Study guide Chapter 13 Export and Import Strategies

1) What term refers to the sale of goods or services produced by a company based in one country to customers that reside in a different country?

2) What term refers to the purchase of goods or services produced by a company based in one country from sellers that reside in a different country?

3) Give another example of a service import. Examples include a consulting company performing services for a foreign client. an investment bank helping a foreign company arrange financing, and engineering contractors building roads in a foreign country.

4) This spring break you are planning to leave the U.S. and go to London, England and stay at a hotel there. You will be making a ________ and the London hotel will be performing a ________.

5) The benefits of retaining a core competency within a company and threading that core competency through the value chain are referred to as ________ advantages.

6) Companies are likely to export products abroad in situations such as the following: when their average cost per unit of home country production declines substantially by increasing output, when they aim to increase degree of market diversification, and when they are new to international business. Name another.

7) These factors companies to look to exports to boost total sales: maturity of the domestic market, potential to leverage their core competency in foreign markets, and response to the market entry of a foreign rival. Name another.

8) In general, companies that have low levels of ownership advantages ________.

9) The probability of being an exporter ________.

10) The ________ of a firm is the share of its total output that is exported.

11) Do small and medium-sized enterprises (SMEs) make up the majority of U.S. exporters?

12) According to the research described in your text, what factors would increase a firm's probability of exporting? 13) What are the phases in the process of incremental export development?

14) Increasingly, we see newly formed companies begin exporting sooner in their life cycle, led by a new generation of entrepreneurs and managers with a keen awareness of export opportunities. These sorts of firms are generally referred to as ________.

15) An Australian company makes athletic wear for women, men, and adults. After several years of successfully exporting its products to the U.K. and the U.S., the company began exporting to

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several members of the EU. This is an example of ________.

16) The perspective of ________ holds that as a company gains experience, resources, and confidence, it progressively increases its exports.

17) What is a major pitfall of exporting?

18) What mistakes do companies new to exporting frequently make?

19) Advances in information technology have led to ____________________. 20) What is commonly cited as a reason that firms do not seek export opportunities more aggressively?

21) The basis for designing an effective strategy for exporting begins with ________.

22) In designing an export strategy, managers typically do __________________.

23) The manager of a small or medium-sized enterprise (SME) in the United States looking to begin exporting would most likely consult with whom to obtain expert counseling on exporting?

24) The incremental internationalization view of exporting holds that companies first target countries that are ________ their home market.

25) An import strategy may be driven by the fact that companies ________.

26) Many of the strategic and practical issues of the import process ________ those of the export process.

27) The three main types of importers include ____________________.

28) A driving factor for the growth in imports is the impact of ________.

29) A broker or other import consultant can help an importer minimize import duties by ________.

30) The primary duties of the ________ are the assessment and collection of all duties, taxes, and fees on imported merchandise, the enforcement of customs and related laws, and the administration of certain navigation laws and treaties.

31) The primary duties of the Bureau of Customs and Border Protection include assessing all duties, taxes, and fees on imported merchandise, protecting the U.S. from threatening imports, policing smuggling operations and what else?

32) Import documents are of two different types: those that determine whether customs will release the shipment and those that contain information for ________.

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33) In ________, the exporter sells goods directly to or through an independent domestic intermediary in the exporter's home country that exports the products to foreign markets.

34) The three common ways that brokers are paid by a company conducting indirect exporting are:

35) As companies initiate their activities in export markets with a preference for an indirect selling strategy, they tend to ________.

36) The company that hires an intermediary in the belief that indirect selling has the most appeal in helping it manage the export process must accept ________.

37) A(n) ________ operates on a contractual basis and provides exclusive representation for an exporter's goods and services in a foreign market.

38) What is typically true of an export management company?

39) What is a difference between export management companies (EMCs) and export trading companies (ETCs)?

40) What is true of export trading companies in the United States?

41) Exporters who opt for direct selling in foreign markets most commonly do so ________.

42) An exporter that opts for a(n) ________ strategy will develop its own international marketing capability.

43) The Internet supports more companies' efforts to launch a direct selling strategy by ________.

44) What is the formal export document from the exporter to the importer that outlines the selling terms, price, and delivery if the goods are actually shipped?

45) Federal, state, and local governments, seeing the benefits of international trade, actively aid the efforts of potential and active exporters as well as ________.

46) An American company looking to get into exporting could look to government agencies for assistance in ___________.

47) A freight forwarder, the so-called "travel agent of cargo," performs what functions?

48) Trends such as more frequent shipments, lighter-weight shipments, and higher-value shipments ________.

49) Countertrade is an alternative means of structuring an international sale when ________.

50) ________ refers to any one of several different arrangements that parties negotiate so that

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they can trade goods and services with limited or no use of currency.

51) Countertrade is an inefficient way of doing business because it ________.

52) Countertrade generally increases in countries whose economies ________.

53) A situation in which goods are traded for goods due to a shortage of foreign exchange is known as ________.

54) A situation in which an exporter sells goods for cash but then undertakes to promote exports from the importing country in order to help it earn foreign exchange is known as ________.

55) A situation in which an exporter sells products to a foreign country along with its promise to make a future purchase of a specific product made in that country is known as ________.

56) Which of the following is an example of barter?A) A beverage maker in England provides production equipment to a state-owned bottling plant in Russia while agreeing to take payment in the form of future output generated by the Russian plant.B) Indonesia supplies Thailand with agricultural supplies in exchange for rice grown in Thailand.C) The U.S. exports goods to China and then invests in a Chinese business that is unrelated to those goods.D) An aircraft exporter partners with a company in the importing country to manufacture components that will then to be used in the assembly of the aircraft.T/F57) Importing is the converse of exporting.

58) A company classified as a small and medium-sized enterprise (SME) has fewer than 500 employees.

59) Ownership advantages refer to a firm's specific assets, international experience, and the ability to develop either low-cost or highly differentiated products within the context of its particular value chain.

60) Serendipity is often an export trigger for companies that purposefully look to internationalize their operations.

61) Export intensity, the percentage of total revenues coming from exports, is not always correlated with company size.

62) The probability of a company being an exporter is independent of the size of the company.

63) "Born global" firms are those that step straight onto the world stage, making exporting the primary goal of the firm from day one of operations.

64) The stages of development in a company's export expansion are tied to company size.

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65) A major pitfall of exporting is misclassifying products in terms of the destination country's tariff schedule, thereby incurring a higher tax or slower delivery.

66) Companies new to exporting most frequently suffer over-commitment by top management in taking on the initial difficulties and financial requirements of exporting.

67) Companies that are born global can skip the step of designing an export strategy.

68) Entrepreneurs exporting for the first time are more likely to underestimate than overestimate demand for their product.

69) One advantage of importing is that an importer can diversify its operating risks by developing alternative suppliers.

70) There are three broad types of importers: those that use foreign sourcing as part of their global production network, those that look at foreign sourcing to get the highest quality products at the lowest possible price, and those that look defensively for any product around the world that they can import in order to compete with rivals.

71) The primary duty of the customs agency of a government is the assessment and collection of all duties, taxes, and fees on imported merchandise.

72) The U.S. government has more than 10,000 tariff classifications and more than half of them are subject to interpretation.

73) Indirect exports are goods and services sold to an independent intermediary outside of the exporter's home country, which then sells the product in the export market to the final consumer.

74) Exporters employ an export management company as part of an indirect selling strategy.

75) Major types of indirect intermediaries include export trading companies, distributors, and freight forwarding companies.

76) An export trading company (ETC) works with many manufacturers rather than representing a single manufacturer.

77) In what is known as direct selling, the exporter sells goods directly to or through an independent domestic intermediary in the exporter's home country that then exports the products to foreign markets.

78) Direct exports are sold to an independent intermediary in the domestic market, which then sells the products in the export market to the final consumer.

79) A U.S. government agency that provides assistance to companies interested in exporting is the International Trade Administration.

80) The foreign freight forwarder is the largest export intermediary in terms of value and weight

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of products managed.

81) Countertrade refers to any one of several different arrangements that parties negotiate so that they can trade goods and services with limited or no use of currency.

82) Countertrade is an efficient way of doing business.

83) Barter is a transaction in which goods or services are traded for goods or services of equal value without any exchange of cash or credit.

84) Transactions in which an exporter sells products for cash and then helps the importer find opportunities to earn hard currency for payment are known as buyback.

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