to which the place of manufacturing influences product evaluations

noise

number of other messages competing for the potential customer's attention

Push Strategy

emphasizes personal selling

Pull Strategy

mass media advertising

Price Discrimination

exists when sales of identical goods or services are transacted at different prices from the same provider

elastic

when a small change in price produces a large change in demand

ineslatic

when a large change in price produces a small change in demand

predatory pricing

the use of price as a competitive weapon to drive weaker competitors out of a national market

Multipoint Pricing

Occurs when a pricing strategy in one market may have an impact on a rival's pricing strategy in another market.

experience curve pricing

priced low worldwide in an attempt to build sales volume