Entering Foreign Market and Exporting Importing

¶ … Foreign Market & Exporting, Importing Q1.Strategies of International Business It is difficult to conceive of a business today which can ignore the availability of e-commerce as a method of connecting with consumers on an international basis. Through a website, a business can easily advertise and make available a wide range of products specifically tailored to a specific country's needs, far beyond what could be available in a brick-and-mortar store recently opened abroad.

The full range of products can be made available to the customer, simply by virtue of opening a website, and there is no need to have the expenses of staff and a storefront. "E-Commerce presents opportunities for all consumers and small businesses to obtain easy access to the world market via the Internet. In the past, the world market was readily accessible only to large global companies located mainly in developed countries.

E-Commerce is a new and powerful medium which can help close the digital divide among countries and achieve global eQuality in the new world economy" (Towards eQuality, 2013, Ministry of Economy, Trade and Industry). Q2.Entering Foreign Markets There are certain advantages to foreign licensing, namely the fact that the foreign corporation has more knowledge of the government regulations and consumer buying habits of the foreign country.

The license also ensures that the company will have a sustained and immediate source of revenue while it attempts to gain a foothold in the foreign country.

The company may have no interest in expending the revenue to engage in the actual manufacturing of products in the company but "could benefit from licensing out of such IP [Intellectual Property] assets by relying on the better manufacturing capacity, wider distribution outlets, greater local knowledge and management expertise of another company," willing to take on the manufacturing burden (Licensing of intellectual property assets: Advantages and disadvantages, n.d,. WIPO).

However, there is always the fear that the company which acquires the license will be able to use the knowledge it has gained about the production process to enrich itself by deploying it when it manufactures its other goods and services. There is also concern that the brand's reputation will be damaged through guilt-by-association, if the licensing company engages in slovenly or unethical conduct. Q3.

Exporting, Importing, and Countertrade Countertrades are "transactions that link, legally or otherwise, exports and imports of goods or services in addition to, or in place of, financial settlements" (Nakra 2005). It is a sophisticated form of barter: "An aircraft manufacturer might accept responsibility for finding markets for a variety of consumer goods produced in a host country in return for the sale of its aircraft.

In order to sell its products in a particular country, a steel manufacturer might be required to take back products ranging from palm oil to coffee to timber" (Nakra 2005). Countertrades can enable companies to gain access to formerly closed markets and allow a company to make an advantageous deal that costs it minimal revenue. "Countertrade is a resourceful way to arrange for the sale of a product from an exporter to a company in a country that does not have the resources to pay for it in hard currency" (Nakra 2005).

However, the disadvantages of countertrades are similar to those of the old-fashioned medium of barter. The products in the exchange may be of variable quality, and the company may have little understanding of how to value them or unload them on the international marketplace. Q4. Global Production, Outsourcing, and Logistics A make-or-buy decision is the decision a company must make between outsourcing a component of its product or making the product in-house.

The advantages of making something in-house is that the company is not subjected to the potential problems of shortages or unstable political situations (if making the product abroad) and variable quality (which can be problematic no matter where the product is manufactured). However, outsourcing can result in considerable cost savings for the company, and enable it to focus its resources upon.