International Trade management

• A clear statement of business objectives reflecting the corporate strategy
• A set of specific tasks taken in the near term to implement the business strategy
• An operational plan that assigns tasks, allocates resources, estimates costs and sets targets
• Includes contingencies for changing conditions
• Contains monitoring and reporting

• Planning is correlated with business success
• A tool for managers to navigate in a complex and rapidly changing environment
• A way for staff to understand what is expected of them and where the firm is going
• An instrument for communicating with capital providers, strategic partners, government and suppliers

1. Specify objectives
   1. What the enterprise intends to achieve over the planning cycle
2. Gather information
   1. Primary source: Customers, Employee,..
   2. Secondary source: Published documents, Literature,...
3. Draw up the (business) plan
4. Implement
5. Evaluate
   1. Ongoing feedback mechanisme
6. Revise assumptions
   1. Apply new information to revising the firm's original planning assumptions
7.  

The four basic functions of any company

• Executive
  • Development
  • Production
  • Selling
  • Administration

• By product lines
  • Cosmetics
    • Development, Prod, Mark&Sales, Corporate Services
  • Small appliances
    • Deve, Prod, M&S, CS
  • Batteries
    • Deve,Prod, M&S, CS
• By Markets
  • North (Devel, Prod, M&S, CS)
  • East  (Devel, Prod, M&S, CS)
  • West (Devel, Prod, M&S, CS)
  • South (Devel, Prod, M&S, CS)

• All issues related to the international marketing function
• Seeking out new markets
• Developing a market intelligence database
• Deciding on market entry strategies
• Coordinating the activities of the sales manager and the shipping manager
• Developing the marketing and sales plan, in conjunction with the sales manager
• Planning advertising and sales promotion including trade fairs

• May report to the International Marketing Manager
• Serving as the main point of contact for clients
• Working with foreign agents and distributors
• Studying market trends
• Performing costing, supplying quotations, and drawing up sales contracts
• Coordinating with production and shipping regarding costing and schedules, and ensuring commitments are honoured
• Launching new products
• Training and motivating agents and sales people

• Tasks related to the physical importing and exporting of goods
• Identifying the most efficient, cost-effective modes of transport
• Ensuring documentation requirements are satisfied
• Monitoring the movement of shipments, both inbound and outbound
• Maintaining close liaison with production, sales and clients

•Gathering costing data

•Monitoring credit limits

•Administering orders in process

•Preparing invoices

•Records filing

•Identifying, selecting and developing new suppliers

•Scheduling purchases and deliveries

•Negotiating contracts

•Controlling inventories

•Preparing long-range plans for purchasing needs

•Making progress on cost reductions and standardization in materials requirements

•Company website

•Web-based catalogue, ordering and payment system

•Automated telephone answering systems

•Mobile computing devices

•Electronic Data Interchange (EDI)

•Multilingual word-processing software

•Translation software

•Electronic spreadsheet & customized costing templates

•Customer Relationship Management (CRM) software

•Automated web-based procurement and logistics

•Graphics or desktop publishing software

•Outsourcing: the company pays for goods and services from external providers

•Agency agreements: the company reimburses representative services through commissions

•Partnership or strategic alliance: the parties share the proceeds of the venture according to a pre-arranged formula

Pros:

• Focus on core competencies
• Reduces labour costs
• Access to more specialiyed and current knowledge( outsourcing to specialist contractors)
• Converts fixed costs into variable costs
• Access to cheaper products and services on a global basis

Cons:

• Less quality control
• Potential of establishment of a grey(copycat)  market
• Potential of supply disruptions (Versorgungsstoerung)
• Lack of productivity
• Potential misrepresentation of company

•A desire to learn about the factors that affect the exporter’s business

•Evidence of efforts to improve service

•Depth of knowledge about the industry, the experience, to anticipate problems before they occur

•Investment in technologies and personnel to share information

•Ability to grow with the client

•Not representing competitors

•Readiness, interest and ability to feedback information on target countries

•Setting common goals and objectives

•Single point of contact (Fixer Ansprechpartner)

•Defining responsibilities (Written form)

•Incentives (Anreiz)

• Effective supplier incentives.

•Resolving disputes

• Try to anticipate potential problems and address them then

Important to smaller organiyations. Partnering as techniques for reducing costs, mitigating risks, accessing new technologies,...

•Licensing and cross licensing

•Co-marketing or distribution

•Joint production or manufacturing

•Joint research and development

•Joint ventures

•Virtual corporations and relationship enterprises

•Outsourced services

Pros

• Share high cost and risks
• Access new technologies
• Access to larger capital resources or new markets
• Foreign partners can give valuable advice on how to modify a product
• Focus on their strengths

Cons:

• May become overly dependent for certain functions
• May lose valued employees to a partner
• Big amount of management time may have to spend for managing relationship
• Imbalance of influence if a small firm partners with a larger firm.

•Technical expertise

• Potential partner will have either complementary or better technology than the firm

•Capacity of organization: The potential partner must have the capacity to perform the allocated functions

•Financial capability

•Ability to cooperate easily and effectively with the potential partner( otherwise you are likely to experience substantial coordination and communications cost)

•Complementarity of organizations (relative size, financial capability, organizational structure, management style, operating policies, philosophy, etc.)

•Compatibility of objectives

• Are the strategies and objectives of your firms compatible?

•Trust (Since today's partner may be tomorrow's competitor)

• Annual sales
• Number of employeesNature of business (product lines, services)
• Competitive advantages
• Experience
• Networks
• Strengths/Weaknesses
• Technical skills
• Financial resources

•Ownership structure and the valuation of equity contributions

•Control: selection of management and the board, decision making on future strategic course

•Division of royalties

•Policy on the retention/distribution of earnings; procedures for raising or contributing additional capital

•Staffing procedures

•Provisions for exit of a partner

•Dissolution or liquidation of the partnership and subsequent ownership of the joint venture’s technology, customer lists, trademarks, brand names and other assets

• Fundamentally transforms the way trade is managed (Grundlegende aenderung wie markt gemanaged wird)
• Makes it imperative that managers monitor a rapidly changing business environment
• Fosters additional complexity and competition
• Forces managers to respond quickly to new challenges
• Creates additional business opportunities 

• Transportation: the death of distance
• Telecommunication: information anywhere, anytime, in any form
• Global infrastructure for managers
• Knowledge intensity
• Importance of services
• Accelerating pace of change
• Accelerating pace of change: Enhanced competition 

• World Trade Organization -> Dominance of WTO. Three key principles:
  • Non discrimination
  • reciprocity; countries that accept tariff concessions should offer comparable concessions in return
  • transparency, prohibits the use of trade restrictions.
• Regional trading blocs (Impatient with the WTO process- looking for more immediate benefits by entering in regional trading arrangements.
  • NAFTA(North American Free Trade Agreement, US., Canada, Mexico)
• A multipolar world(Früher Amerika als alleinige wirtschaftsmacht. Nach WW2 mit europaa 2/3 of world GDP, nun auch Asiatische Länder als weltmacht.
• Interdependence (abhänig von anderen Ländern)

• World Trade Organization
  • A levelling of the playing field among its members
    • Broaden perspective on which markets can be accessed.
• Regional blocs
  • A barrier to non-members of the bloc
  • Look for partners to get inside the bloc.
• Multipolarity
  • Wider possibilities for partnership and sourcing
  • Look for partnerships and sources in emerging economies, especially in Asia.
• Interdependence
  • New forms of cooperation
  • Look for alliance and partnership opportunities.

• Intensification of competition; resons for this:
  • accelerating technological change offers new product and service possibilities
  • information technology allosw automation
  • falling barriers brings many new players into the international marketplace
• Competition and cooperation
  • Partnering- each can focus on what it does best
• World products versus local customization Corporate structures
  • Higher degree of standardization of products can be expected in the future. Think globally but act locally
• Erosion of nationality
  • Transcend (überschreiten) national boundaries in order to operate in the global marketplace.
• Intra-corporate trade
• Implications for smaller firms 
  • Früher gut geschütz vor int. Competition. With the emergence of the global economy, little of this traditional business environment remains.

• Competition
  • Intensification of competition
  • Constant monitoring and analysis of the competitive environment.
• Cooperation
  • Emergence of new partnership models
  • Search for new alliance opportunities.
• Erosion of nationality
  • Increasing reliance on multinational workforces
  • Position company as an international “citizen of the world.”
• World products vs. customization
  • Choice of strategies
  • Careful internal planning to determine optimal strategy for the firm.
• Intra-corporate trade
  • Two thirds of trade reflects either monopolistic or oligopolistic structures
  • Get inside this trade through alliances or supplier arrangements.
• Corporate structures
  • New and varied corporate models
  • Strategic planning to determine optimal location and integration of varied company operations.
• Smaller enterprises
  • Information technology has levelled the playing field somewhat for SMEs
  • Explore ways of using Internet and other technologies to enter world markets.

• Security
  • International travel has become more complex, time comsuming and costly because of terrorist org.
• The big get even bigger
• Environmental concerns
  • Environmental issues now affect the decisions mangers make. For instance: 
    • products and all corporate practices must conform to local environmental regulations
    • no hidden environmental liabilities (verbindlichkeiten) could arise becaufe of the deal
• Business ethics
  • Understand and adhere the laws of the countries where they operate
• Capital markets
  • Manager must remain ever vigilant (wachsam) of how his operations and his plans can be affected by distant events
• Rising costs 
  • Business travel becomes more expensice, companies ma make greater use of videoconferencing.

• Security
  • Increasing concerns about personal safety of business people
  • Careful planning and appropriate measures for managers who have to travel.
• Environmental concerns
  • Public concerns about impact of corporations on the environment
  • Incorporate environmental issues into corporate strategies and plans.
• Business ethics
  • Growing international anti- corruption campaigns
  • Ensure company operations are transparent and conform with applicable laws.
• Capital markets
  • Integration means local disruptions become international disruptions
  • Strengthen risk management through appropriate contingencies.
• Rising costs
  • Possibility of changing relative costs of inputs and transportation
  • Develop contingencies if price relationships change drastically.

• Moving from vision to business planning
• Corporate profile
• Human resources
• Target market
• Market entry
• Global operations
• Global finance
• Risk management 

• Price
• Prestige
• Features
• Timeliness
• Service
• Convenience
• Reliability
• Unrecognized needs
• The cool factor

• Inbound logistics
  • Just-in time supply systems to reduce inventories
  • Price Timeliness
• Production
  • Automated production processes
  • Price, Quality
• Outbound logistics
  • Use of specialized courier services to deliver goods to the customer’s home
  • Timeliness, Responsiveness, Convenience
• Marketing and sales
  • Highly trained sales staff
  • Comprehensive web-based catalogues and ordering systems
  • Responsiveness, Convenience
• Service
  • 24/7 telephone service desk
  • Regular scheduled visits to service department for maintenance
  • Warranties
  • Service

• Infrastructure
  • Advanced communication systems
  • Responsiveness
• Human resource management
  • Internal incentive to ensure loyalty and reduce turnover
  • Reliability, Responsiveness
• Technology development
  • Use of computer-assisted design processes to make development more efficient
  • Features, Technical reliability
• Procurement
  • Qualifying suppliers to ensure only the best are engaged
  • EDI systems for managing and tracking suppliers and service providers
  • Quality, Price, Reliability

• •Sales and marketing
  • Make all employees part of the firm's marketing
• •Production (flexible manufacturing)
  • Focus on the ability to introduce new products and to adjust production volumes on an ongoing basis.
• •Administration (finance, etc.)
  • continously upgrading the skills, tools of its administrative personnel.
• •Integration: a seamless(nahtlos) process-> improve continously
• •Electronic data interchange (EDI)
  • Enables a compnay to improve cooperation with its customers (quicker communication, improved customer service, reduced paperwork)
• •Just in time manufacturing
  • Minimize inventories
• •Logistics
  • ablility to supply customer with the right product, proper condition at the established price when and where it is needed and at the minimum cost of supply

•Political - conditions, policies, laws, regulations

•Economic - trends, prices, rates, taxation

•Social issues - demographics, lifestyles, health

•Technology - developments, rates of innovation

•Environmental - concerns, impacts, regulations

1.Identify critical performance factors

2.Build a team

3.Develop a profile of the critical performance area to be benchmarked

4.Plan for data collection

5.Select the comparison group

6.Perform the comparison

7.Develop an action plan

8.Monitor the results

Compare yourself to the best in the busines to get ideas for what to improve.

Provides an early warning system that can spot flaws and weaknesses before they grow into crises

• •Financial analysis (resources and profitability)
  • Sales, Gross profit, Net income after taxes, ROI
• •Process benchmarking (internal operations)
  • Value of goods in inventory, sales per employee, Customer complaints, Time spent on recruiting
• •Performance (focus on resulting product, service)
  • Price, Reliability, Visual appeal, Service (Installation, Return policy)
• Strategic benchmarking (managements  capabilities
  • Skill levels of employees, Partnerships, R&D spendings in % of revenue, public image

Difference between the actual and the potential.Flows from Benchmarking. Once a company understands the level of performance that is general in its industry, it can compare that to its own performance.

• •Usage gaps
  • Gap between the total potential in a market and the actual current usage by consumers in that market.
• •Product gaps
  • That part of the market that a company is excluded from because of the characteristics of its existing products. Segmente die ich nicht bediene.
• •Competitive gaps
  • Difference between the company's performance and the share of business achieved by similar products. Effects of factors such as price and promotion
• •Market gaps
  • Market segments that have not been identified or are not served by anyone.

• •Direct attack – slash prices, introduce new features, launch comparison advertisements unfavourable to the competition, or go after markets that competitors have served poorly
• •End-run – going into unoccupied markets or countries that have been ignored by the rest of the industry
• •Pre-emption – sometimes the first company into a market gains a position from which later entrants cannot dislodge it
• •Acquisition – eliminate a rival by purchasing it