...the marketing of goods produced in one country to another. It is considered to be the easiest way of entering foreign markets. Exporting can be either indirect or direct. In general, the advantages of exporting are: i) manufacturing is home based, hence it is less risky that overseas based, ii) gives an opportunity to “learn” overseas markets before investing in bricks and mortar, and iii) reduces potential risks of operating overseas (FAO, 1997). Some of the disadvantages are: i) limited profit potential, ii) company gains no market information, or experience in new markets, iii) plants may not be located in low cost locations, iv) high transport costs, v) tariffs tend to be highest on finished goods, and vi) loss of control as markets are distant form production (http://uwf.edu/rsjoland/12%20Market%20Entry%20Strategies%20as%20Used%2004%201.pdf). b. Licensing – method of foreign operation whereby a firm in one country agrees to permit a company in another country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor. The following are the advantages and disadvantages of this strategy. Advantages | Disadvantages | 1. Provides opportunity to low risk manufacturing relationships | 1. Disclosure of accumulated competitive knowledge and experience | 2. Capital not tied up in foreign operation | 2. Creates possible future competitors | 3. Access to difficult markets | 3. Lack of control over license operations | 4. Improved...
Words: 1582 - Pages: 7
...Brief discussion on Alibaba’s legal risk My favorite company is Alibaba. Alibaba started his business as a platform for facilitating E-commerce between buyers and sellers in China in 1999. There are 17000 employees in more than 50 cities and 50 million users in 240 countries now. Before started the process for an initial public offering in the U.S, Alibaba.com has hold 70% of China’s online E-commerce market. As the biggest IPO in history, Alibaba became one of the most valuable tech companies in the world. By listing in the U.S., Alibaba come into the international stage. It recognized by overseas investors and investment corporates, which help enlarge its business scale and attract more partners on both domestic market and its overseas market. I am interested in Alibaba when I heard that there was a contract between Yahoo and Alibaba in 2006. It clarified that if Alibaba does not start Initial Public Offering before 2015 it cannot get back a half of shares of the company owned by Yahoo and Yahoo could deal with all Alibaba’s shares as Yahoo’s will. Proofs by facts, Alibaba made his IPO before 2015. I have to admire the man behind Alibaba—Mr. Jack Ma. As the spiritual leader of the company, Mr. Ma become a hero in the heart of many people. But if I could be a CEO of Alibaba, I have to say that Alibaba is facing a slew of new business challenges and potential legal risk. Alibaba’s legal and ethical analysis: 1) Doubt on legal structure of Alibaba. Alibaba...
Words: 1191 - Pages: 5
...Fraud Order - 352152 This essay/coursework/dissertation was stolen from UK Essays, call 0115 966 7955 to speak to a Fraud Officer now for more details. We have made it available for use as a study resource. International Trade Law 1. The selection of an alternative dispute resolution mechanism is particularly pertinent in international trade cases because the parties are, by definition, domiciled in different nation states (Chuah, 2009). Since an agreement must therefore be reached on choice of law issues, it is common for parties to consider stepping outside standard litigation processes altogether and instead stipulating for arbitration to take place (Neipert, 2002). Arbitration offers several advantages over litigation. Typically, it is less expensive than litigation, since fewer legal professionals are required. It is also perceived to lead to a speedier resolution of disputes due to decreased formality, the removal of the need to schedule around the timetable of the formal court system, and, typically, the absence of a right of appeal (Schmitthoff, 2007). Arbitration allows the parties to control a number of variables in the dispute resolution process through prior agreement (Mustill & Boyd, 2008). These include the choice of an arbitrator with specialist knowledge of the relevant area, the scope of the arbitration, the location of arbitration and the choice of law. In addition, arbitration is a private rather than public procedure and therefore will not be subject...
Words: 3854 - Pages: 16
...International Review of Business Research Papers Vol.3 No.1. March 2007, Pp.183 - 196 Entry Modes For International Markets: Case Study Of Huawei, A Chinese Technology Enterprise Donglin Wu* and Fang Zhao** This case study analyses and discusses the internationalization process of Huawei, a leading telecommunication equipment manufacturer in China. Our research aims to explore the special features of the internationalization of Chinese hi-tech firms through a case study and to identify the factors that affect Chinese hi-tech firms’ international entry mode decision. In this paper, several foreign market entry modes were discussed. Issues of why and how to take into account the factors of industrial characteristics, environmental factors, firm factors, and moderators for internationalization and how to employ different entry modes in different host markets are discussed and illustrated based on this case study. It is found that industrial characteristics and home country’s technological reputation affect to a great extent the internationalization path of the hi-tech firm studied. The research also shows that in terms of hi-tech enterprises’ internationalization, the factors such as international experience and firm size are not as important to traditional manufacturers as to hi-tech enterprises. Field of Research: Management 1. Introduction After two decades’ development, many Chinese technology enterprises stride their first step in internationalization. Among them...
Words: 4938 - Pages: 20
...profitable, more and more American corporations choose to stash their cash overseas, since the developing countries such as China use tax incentives to attract foreign firms to support economic growth. Launching business in the developing countries become the strategy help foreign firms to increase their after-tax returns. For example, General Electric keeps only 30.7 billion of its 85.5 billion in cash reserves in the U.S., while intends to invests more than 1.5 billion in joint ventures with Chinese state-owned companies in “key high-technology sectors”. The purpose of the paper is to present the forms of foreign investment enterprises can be taken in China and the different tax incentives are used to induce foreign investment enterprises, then to analyze their influence on selection of a particular form of FIE. Body China developed one of the biggest market in the world and is attracting more and more global investors to move into China's market. It is necessary for foreign investor to understand all the potential tax costs would be incurred in China before making an investment decision in order to operate business in a most efficient way. Learning the regulation of taxation is the first step for foreign investors who decide to invest in China. The investment forms of FIE in China In China, foreign investment enterprises take four forms which is representative office, equity joint ventures, contractual joint ventures and wholly foreign-owned enterprises. Equity joint venture...
Words: 1245 - Pages: 5
...Laws 310 Becoming Global Jose Rivera Professor Jennifer Stephens Devry University November 28, 2015 Introduction The client Gloria Smithson has successfully started and grown her business. Gloria has been manufacturing widgets in the United States and has ran into a slight issue. The cost of raw materials has increased by two hundred percent with her current supplier and is looking for other options. Gloria has found a new supplier, Greenleaf Manufacturing, which is willing to negotiate with her. On the same note Gloria has been considering an overseas manufacturer, and has met with manufacturers in Brazil and China who have submitted a proposal as well. Gloria has been selling approximately 12,000,000 widgets per year. She also recently received a purchase order from a large retailer for 8,000,000 widgets and a guarantee for a minimum of 13,000,000 widgets over the next two years. The purchase order stated that continued business is dependent on paying no more than $7.34 per widget. In order to figure out the best option for Gloria we have to determine what her cost, sales price and profit would be. Gloria’s current cost to manufacture widgets is $6.22 and her sales price is $9.18. Gloria’s current profit per widget is $2.96. Fulfilling this and future purchase orders with this large retailer will take Gloria’s business to the next level, but to do that she will have to get her manufacturing cost...
Words: 1302 - Pages: 6
...Analysis……………………………………………………………………………………………………………………10 6. Conclusion……………………………………………………………………………………………………………….11 7. References……………………………………………………………………………………………………………….12 TITLE: A case of international expansion of two markets and one product. EXECUTIVE SUMMARY Over the years, the nature and dynamics of Guysuco Company’s engagement with the overseas markets have gone through a shift. Overseas expansion and competiveness are increasingly dependent on firm level capabilities rather on its national traditional products. The process of globalization at Guysuco has led to the development of competitive capabilities which has brought about intense partnership and interaction with global corporations. Additionally, the emergence of computer and internet has led to advanced information technology where the world of business has resulted in emergence of new types of businesses and new ways of organizing it. This 21st century has encountered rapid changes in the global economy. Every business will encounter growing pains and unexpected curves when venturing into international markets. Doing business overseas do require a variety of vendors and partners. In recent years, Companies in Guyana such as Guysuco are forced to take a strategic decision when thinking of expanding internationally. These...
Words: 1881 - Pages: 8
...instrument of another entity. Such a definition, in turn, generates a need to define a financial asset; a financial liability; and, an equity instrument. According to paragraph 11 of AASB 132, ‘financial asset’ means any asset that is: (a) cash; (b) an equity instrument of another entity; (c) a contractual right: (i) to receive cash or another financial asset from another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or (d) a contract that will or may be settled in the entity’s own equity instruments and is: (i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or (ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entity’s own equity instruments. A financial liability, on the other hand, means any liability that is (a) a contractual obligation: (i) to deliver cash or another financial asset to another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or a contract that will or may be settled in the entity’s own equity...
Words: 2607 - Pages: 11
...multinational company named Time Warner that has revenues and cost. It will also discuss two operations under Time Warner operations that contribute to the profits. It will also discuss the means that the company uses to hedge against exchange rate risk. The paper will discuss the effectiveness of increase or decreasing the dollar’s exchange value on the company’s profitability. Economics for the Global Manager Introduction A global leader in media and entertainment, Time Warner Inc. has businesses in television networks, film, and TV entertainment and publishing. Time Warner Inc. uses its industry-leading operating scale and brand to create, package, and deliver high-quality content worldwide through multiple distribution outlets. The operating divisions of Time Warner Inc. are at the top of their categories including Warner Bros. Entertainment and Turner Broadcasting System which are measured by quality, popularity, and financial results. The union on Time Warner Inc. business and employees is based on the passion for storytelling and the commitment to gaining the competitive advantage (About Us, 2013). Revenues The programming services that are provided by Time Warner Inc. are subscription revenues based on contractual programming rates that are negotiated. The advertisements aired in a period are recognized as advertising revenues. Time Warner Inc. acts as an agent or principal in a transaction which determines how the company will report its revenue. Time Warner...
Words: 1007 - Pages: 5
... |4-11 | |Practice of International Bank Guarantee at MTB |12 | |Problems |13 | |Recommendations and Conclusion |14 | Introduction A guarantor issues a guarantee usually a bank on behalf of an exporter. It is a guarantee to the buyer that the exporter will fulfill the contractual obligations. If these obligations are not fulfilled, the guarantor undertakes to pay a sum of money to the buyer in compensation. This sum of money can be anything from 1% to 100% of the contract value. Bank guarantee is one of the security instruments which can be utilized to reduce the risks or to recover the losses or damages involve in many business transactions to buyer and seller since it's a guarantee from a bank, where it agrees to pay if the client, on whose behalf the guarantee has been issued fails to pay. Many genuine requirements of the business can be fulfilled with bank guarantee like purchase of machinery, obtaining goods, buy equipments or draw down loans, even when money is not available in the business, on the assurance of the bank in the form of bank guarantee....
Words: 3098 - Pages: 13
...When we think of risk management techniques, our first thoughts are to evaluate what are risks are then create value by purchasing insurance to protect potential financial loses. Others start creating financial nest eggs by placing money into savings. While both techniques are valid techniques, they are but pieces of a larger risk management pie that requires techniques to consider when looking into solutions for optimal risk management. There are many perspectives on how to manage financial risk but for the purpose of this analysis I will be evaluating two specific experts Dr. James Kallman and Robert S. Kaplan and Co-Author Annette Mikes on their techniques for managing risk. Dr. Kallman utilizes a risk management solution tree which involves the GEICO approach, these risk prevention techniques include: Government mandates, Education, Information management, Contractual Transfer, and Operations Management; these techniques preserve assets, save lives, and save risk financing costs. In analyzing Robert Kaplan & Annette Mikes techniques requires a qualitative distinction between the risk levels in order to properly categorize them as Preventable risk, Strategy Risks, or External Risks, with the belief that we can influence risk by not buying into standard forecasting and biases which leads to misreading ambiguous threats. After analyzing both Dr. Kallman’s assessment of Financial Risk Management techniques and comparing to Robert S. Kaplan & Annette Mike’s techniques I believe...
Words: 1981 - Pages: 8
...fa Factors Effecting Small and Medium Enterprises, Selection of Market Entry Mode Naveed Hussain Malik (naveed.hm@gmail.com) 770325-3059 Masood Hussain Chudary(zindagi03@hotmail.com) 801014-5855 Supervisor: Eva Wittbom Masters Degree Thesis in Business Administration School of Management Sciences Date of submission Abstract Development in infrastructure limits the communication gap, speedy travel and low cost tariff barriers as well other drivers of globalization have made overseas markets easier to get small firms and gave more opportunities to SME´s internationalize. The market entry mode choice or selections have strong effect the success or failure of the company. For instance an insufficient or wrong entry mode selection can decrease opportunities and limit important choice for the firm and could lead to high financial loss as well as lose control on overseas market. The purpose of research study is to provide a deep and better understanding of the factors those effecting SME´s selection of market entry mode. Research question how can the influence of internal and external factors on the selection of market entry mode. A frame of reference led to the building of summary which in turn became the basis for data collection. Two qualitative case studies for Pakistani SME´s namely socks knitter Pakistan and RK International were undertaken. The main findings shows the clear link between the theories claim to be internal and external...
Words: 21311 - Pages: 86
...DSC 2006 Operations Management Outsourcing [pic] I. Introduction Outsourcing is used extensively by both the manufacturing and service industries, and there are plenty of reasons to utilize outsourcing. Organizations make use of outsourcing usually in the interest of lowering cost and to make better use of time and energy costs, hence redirecting their energy to something more important or just to conserve energy. Outsourcing is essentially a division of labour. One simple example involves companies outsourcing their financial statements to accountancy firms to consolidate their expenditures, hence eliminating the need to hire an accountant. Another relevant example would be to hire the services of another company to manage all or parts of the services that otherwise would be otherwise rendered by an IT unit of the organization. Some reasons for outsourcing include organizations being able to focus purely on their core business, for example an automobile factory. The raw materials required to manufacture an automobile are outsourced to other companies and hence the company itself can focus on just creating quality automobiles. By outsourcing the raw materials to companies who specialize in providing them, they can also ensure that the raw materials are of reasonably better quality and this can be done by contracting with a new service level agreement. Another reason being companies are able to access the wide pool of talent available through hiring agencies. In layman terms...
Words: 4008 - Pages: 17
...Barbara’s Blouses 1. Among some of the risks that can be avoided by sourcing from overseas instead of domestic are: a. Difficulty reordering best-selling products much more quickly and efficient; b. Inability to easily change or customize products from the initial order placed. c. Different time zones d. Language and cultural differences e. Customs regulations and shipment issues. f. Government tax regulations and trade agreements g. In-transit natural disasters h. Government or civil unrest i. Quality control issues 2. The recent economic downturn has to some extent caused swings in the exchange rates and as a result, foreign currencies are depreciating against the U.S. dollar. Many businesses abroad prefer to transact in U.S. dollars due to its strength. As a result for a business person here it will be a lot easier to specify in contractual agreements the use of U.S. dollars unless the business partner suggest otherwise. 3. The buyers receiving dock should be used for the blouses Barbara’s firm is buying. From the point of shipment up until it’s received, the seller will still have ownership of the title should there be any enforceable events occurring in-transit. Also, the receiving dock will have to do a quality check of all products received and variances should be communicated back to the seller for reimbursement. 4. Barbara can prevent goods they import made by child or prison labor by constantly...
Words: 578 - Pages: 3
...Essay topic: why companies use currency derivatives? Currency derivative can be defined as a contract or financial agreement to exchange two currencies at a given rate or a contract whose value is derived from the rate of exchange of two currencies on spot (Shoup, 1998). Currency derivatives are developed and adopted to implement a strategy known as hedging, in which an organisation acquires a contract in order to offset an expected drop or rise in value of a position or future cash flow (Belk & Edelshain, 1997). This essay will outline the incentives and rationales behind an organisation that uses currency derivatives. There are three types of currency derivatives used in hedging, future contracts, forward contracts and options, although swaps are also commonly considered as a currency derivative (Shoup, 2008). These instruments are derived from a spot rate, which is the price of the “underlying currency” (Eiteman, Stonehill & Moffett, 2009). Options are normally more costly than future contracts and forward contracts, because options are rights rather than obligations to buy or sell a currency (gives buyers the right not to exercise the contract if the spot rate movement is not favourable) (Belk & Edelshain, 1997). Research in New Zealand indicates that 70% of currency derivative users used forwards, which are most prevalent currency derivative instrument (Chan, Gan & McGraw, 2003). This is possibly because forwards are easy to manage and understand and can be used in frequent...
Words: 2235 - Pages: 9