Int'l Business Chapter 16

What are the five distinct versions of counter-trade?

*barter *counter-purchase *offset *compensation or buyback *switch trading

What are the three purposes for a Bill of Lading?

*its a receipt *its a contract *its a document of title

Common pitfalls

*poor market analysis *poor understand of competitive conditions *a lack of customization of local markets *a poor distribution program *poorly executed promotional campaigns *problems securing financing *a general underestimation of the differences and expertise required for foreign market penetration *an underestimation of the amount of paperwork and formalities involved

A _______ is an order written by an exporter instructing an importer to pay a specific amount of money at specified time.

Draft

Sogo Shosha

Japanese trading companies; a key part of the keirestsu, the large Japanese industrial group

Barter

a direct exchange of goods and/or services between two parties without a cash transaction

Which of the following is NOT common pitfall of exporting?

a product offering that is customized to the local market

Time draft

a promise to pay by the accepting party at some future date - delay pmt

Export-Import Bank

agency of the U.S. government whose mission is to provide aid in financing and facilitate exports and imports

buyback

agreement to accept a percentage of a plant's output as payment for contract to build a plant

Offset

agreement to purchase goods and services with a specified percentage of proceeds from an original sale in that country from any firm in the country

Draft

an order written by an exporter telling a importer what and when to pay

Used primarily for one-time only deals in transactions w/trading partners who are not creditworthy or trustworthy

barter

Which is the most restrictive counter-trade arrangement?

barter

________ is the most restrictive counter-trade arrangement.

barter

It occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made

counterpurchase

Export Management Companies (EMCs)

export specialists that act as the xport marketing department or international department of client firms

Counterpurchase

is a reciprocal buying agreement

Sight draft

is payable on presentation to the drawee

Draft/Bill of exchange

is the instrument normally used in international commerce for payment

A letter of credit

issued by a bank at the request of an importer and states the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents

Bill of Lading

issued to the exporter by the common carrier transporting the merchandise

Which of the following is NOT a purpose of the bill of lading?

it is a form of payment

Counter-trade is attractive for all of the following reasons EXCEPT

it may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably

Countertrade

refers to a range of barter-like agreements that facilitate the trade of goods and services for other goods and services when they cannot be traded for money

Occurs when a third-party trading house buys the firms counter-purchase credits and sells them to another firm that can better use them

switch trading

Which type of counter-trade arrangement involves the use of a specialized third-party trading house?

switch trading

Switch trading

the use of a specialized third-party trading house in a counter-trade arrangement