IM final.ppt

7/29/2019 IM final.ppt

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Export and Import Strategies

Submitted to:

Prof. Sanjay Jain

Submitted by:

Group No 2

Karan Bhadra 111230

Rahul Kochar 111244

Ruturaj Thacker 111252Sunil Sancheti - 111259

Competitive Entry Strategies in Expanding

Markets


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Participation StrategiesParticipation Strategies

The choice of how to enter each

international market

Exporting, Licensing, Strategicalliances, and Foreign DirectInvestment


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H i g h

L o w

R i s k

C o n t r o l

D i r e c t

E x p o r t

I n d i r e c t

E x p o r t

L i c e n s i n g

S t r a t e g i c

A l l i a n c e s

F D I

L o w H i g h


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Export StrategyExport Strategy

Export strategy is to shipcommodities to other places orcountries for sale or exchange.

In economics, an export is any goodor commodity, transported from onecountry to another country in a

legitimate fashion, typically for use intrade.

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ExportingExporting

Advantages:

Limited investment;

Ownershipadvantages

Location advantages Internalization

advantages

Increase revenues

achieve economies ofscale

alleviate excesscapacity

minimize risk and

diversify markets

Disadvantages:

Higher unit cost toconsumer

Likely lower market

share Limited learning on

country marketcharacteristics

Possible preemptionby competitors


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Phases of exportPhases of export

developmentdevelopmentAs companies learn more about the

process of exporting, they tend to export to more countries

they tend to export to more dissimilarcountries which are located furtheraway

they tend to export a larger percentageof their sales.

The following figure summarizes

the various phases of exporting 6


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Phases of Export Development


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Export StrategiesExport Strategies

Direct exporting

Indirect exporting

Uses intermediaries


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Direct ExportingDirect Exporting

Direct selling involves salesrepresentatives, distributors, or retailers who arelocated outside the exporter's home country.

Direct exports are goods and services that are sold toan independent party outside of the exporters homecountry. Mainly the companies are pushed by corecompetencies and improving their performance of valuechain

More aggressive

Requires more contact with foreign companies

Uses foreign sales representatives, distributors, or

retailers


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Channels in DirectChannels in Direct

ExportingExportingSales representatives: use the

company's promotional literatureand samples

Foreign distributors: resell the

products

Sell directly to foreign retailers or

end users


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Indirect ExportingIndirect Exporting

Export IntermediariesExport IntermediariesIndirect exports, is simply selling goods

to or through independentdomestic intermediary in their ownhome country, then intermediaries

export the products to customersforeign markets

Companies use external specialists for

exporting before developing internalcapabilities

Companies may market their productseither directly or indirectly through11


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Export IntermediariesExport Intermediaries

Direct Selling

Direct selling involves sales

representatives, agents, distributors,or retailers

A sales representativesales representative usually

operates on a commission basis

A distributordistributor is a merchant whopurchases the products from the

manufacturer and sells them at a 12


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Export IntermediariesExport Intermediaries

Indirect Selling

Commission agents work for thebuyer

Export Management Companies(EMCs) provide export services for aspecific exporter or group of

exporters

Export Management Companies

EMCs are mostly small, entrepreneurialventures that tend to specialize by 13


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Export Trading CompaniesExport Trading Companies

(ETCs)(ETCs)

ETCs tend to operate on thebasis of demand rather thansupply

ETCs can be formed by

Competitors can be exempt fromantitrust laws

State and local governments

Money-center banks

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IMPORTANT FACTORS FORIMPORTANT FACTORS FOR

SUCCESSFUL EXPORTINGSUCCESSFUL EXPORTINGCommitment of the firms management

Exporting approach reliant on strong skillsbase

Good marketing and informationcommunication system

Production capacity & capability, productsuperiority, competitive pricing

Effective market research

Effective national export policy


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Management focus: ExportingManagement focus: Exporting

strategy at 3Mstrategy at 3M

Minnesota Mining and ManufacturingCo.

55% of the firms revenue was throughexporting

Export Strategy

Enter on a small scale to reduce risks Add additional product lines once the

exporting operations start to becomesuccessful

Hire locals to promote the firms products

Formulate global strategic plans for the


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THANK YOUTHANK YOU

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Documents

IM final.ppt