Subject Code: IMT-17

Subject Name :

International Marketing

ASSIGNMENTS
PART A
Q1. In International Marketing it is imperative to create a relationship that holds value
for thecustomers and for organization Discuss .
Ans People are the very essence of an organization. All the technological up
gradation, state of the art facilities, et al, can come to a naught if all the employees
in the company are not performing optimally. It is important for employees to be
engaged as much to be developed, so that their productivity is aligned with the
organizational requirements. Companies need to find out indigenous ways to
challenge employees so as to keep them engaged.
The Internal Marketing concept was first proposed in the mid 1970s as a way of
achieving service quality a major problem in the services area. Its basic premise
was to have satisfied customers, the firm must also have satisfied employs and that
this could be best achieved by treating employees as customers, i.e. by applying the
principles of marketing to job design and employee motivation. Since then, the
concept has seen a number of major developments and its application is no longer
confined to the services area. It has been shown that any type of organization can
use Internal Marketing to facilitate the implementation of it external marketing
strategy or any other organizational strategies.
Despite the rapidly growing literature on Internal Marketing, relatively few
organizations actually apply the concept in practice. One of the main problems
contributing to this is that there does not exist, a single unified concept of what is
meant by Internal Marketing. However, Internal Marketing can be holistically
defined as Internal marketing is a planned effort using a marketing-like approach
directed at motivating employees, for implementing and integrating organizational
strategies towards customer orientation.
Literature Review
Pete Naude opines that Internal Marketing orientation is an area within the broader
market orientation that remains relatively under-researched.
The article by Tim R.V. Davis examines the impact of consultative and participative
styles of management on internal marketing. It shows how general managers,
department managers and individuals can use internal marketing to increase
employee involvement in reaching decisions, making commitments and taking
action.

David Ballantyne explores the structural relationships through which internal

marketing can create value for an organisation, its customers and its employees. It
is argued that internal marketing requires a relationship-mediated approach, where
planned phases of learning activity in volunteer groups generate new internally valid
knowledge critical to the improvement of external market performance.
Marelise Pitt, Johan Bruwer, Deon Nel andPaul Berthon state that internal marketing
is a critical issue facing marketing professions, human resources and other
executives. They argue that if poor service is provided between employees it is
unlikely that good service will ultimately be provided to the external customer.
Internal marketing (IM) focuses on acquiring and retaining customer-oriented
employees. Critics of internal marketing claim that the term is simply a synonym for
good human resources management. The concepts of internal marketing and human
resource effectiveness (HRE), at both a strategic and technical level, are considered
and suitable measures identified. Data collected by Michael T. Ewing & Albert
Caruana and a moderated regression analysis used to investigate the hypothesized
relationships provided empirical support that there is a valid and distinct
demarcation between IM and HRE, and that IM is an important antecedent to HRE.
Gould states that when information is integrated with skills, understanding and
experience, it becomes knowledge which the organization can use to its advantage.
His research illustrates the importance of communication processes alongside
business processes to achieve continuing improvement. He concludes that many
businesses should give serious consideration to the idea that HR and marketing
should be combined.
Nigel F. Piercy observes that while customer satisfaction measurement is currently
one of the commonest prescriptions in both the marketing and management
literatures, little attention has been paid to the effects of customer satisfaction
measurement, particularly in terms of the impact on the internal market, i.e. the
employees and managers inside the organization. The findings of a recent study of
the internal market effects of customer satisfaction measurement identifies a
number of ways in which the use of customer satisfaction information may have
negative effects within the organization, which may stand in the way of the
implementation of market strategies of service and quality. This suggests a
management agenda which extends far beyond the acquisition of customer
satisfaction data and reporting systems, to consider the full impact of such
measurement systems.
Gilbert D. Harrell & Matthew in their study, Marketing services to satisfy internal
customers, conclude that staff unit managers in a range of disciplines who want to
serve internal publics better can effectively market their services internally by
understanding and responding to internal decision processes and expectations.
Moreover, internal customers will receive higher quality services if these staff
functions focus their capabilities on meeting or exceeding management
expectations.

Walter E. Greene, Gary D. Walls& Larry J. Schrest in their article in Journal of

Services Marketing, declare that the firms that do not or will not embrace the issues
of internal marketing and incorporate those ingredients into their strategic marketing
plan will see their market share and profit base erode. Internal promotion can create

a positive and/or superior image of the firm and its products in the mind of the
customer.
The article titled, Building brand values through Internal Marketing, shows that
quality of service is central to building brand differentiation within industries that do
not produce tangible products. Internal marketing is an effective way of drawing
attention to service, and encouraging staff in various ways to give the best of
themselves.
A paper titled, Internal brand building and structuration: the role of leadership, by
Christine Vallaster & Leslie de Chernatony provides empirical insights about how
change is brought about during internal brand building. It suggests that successful
leaders act as integrating forces on two levels: integrating the elements of
corporate identity structures, and mediating between the corporate branding
structures and the individual.
Carmel Herington, Lester W. Johnson& Don Scott have found that competitive
advantage can be attained through development of a relationship-building culture
which includes building relationships inside the organization as well as customer
relationships. In fact, successful customer relationships rely on successful internal
relationships.
Timothy W. Aurand, Linda Gorchels & Terrence R. Bishop in the, Journal of Product
& Brand Management, have found that employees seem to have a more positive
attitude toward the brand and are more likely to incorporate this image into their
work activities when there is some degree of HR involvement in the internal
branding process

Q2. Write short note on IMF

Ans The International Monetary Fund (IMF) is an international organization that was initiated
in 1944 at the Bretton Woods Conference and formally created in 1945 by 29 member countries.
The IMF's stated goal was to assist in the reconstruction of the world's international payment
systempostWorld War II. Countries contribute money to a pool through a quota system from
which countries with payment imbalances can borrow fundstemporarily. Through this activity and
others such as surveillance of its members' economies and the demand for self-correcting
policies, the IMF works to improve the economies of its member countries.
The IMF describes itself as an organization of 188 countries, working to foster global monetary
cooperation, secure financial stability, facilitate international trade, promote high employment and
sustainable economic growth, and reduce poverty around the world. The organization's stated
objectives are to promote international economic co-operation, international trade, employment,
and exchange rate stability, including by making financial resources available to member
countries to meet balance of payments needs Its headquarters are in Washington, D.C., United
States. urveillance of the global economy
The IMF is mandated to oversee the international monetary and financial system and monitor the
economic and financial policies of its 188 member countries. This activity is known as
surveillance and facilitates international co-operation. [13] Since the demise of the Bretton Woods

system of fixed exchange rates in the early 1970s, surveillance has evolved largely by way of
changes in procedures rather than through the adoption of new obligations. [12] The
responsibilities of the Fund changed from those of guardian to those of overseer of members
policies.
The Fund typically analyses the appropriateness of each member countrys economic and
financial policies for achieving orderly economic growth, and assesses the consequences of
these policies for other countries and for the global economy.[12]
In 1995 the International Monetary Fund began work on data dissemination standards with the
view of guiding IMF member countries to disseminate their economic and financial data to the
public. The International Monetary and Financial Committee (IMFC) endorsed the guidelines for
the dissemination standards and they were split into two tiers: The General Data Dissemination
System (GDDS) and the Special Data Dissemination Standard (SDDS).
The International Monetary Fund executive board approved the SDDS and GDDS in 1996 and
1997 respectively, and subsequent amendments were published in a revised Guide to the
General Data Dissemination System. The system is aimed primarily at statisticians and aims to
improve many aspects of statistical systems in a country. It is also part of the World Bank
Millennium Development Goals and Poverty Reduction Strategic Papers.
The primary objective of the GDDS is to encourage IMF member countries to build a framework
to improve data quality and increase statistical capacity building. Upon building a framework, a
country can evaluate statistical needs, set priorities in improving the timeliness, transparency,
reliability and accessibility of financial and economic data. Some countries initially used the
GDDS, but later upgraded to SDDS.
Some entities that are not themselves IMF members also contribute statistical data to the
systems:

Palestinian Authority GDDS

Hong Kong SDDS

Macao GDDS

EU institutions:

the European Central Bank for the Eurozone SDDS

Eurostat for the whole EU SDDS, thus providing data from Cyprus (not using
any DDSystem on its own) and Malta (using only GDDS on its own)

Q3. How does international environment play a role in International Trade? What are
the International Environment Segments?

Ans The Ministry of External Relations is responsible for managing the foreign relations of
Brazil. Brazil is a significant political and economic power in Latin America and a key player on
the world stage.[1] Brazil's foreign policy reflects its role as a regional power and a potential world
power and is designed to help protect the country's national interests, national
security, ideological goals, and economic prosperity.
Between World War II and 1990, both democratic and military governments sought to expand
Brazil's influence in the world by pursuing a state-led industrial policy and an independent foreign
policy. Brazilian foreign policy has recently aimed to strengthen ties with other South
American countries, engage in multilateral diplomacy through the United Nations and
the Organization of American States, and act at times as a countervailing force to U.S. political
and economic influence in Latin America. Brazil's foreign policy is a by-product of the country's
unique position as a regional power in Latin America, a leader among developing countries, and
an emerging world power.[4] Brazilian foreign policy has generally been based on the principles
of multilateralism, peaceful dispute settlement, and non-intervention in the affairs of other
countries.[5] Brazil engages in multilateral diplomacy through the Organization of American States
and the United Nations, and has increased ties with developing countries in Africa and Asia.
Brazil is currently commanding a multinational U.N. stabilization force in Haiti, theMINUSTAH.
Instead of pursuing unilateral prerogatives, Brazilian foreign policy has tended to emphasize
regional integration, first through the Southern Cone Common Market (Mercosul) and now
the Union of South American Nations. Brazil is also committed to cooperation with other
Portuguese-speaking nationsthrough joint-collaborations with the rest of the Portuguesespeaking world, in several domains which include military cooperation, financial aid, and cultural
exchange. This is done in the framework of CPLP,[7] for instance. Lula da Silva's recent visit
to Africa included State visits to three Portuguese-speaking African nations (Angola, So Tom
and Prncipe, and Mozambique).[8] Finally, Brazil is also strongly committed in the development
and restoration of peace in East Timor, where it has a very powerful influence.
Brazil's political, business, and military ventures are complemented by the country's trade policy.
In Brazil, the Ministry of Foreign Relations continues to dominate trade policy, causing the
country's commercial interests to be (at times) subsumed by a larger foreign policy goal, namely,
enhancing Brazil's influence in Latin America and the world.[11] For example, while concluding
meaningful trade agreements with developed countries (such as the United States and
the European Union) would probably be beneficial to Brazil's long-term economic self-interest,
the Brazilian government has instead prioritized its leadership role within Mercosul and expanded
trade ties with countries in Africa, Asia and the Middle East.
Brazil's soft power diplomacy involves institutional strategies such as the formation of diplomatic
coalitions to constrain the power of the established great powers.[12] In recent years, it has given
high priority in establishing political dialogue with other strategic actors such
as India, Russia, China and South Africa through participation in international groupings such
as BASIC, IBSA and BRICS. The BRICS states have been amongst the most powerful drivers of
incremental change in world diplomacy and they benefit most from the connected global power
shifts

Q4. Define factors determining the effectiveness of a political system

Ans Political economy of climate change is an approach that applies the political
economy thinking of collective or political processes to study the critical issues surrounding the
decision-making on climate change.
As the issue of climate change reaching the top of international agenda, the complexity of
the environmental problems in combination with various other social political challenges have put
great pressures on the scholars to explore a better understanding of the multiple actors and
influencing factors that affect the climate change negotiation and to seek more effective solutions
to tackle climate change. Analyzing these issues from a political economy perspective helps to
explain the complex interactions between different stakeholders in respond to climate change
impacts and provides broader opportunities to achieve better implementation of climate change
policies. Climate change and global warming have become one of the most
pressing environmental concerns and the greatest global challenges in society today, despite the
fact that a consensus has never been reached in the debates over its causes and
consequences. As this issue continues to dominate the international agenda, researchers from
different academic sectors have for long been devoting great efforts to explore effective solutions
to climate change, with technologists and planners devising ways of mitigating and adapting to
climate change; economists estimating the cost of climate change and the cost of tackling it;
development experts exploring the impact of climate change on social services and public goods.
However, Cammack (2007)[1] points out two problems with many of the above discussions,
namely the disconnection between the proposed solutions to climate change from different
disciplines; and the devoid of politics in addressing climate change at the local level. Further, the
issue of climate change is facing various other challenges, such as the problem of elite-resource
capture, the resource constraints in developing countries and the conflicts that frequently result
from such constraints, which have often been less concerned and stressed in suggested
solutions. In recognition of these problems, it is advocated that understanding the political
economy of climate change is vital to tackling it.
Meanwhile, the unequal distribution of the impacts of climate change and the resulting inequity
and unfairness on the poor who contribute least to the problem have linked the issue of climate
change with development study, which has given rise to various programmes and policies that
aim at addressing climate change and promoting development. [4][5] Although great efforts have
been made on international negotiations concerning the issue of climate change, it is argued that
much of the theory, debate, evidence-gathering and implementation linking climate change and
development assume a largely apolitical and linear policy process.[6] In this context, Tanner and
Allouche (2011) suggest that climate change initiatives must explicitly recognise the political
economy of their inputs, processes and outcomes so as to find a balance between effectiveness,
efficiency and equity.

Definition
In its earliest manifestations, the term political economy was basically a synonym
of economics while it is now a rather elusive term that typically refers to the study of the collective

or political processes through which public economic decisions are made. In the climate change
domain, Tanner and Allouche (2011) define the political economy as the processes by which
ideas, power and resources are conceptualised, negotiated and implemented by different groups
at different scales.[6] While there have emerged a substantial literature on the political economy
ofenvironmental policy, which explains the political failure of the environmental programmes to
efficiently and effectively protect the environment, systematic analysis on the specific issue of
climate change using the political economy framework is relatively limited.

Q5. Please help a new entrepreneur in analyzing markets for entry in a new market
Ans Entrepreneurial orientation has been largely based on the work of Miller (1983)
who suggests that a firms degree of entrepreneurship could be seen as the extent to
which it innovates, takes risks and acts proactively. Innovativeness is the
predisposition to engage in creativity and experimentation through introduction of
new products/services in the market. Risk-taking involves taking bold actions by
venturing into the unknown, borrowing heavily, and/or committing significant
resources to venture into unknown environments. Proactiveness is an opportunityseeking, forward-looking perspective characterized by introduction of new products
and services ahead of the competition and acting in anticipation of future demand.
Lumpkin and Dess (1996) suggest that two other dimensions of entrepreneurial
orientation are salient. These are competitive aggressiveness and autonomy.
Competitive aggressiveness is the intensity of a firms effort to outperform rivals and
is characterized by a strong offensive posture or aggressive response to the actions
of competitors. This aspect is used to measure how entrepreneurial firms deal with
threats. On the other hand, autonomy is the independent action undertaken by
entrepreneurial leaders or teams directed at bringing about a new venture and seeing
it to fruition. Literature suggests that entrepreneurial behaviour is often generative
and creative involving the autonomous actions of organizational actors (Bird 1989). It
follows then that firms that have an entrepreneurial orientation are more prone to
focus attention and effort towards opportunities such as those found in new markets.
Entrepreneurial orientation refers to a firms strategic orientation, capturing
specific entrepreneurial aspects of decision-making styles, methods, and practices
(Rauch 5et al. 2006; Lumpkin and Dess 1996). Given the importance of
entrepreneurship to firm performance, entrepreneurial orientation could be an
important measure of the way a firm
benefit of the resources of firms through focusing attention on the utilization of these
resources to discover and exploit opportunities (Wiklund and Sherpherd 2003).
Consequently, entrepreneurial orientation can explain, in part, the managerial
processes that allow some firms to be ahead of the competition. This is possible
because entrepreneurial orientation facilitates firm action based upon early signals
from its internal and external environments (Lumpkin and Dess 1996).
There is debate on whether or not the dimensions of entrepreneurial orientation
are independent or covary under certain conditions. Covin and Slevin (1989) argue
thatentrepreneurial orientation is best viewed as a unidimensional concept. In
contrast Lumpkin and Dess (1996) argue that entrepreneurial orientation may occur in
different combinations. Kreisser et al. (2002) suggest that the dimensions of
entrepreneurial orientation tend to vary independently. Consistent to Covin and Slevin
(1989) previous
research on this topic has utilized aggregated measures of entrepreneurial
orientation. However, research questions the co-variance between these sub
dimensions (Lumpkin and Dess 1996; Rauch et al. 2006). Existing research further

shows that each of these sub-dimensions may make unique contributions to the
levels of a firms entrepreneurial orientation. Research offers the unique contributions
that risk taking, innovation and proactiveness offer to the entrepreneurial process.
The basic premise underlying this argument is that each of these sub-dimensions of
entrepreneurial orientation may have a differential relationship with entrepreneurial
outcomes. For example risk taking has been 6shown to have a curvilinear
relationship with performance while innovation has a positive and direct relationship
with performance (Kreissor et al. 2002). Taken together this evidence suggests that
using aggregated measures of entrepreneurial orientation may conceal the true
nature of the relationship that exists between these sub-dimensions and
entrepreneurial outcomes. The sub-dimensions of entrepreneurial orientation may
vary independent of each other.

PART B
Q1. Define Quota. What are the various types of Quota?

Ans The core idea behind quota systems is to recruit women into political positions
and to ensure that women are not only a few tokens in political life.
This web site distinguishes between three types of gender quotas used in politics:
1.

Reserved seats (constitutional and/or legislative)

2.

Legal candidate quotas (constitutional and/or legislative)

3.

Political party quotas (voluntary)

These are the main quota types in use today. While reserved seats regulate the number of
women elected, the other two forms set a minimum for the share of women on the candidate
lists, either as a legal requirement (no. 2) or a measure written into the statutes of individual
political parties (no. 3). Our statistics are based on these three categories. There are however
many more types, as will be discussed below. Important is also, whether the rank order of
the candidates on the lists is regulated, so that women candidates are not just placed at the
bottom of the lists. Sanctions for non-compliance are also important to look at.
In some countries quotas apply to minorities based on regional, ethnic, linguistic or religious
cleavages. Almost all political systems apply some kind of geographical quotas to ensure a
minimum representation for densely populated areas, islands and the like. However this
database focuses on gender quotas - that is quotas that apply to women for elective office.
Quota systems aim at ensuring that women constitute at least a "critical minority"
of 30 or 40%.
Quotas for women entail that women must constitute a certain number or percentage of the
members of a body, whether it is a candidate list, a parliamentary assembly, a committee, or
a government. The quota system places the burden of recruitment not on the individual
woman, but on those who control the recruitment process. The core idea behind this system
is to recruit women into political positions and to ensure that women are not only a token few
in political life. Previous notions of having reserved seats for only one or for very few women,
representing a vague and all-embracing category of "women", are no longer considered
sufficient. Today, quota systems aim at ensuring that women constitute a large minority of
20, 30 or 40%, or even to ensure true gender balance of 50-50%. In some countries quotas
are applied as a temporary measure, that is to say, until the barriers for women's entry into

politics are removed, but most countries with quotas have not limited their use of quotas in
time.
Most quotas aim at increasing women's representation, because the problem to be addressed
usually is the under-representation of women - this is particularly relevant since women
usually constitute 50% of the population in any given country. An electoral gender quota
regulation may, for example, require that at least 40% of the candidates on the electoral lists
are women. A minimum requirement for women implies a maximum set for the
representation of men. Since women are the underrepresented group in political institutions
everywhere, most regulations aim at securing women a minimum of seats.
Some quota systems are, however, constructed as gender-neutral, which means that they
aim to correct the under-representation of both women and men or at any rate set up a
maximum for both sexes. In this case, the requirement may be that neither gender should
occupy more than 60% and no less that 40% of the seats.
A fifty-fifty quota is in its nature gender neutral, and it also sets a maximum for women's
representation, which a minimum requirement for women in fact does not.
The concept of "double quota" is sometimes used about a quota system that not only requires
a certain percentage of women on the electoral list, but also prevents that the women
candidates are just placed on the bottom of the list with little chance to be elected. Argentina
and Belgium are examples of countries with legal requirement of double quotas. "Placement
mandates" or rules about the rank order of candidates, especially at the top of the list, are
other terms for the same phenomena.

Different Quota Systems

There is however, some confusion about what constitutes different quota regimes. In the
book, Women, Quotas and Politics (Dahlerup, ed. 2006, p.19-21), a distinction is made
between two separate dimensions in the definition of quota systems: The first dimension
covers the questions who has mandated the quota system, while the second dimension
indicates what part of the selection and nomination process that the quota targets.
"If the leading party in a country uses a quota this may have a significant impact on
the overall rate of female representation."
As for the mandating, legal gender quotas are mandated either by the constitution (like in
Burkina Faso, Nepal, the Philippines and Uganda), or by the electoral law (as in many parts of
Latin America, as well as, for example, in Belgium, BosniaHerzegovina, Slovenia and
France. But quotas may also be decided for voluntarily by political parties
themselves, voluntary party quotas. In some countries, including Germany, Norway and
Sweden, a number of political parties have introduced quotas for their own lists. In many
others, though, only one or two parties have opted to use quotas. However, if the leading
party in a country uses a quota, such as the ANC in South Africa, this may have a significant
impact on the overall rate of female representation. Yet, even if gender quotas are
increasingly popular, most of the worlds political parties do not employ voluntary gender
quota at all.
Concerning the second dimension, quotas may target the first stage of the selection process,
the stage of finding aspirants, e.g. those willingly to be considered for nomination, either by a
primary or by the nominations committee and other parts of the party organization. Gender
quotas at this stage are rules that demand a certain number or percentage of women or
either sex be represented in the pool of candidates that are up for discussion. This has been
used in countries with plurality-majority electoral systems, like the controversial all-women
short lists used for some elections by the British Labour Party. In general, it is rather
complicated to construct a gender quota system that matches a majority system, but it is

possible (as for instance in India and Bangladesh at the local level and elections for the new
Scottish parliament).
The second stage is the actual nomination of candidates to be placed on the ballot by the
party. This frequently used quota system implies that a rule (legal or voluntary) is installed
according to which for instance 20, 30, 40 or even 50% of the candidates must be women.
This may as mentioned above be formulated in a gender-neutral way, stating that no sex
should have not less than for instance 40% and no more than 60.
At the third stage, those elected, we find quotas as reserved seats. Here it is decided that a
certain percentage or number among those elected must be women. Increasingly, gender
quotas are being introduced using reserved seat systems, and increasingly women elected on
reserved seats quota systems are not appointed, but elected like in Jordan, Uganda and
Rwanda.

Q2. What do you understand by International Marketing Research? And types of

International Marketing Research

Ans Marketing research is "the process or set of processes that links the consumers,
customers, and end users to the marketer through information information used to identify and
define marketing opportunities and problems; generate, refine, and evaluate marketing actions;
monitor marketing performance; and improve understanding of marketing as a process.
Marketing research specifies the information required to address these issues, designs the
method for collecting information, manages and implements the data collection process,
analyzes the results, and communicates the findings and their implications."
It is the systematic gathering, recording, and analysis of qualitative and quantitative data about
issues relating to marketing products and services. The goal of marketing research is to identify
and assess how changing elements of the marketing mix impacts customer behavior. The term is
commonly interchanged with market research; however, expert practitioners may wish to draw a
distinction, in that market research is concerned specifically withmarkets,
while marketing research is concerned specifically about marketing processes.
Marketing research is often partitioned into two sets of categorical pairs, either by target market:

Consumer marketing research, and

Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach:

Qualitative marketing research, and

Quantitative marketing research

Consumer marketing research is a form of applied sociology that concentrates on understanding

the preferences, attitudes, and behaviors of consumersin a market-based economy, and it aims
to understand the effects and comparative success of marketing campaigns. The field of
consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the
founding of the ACNielsen Company in 1923.[

Thus, marketing research may also be described as the systematic and objective identification,
collection, analysis, and dissemination of information for the purpose of assisting management in
decision making related to the identification and solution of problems and opportunities
in marketing.

Q3. The main objective of all business is survival .How does a product strategy help
in International business what are product design strategies
Ans Strategy is concerned with the actions an organization takes in order to survive and

prosper in its environment over the long-term. Strategy can exist at three levels in an
organization: corporate, business and functional. An organizations operations strategy
comprises the totality of the actions and decisions taken within the operations function. The
decisions and actions taken have a direct impact on an organizations business and corporate
strategy. An organizations operations can be a source of competitive advantage if they are
managed strategically in pursuit of a clear goal for operations. There are five possible
operations objectives (cost, quality, speed, dependability and flexibility). It is unlikely that
any operation can excel at all of these simultaneously, so competitive priorities must be
determined on which to base the operations strategy. The process of operations strategy
concerns the way in which an organization develops its operations strategy. This might be
top-down (i.e. formed in pursuit of its business and corporate strategy), bottom-up (i.e.
formed from the actions and decisions taken with operations), market-led (i.e. formed in
response to market requirements) or operations-led (based on the resources and capabilities
within its operations). The content of operation strategy consists of the key decision areas
concerned with the structure (i.e. the physical attributes of facilities, capacity, process
technology and supply network) and infrastructure (i.e. planning and control, quality,
organization, human resources, new product development and performance measurement) of
operations.
Facilities: the location, size and focus of operational resources. These decisions are
concerned with where to locate production facilities, how large each facility should be, what
goods or services should be produced at each location, what markets each facility should
serve, etc.
Capacity: the capacity of operations and their ability to respond to changes in customer
demand. These decisions are concerned with the use of facilities, for example through shift
patterns, working hours and staffing levels. Decisions about capacity will affect the
organizations ability to serve particular markets from a given location.
Process technology: the technology of the equipment used in operations processes. For
example, the degree of automation used, the configuration of equipment, and so on.
Supply network: the extent to which operations are conducted in-house or are outsourced.
Decisions about vertical integration are also concerned with the choice of suppliers, their
location, the extent of dependence on particular suppliers, and how relationships with
suppliers are managed. Structural decisions often involve major capital investment decisions,
which oncemade will set the direction of operations for many years to come. They invariably
impact the resources and capabilities of an organization, determining its potential future

output. It may be prohibitively expensive to change such decisions once implemented, and
hence these must be considered to be truly strategic decisions for the organization. It may be
much easier to change the organizations marketing strategy (e.g. its target markets, or its
promotional activities) than it is to change its operationsstrategy with respect to the structural
decision areas.
Infrastructure decision areas comprise:
Planning and Control: the systems used for planning and controlling operations.
Quality: quality management policies and practices.
Work Organization: organizational structures, responsibilities and accountabilities in
operations.
Human Resources: recruitment and selection, training and development, management style.
New Product Development: the systems and procedures used to develop and design new
products and services.
Performance Measurement: financial and non-financial performance management and its
linkage to recognition and reward systems.
Slack et al. (2004: p.67) argue that an operations strategy concerns the pattern of strategic
decisions and actions which set the role, objectives and activities of operations. Their use of
the term pattern implies a consistency in strategic decisions and actions over time. This
concept is consistent with management guru Henry Mintzbergs view of strategy as being a
pattern in a stream of actions (Mintzberg and Waters, 1985). Mintzberg sees strategy as
being realized through a combination of de liberate and emergent actions. An organization
can have an intended strategy, perhaps as a set of strategic plans. However, only some of this
intended strategy may be realized through deliberate strategy. Some of the intentions may be
unrealized. Strategies which take no regard of operational feasibility are likely to become
unrealized, remaining merely as a set of intentions. Strategy may also emerge from actions
taken within the organization, which over time form a consistent pattern. Actions of this kind
will, almost inevitably, arise from within the operations of the organization. So, whether
planned or otherwise, the organizations operations are bound to have a major impact on the
formation of organizational strategy. It is often believed that strategy is an issue that is
somehow separate from day-to- day organizational activities. Taken to extremes this can
result in strategy being regarded as some kind of cerebral activity performed by superior
beings who need to be removed from day-to-day operational pressures. Mintzberg is amongst
those who point to the dangers of managers becoming detached from the basics of the
enterprise. Mintzberg and Quinn (1991) call this the dont bore me with the operating
details; Im here to tackle the big issues syndrome.
Q4. What role does pricing play in International Business? Explain factors affecting
international pricing.

Ans The foreign exchange market (forex, FX, or currency market) is a global decentralized
market for the trading of currencies. The main participants in this market are the larger
international banks. Financial centers around the world function as anchors of trading between a
wide range of different types of buyers and sellers around the clock, with the exception of
weekends. Electronic Broking Services (EBS) and Reuters 3000 Xtra are two main interbank FX

trading platforms. The foreign exchange market determines the relative values of different
currencies.[1]
The foreign exchange market works through financial institutions, and it operates on several
levels. Behind the scenes banks turn to a smaller number of financial firms known as dealers,
who are actively involved in large quantities of foreign exchange trading. Most foreign exchange
dealers are banks, so this behind-the-scenes market is sometimes called the interbank market,
although a few insurance companies and other kinds of financial firms are involved. Trades
between foreign exchange dealers can be very large, involving hundreds of millions of dollars.
[citation needed]
Because of the sovereignty issue when involving two currencies, Forex has little (if
any) supervisory entity regulating its actions.
The foreign exchange market assists international trade and investment by enabling currency
conversion. For example, it permits a business in theUnited States to import goods from
the European Union member states, especially Eurozone members, and pay euros, even though
its income is inUnited States dollars. It also supports direct speculation in the value of currencies,
and the carry trade, speculation based on the interest rate differential between two currencies. [2]
In a typical foreign exchange transaction, a party purchases some quantity of one currency by
paying some quantity of another currency. The modern foreign exchange market began forming
during the 1970s after three decades of government restrictions on foreign exchange
transactions (the Bretton Woods system of monetary management established the rules for
commercial and financial relations among the world's major industrial states after World War II),
when countries gradually switched to floating exchange rates from the previous exchange rate
regime, which remained fixed as per theBretton Woods system.
The foreign exchange market is unique because of the following characteristics:

its huge trading volume representing the largest asset class in the world leading to
high liquidity;

its geographical dispersion;

its continuous operation: 24 hours a day except weekends, i.e., trading from
20:15 GMT on Sunday until 22:00 GMT Friday;

the variety of factors that affect exchange rates;

the low margins of relative profit compared with other markets of fixed income; and

the use of leverage to enhance profit and loss margins and with respect to account size.

As such, it has been referred to as the market closest to the ideal of perfect competition,
notwithstanding currency intervention by central banks.
According to the Bank for International Settlements,[3] the preliminary global results from the 2013
Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity show
that trading in foreign exchange markets averaged $5.3 trillion per day in April 2013. This is up

from $4.0 trillion in April 2010 and $3.3 trillion in April 2007. FX swaps were the most actively
traded instruments in April 2013, at $2.2 trillion per day, followed by spot trading at $2.0 trillion.
According to the Bank for International Settlements, [4] as of April 2010, average daily turnover in
global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20%
over the $3.21 trillion daily volume as of April 2007. Some firms specializing on foreign exchange
market had put the average daily turnover in excess of US$4 trillion.

Q5. Channel selections depend on distribution structure and choice of specific

channel members. Elaborate with suitable examples
Ans The third research question concerns how the channel management of an international
distribution channel can be described. In order to answer our third research question we will
use five main issues in channel management that Jobber (2001) describes. Amongst others
Cavusgil et al (1995) and Mallen (1996) are researchers that have used this theory in their
work regarding the channel management of international distribution channels. According to
Kotler and Armstrong (1999) channel management is about choosing and motivating the
intermediaries and to evaluate their achievements. Jobber (2001) further complements with
the issues of training and managing conflicts between producer and intermediaries. The
main issues in conflict management to consider are; selection, motivation, training,
evaluation and managing conflict.
Selection is an important issue when managing distribution channels (Jobber, 2001). It has
already been discussed in the previous section (3.2.2.) but there are certain parts of it that
have not been explained yet. There are especially four aspects included in this issue:
Outlining of contract
Duration of contract
Content in contract
Lawyer present
Motivation is important in order for channel members to agree to act as an intermediary, and
allocate sufficient commitment and resources to the lines of the producer. The key to
effective motivation is to understand the needs and problems of intermediaries since needs
and motivators are linked. (Jobber, 2001) Motivation consists of the following issues
according to
Cooper (1997), Jain (1996) and Kotler and Armstrong (1999) amongst others:
Motivating factors
Goals
Communication
Communication frequency
Relations
Training can make the distribution more effective, by handling human resources in the best
way according to Cooper (1997). To handle human resources effectively, might contribute to
quality improvement. The exporting company might increase its policy to give the end
consumers quality and top service, by involving the intermediary in the quality work of the
exporting company. (Gattorna, 1990) There are mainly two issues to considerconcerning
training according to Sderman (1989), Alonzo (1999) and Holmvall (1995):
Active training of intermediaries
Information exchange between the exporting company and the intermediary
Evaluation of channel members has an important bearing on intermediary retention, training
and motivation decisions. It provides the information necessary to decide which channel
members to continue collaboration with and which channel members to cancel the
collaboration with. (Jobber, 2001)

PART C

Q1. Adopting the right kind of promotional strategies is the most crucial issue of
entering markets in many countries. Discuss

Ans Globalization of Markets and Competition: Trade is increasingly global in

scope today. There are several reasons for this. One significant reason is
technologicalbecause of improved transportation and communication
opportunities today, trade is now more practical. Thus, consumers and
businesses now have access to the very best products from many different
countries. Increasingly rapid technology lifecycles also increases the
competition among countries as to who can produce the newest in technology.
In part to accommodate these realities, countries in the last several decades
have taken increasing steps to promote global trade through agreements such
as the General Treaty on Trade and Tariffs, and trade organizations such as the
World Trade Organization (WTO), North American Free Trade Agreement
(NAFTA), and the European Union (EU).

Stages in the International Involvement of a Firm. We discussed several stages

through which a firm may go as it becomes increasingly involved across borders.
A purely domestic firm focuses only on its home market, has no current
ambitions of expanding abroad, and does not perceive any significant
competitive threat from abroad. Such a firm may eventually get some orders
from abroad, which are seen either as an irritation (for small orders, there may
be a great deal of effort and cost involved in obtaining relatively modest
revenue) or as "icing on the cake." As the firm begins to export more, it enters
the export stage, where little effort is made to market the product abroad,
although an increasing number of foreign orders are filled. In the international
stage, as certain country markets begin to appear especially attractive with
more foreign orders originating there, the firm may go into countries on an ad
hoc basisthat is, each country may be entered sequentially, but with
relatively little learning and marketing efforts being shared across countries. In
the multi-national stage, some efficiencies are pursued by standardizing across
a region (e.g., Central America, West Africa, or Northern Europe). Finally, in
the global stage, the focus centers on the entire World market, with decisions
made optimize the products position across marketsthe home country is no
longer the center of the product. An example of a truly global company is Coca
Cola.
Note that these stages represent points on a continuum from a purely domestic
orientation to a truly global one; companies may fall in between these discrete
stages, and different parts of the firm may have characteristics of various
stagesfor example, the pickup truck division of an auto-manufacturer may be
largely domestically focused, while the passenger car division is globally
focused. Although a global focus is generally appropriate for most large firms,

note that it may not be ideal for all companies to pursue the global stage. For
example, manufacturers of ice cubes may do well as domestic, or even locally
centered, firms.
Some forces in international trade. The text contains a rather long-winded
appendix discussing some relatively simple ideas. Comparative advantage,
discussed in more detail in the economics notes, suggests trade between
countries is beneficial because these countries differ in their relative economic
strengthssome have more advanced technology and some have lower costs.
The International Product Life Cycle suggests that countries will differ in their
timing of the demand for various products. Products tend to be adopted more
quickly in the United States and Japan, for example, so once the demand for a
product (say, VCRs) is in the decline in these markets, an increasing market
potential might exist in other countries (e.g., Europe and the rest of Asia).
Internalization/transaction costs refers to the fact that developing certain very
large scale projects, such as an automobile intended for the World market, may
entail such large costs that these must be spread over several countries.

Economics of International Trade

Exchange rates come in two forms:
Floatinghere, currencies are set on the open market based on the
supply of and demand for each currency. For example, all other things
being equal, if the U.S. imports more from Japan than it exports there,
there will be less demand for U.S. dollars (they are not desired for
purchasing goods) and more demand for Japanese yenthus, the price of
the yen, in dollars, will increase, so you will get fewer yen for a dollar.
Fixedcurrencies may be pegged to another currency (e.g., the
Argentine currency is guaranteed in terms of a dollar value), to a
composite of currencies (i.e., to avoid making the currency dependent
entirely on the U.S. dollar, the value might be 0.25*U.S. dollar+4*Mexican
peso+50*Japanese yen+0.2*German mark+0.1*British pound), or to some
other valuable such as gold. Note that it is very difficult to maintain
these fixed exchange ratesgovernments must buy or sell currency on
the open market when currencies go outside the accepted ranges. Fixed
exchange rates, although they produce stability and predictability, tend
to get in the way of market forcesif a currency is kept artificially low, a
country will tend to export too much and import too little.
Q2. Outline major issues in the New Export Import Policy in force

Ans Trade can be a key factor in economic development. The prudent use of trade can boost a
country's development and create absolute gains for the trading partners involved. Trade has
been touted as an important tool in the path to development by prominent economists. However
trade may not be a panacea for development as important questions surrounding how free free
trade really is and the harm trade can cause to domestic infant industries come into play. Market
access to developed countries[edit]
The issue of market access to high-income countries is a thorny but crucial one. The issues fall
into three main groups: first, those relating to deliberately imposed barriers to trade, such
astariffs, quotas, and tariff escalation. Second, barriers to trade resulting from domestic and
external producer support, primarily in the form of subsidies, but also including, for example,
export credits. Third, those relating to indirect barriers to trade resulting from developing
countries lack of institutional capacity to engage in the global economy and in multilateral
institutions (e.g., theWorld Trade Organization) on equal terms.

Barriers to trade[edit]

High tariffs are imposed on agriculture: in high-income countries, the average tariff rate
on agriculture is almost double the tariff for manufactures. And more than one third of the
European Union's agricultural tariff lines, for instance, carry duties above 15% [1]. Tariff
peaks within agriculture occur most frequently on processed products and temperate
commodities, rather than the major export crops of least developed countries (unprocessed
fruits and vegetables and tropical commodities). However, many developing countries in
temperate zones have the potential of competing as lower-cost producers in temperate
commodities. Thus liberalization could open up new development-through-trade possibilities.

Strong tariff escalation is typically imposed on agricultural and food products by highincome countries. This strongly discourages the development of high value added exports,
and hindersdiversification in particular as well as development in general. In high-income
countries, tariffs on agricultural products escalate steeply, especially in the EU and Japan.

Complex tariffs make it more difficult for developing country exporters to access
industrialised-country markets because of the disadvantages developing countries face in
accessing, and in their capacity to process, information. Not only are price signals distorted,
they are often unclear, subject to change (for example seasonally) and difficult to
interpret. [2]

Tariff-rate quotas (TRQs), introduced by the Uruguay Round with the aim of securing a
minimum level of market access, have performed poorly. Average fill rates have been low
and declining, from 67% in 1995 to 63% in 1998, with about a quarter of TRQs filled to less
than 20%. The low fill rate may reflect high in-quota rates. Overall, the UR tariffication
process which produced them has not resulted in the increased market access developing
countries hoped for.

Producer support[edit]

Support to agricultural producers remains sizable, at about five times the level of
international development assistance - $245 billion in 2000. Total support to agriculture, as
defined by the OECD, reaches $327 billion - 1.3% of OECD countries GDP. To some extent
these can be justified by multifunctionality arguments, but it remains a priority to find means
of support which effectively meet the primary objectives without the negative developmental
and environmental consequences that have been seen in the past.

The dumping of unwanted production surpluses onto the world market through export
subsidies has depressed prices for many temperate agricultural commodities, with EU
surpluses of exportable wheat a prime example. (Despite several Common Agricultural
Policy reforms, domestic support for wheat - as measured by OECD producer support
estimates - declined only marginally from an average 52% of gross farm receipts in 1986-88,
to around 48% in 1998-2000. [3]) The URAA has been relatively unsuccessful in disciplining
export subsidies, with the proportion of subsidised exports in total exports increasing in many
products of export interest for developing countries: for example for wheat, from 7% in 1995
to 25% in 1998. The cost to developing country production and exports is considerable, and
only partially offset by the lower food prices available to NFIDC consumers. This form of
transfer from high-income country taxpayers to low-income consumers is in any case rather
inefficient, and the lower prices may harm production for local consumption even in NFIDCs.
Agricultural reform as a whole, including the removal of export subsidies, would only result in
quite small price rises for developing-country consumers.

The counter-cyclical nature of producer support is also harmful to developing-country

producers. High-income farmers are insulated from changes in world prices, making
production less responsive to swings in demand. As a result, world commodity prices are
more volatile, and the burden of adjustment falls disproportionately on developing-country
producers.

Lack of capacity
This includes non-tariff barriers such as food regulations and standards, which developing
countries are often not (or not effectively) involved in setting, and which may be deliberately used
to reduce competition from developing countries. In any case, the lack of capacity to meet
implement regulations and ensure compliance with standards constitutes a barrier to trade, and
must be met by increasing that capacity.
Researchers at the Overseas Development Institute have identified many capacity related issues
that developing economies face aside from tariff barriers:
1. Traders and potential traders must know about an agreement and its details, however,
the interests and skills of good producers lie in production and not in legal rules, only the
largest firms can afford policy advisers.
2. Markets and suppliers must share information - producer associations, industrial
organisations, and chambers of commerce exchange information among their members

and this information exchange must then take place across borders (as seen between
Brazil and Argentina after Mercosur).
3. A successful agreement must be flexible and governments need to accept that it will
need to evolve.
4. Trade agreements must generate relevant reforms in areas such as customs
documentation, but also more fundamentally in relaxing rules for cross-border
transportation.
5. Selling to new markets requires adequate finance.
6. Poor or wrong infrastructure can restrict trade
7. Governments can support producers or traders in other ways.
The benefits of trade agreements for developing countries are not automatic, especially for SMEs
whether or not they are already exporting as the costs of entering a new market are greater for
them than for large companies when compared to their potential revenue.

Q3. Define a letter of credit .What are the contents of letter of credit

Ans A letter of credit is a document issued by a financial institution, or a similar party, assuring
payment to a seller of goods and/or services provided certain documents have been presented
to the bank.[1] These are documents that prove that the seller has performed the duties under an
underlying contract (e.g., sale of goods contract) and the goods (or services) have been supplied
as agreed. In return for these documents, the beneficiary receives payment from the financial
institution that issued the letter of credit. The letter of credit serves as a guarantee to the seller
that it will be paid regardless of whether the buyer ultimately fails to pay. In this way, the risk that
the buyer will fail to pay is transferred from the seller to the letter of credit's issuer. The letter of
credit can also be used to ensure that all the agreed upon standards and quality of goods are
met by the supplier, provided that these requirements are reflected in the documents described
in the letter of credit.
Letters of credit are used primarily in international trade for transactions between a supplier in
one country and a customer in another. Most letters of credit are governed by rules promulgated
by the International Chamber of Commerce known as Uniform Customs and Practice for
Documentary Credits(UCP 600 being the latest version). They are also used in the land
development process to ensure that approved public facilities (streets, sidewalks, storm water
ponds, etc.) will be built. The parties to a letter of credit are the supplier, usually called
the beneficiary, the issuing bank, of whom the buyer is a client, and sometimes an advising
bank, of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot
be amended or canceled without the consent of the beneficiary, issuing bank, and confirming
bank, if any. In executing a transaction, letters of credit incorporate functions common
to giros and traveler's cheques.

To receive payment, an exporter or shipper must present the documents required by the letter of
credit. Typically, the payee presents a document proving the goods were sent instead of showing
the actual goods. The Original Bill of Lading (BOL) is normally the document accepted by banks
as proof that goods have been shipped. However, the list and form of documents is open to
negotiation and might contain requirements to present documents issued by a neutral third party
evidencing the quality of the goods shipped, or their place of origin or place. Typical types of
documents in such contracts might include:[citation needed]

Financial Documents
Bill of Exchange, Co-accepted Draft

Commercial Documents
Invoice, Packing list

Shipping Documents

Transport Document, Insurance Certificate, Commercial, Official or Legal Documents

Official Documents

License, Embassy legalization, Origin Certificate, Inspection Certificate, Phytosanitary

certificate

Transport Documents

Bill of lading (ocean or multi-modal or Charter party), Airway bill, Lorry/truck receipt,
railway receipt, CMC Other than Mate Receipt, Forwarder Cargo Receipt, Deliver
Challan...etc

Insurance documents

Insurance policy, or Certificate but not a cover note.

Insurance documents

Different types of letters of credit

Import/export Letter of Credit

The same credit can be termed as import and export LC depending on whose perspective it is
being looked upon. For the importer it is termed as Import LC and for the Exporter of goods,
Export LC>

Revocable Letter of Credit

In this type of credit, buyer and the bank which has established the LC, are able to manipulate
the letter of credits or make any kinds of corrections without informing the seller and getting
permissions from him. According to UCP 600, all LCs are Irrevocable, hence this type of LC used
no more.

Irrevocable LC

In this type of LC, Any changes (amendment) or cancellation of the LC (except it is expired) is
done by the Applicant through the issuing Bank. It must be authenticated by the Beneficiary of
the LC. Whether to accept or reject the changes, depends on the beneficiary.

Confirmed LC

An LC is said to be confirmed when another bank adds its additional confirmation (or guarantee)
to honor a complying presentation at the request or authorization of the issuing bank.

Unconfirmed LC

This type of letter of credit, does not acquire the other bank's confirmation.

Transferrable LC

A Transferable Credit is the one under which the exporter has the right to make the credit
available to one or more subsequent beneficiaries. Credits are made transferable when the
original beneficiary is a middleman and does not supply the merchandise himself but procures
goods from the suppliers and arrange them to be sent to the buyer and does not want the buyer
and supplier know each other. The middleman is entitled to substitute his own invoice for the one
of the supplier and acquire the difference as his profit in transferable letter of credit mechanism.
Important Points of Consideration:
A letter of credit can be transferred to the second beneficiary at the request of the first beneficiary
only if it expressly states that the letter of credit is "transferable". A bank is not obligated to
transfer a credit.
A transferable letter of credit can be transferred to more than one second beneficiary as long as
credit allows partial shipments.
The terms and conditions of the original credit must be indicated exactly in the transferred credit.
However, in order to keep the workability of the transferable letter of credit below figures can be
reduced or curtailed.
Letter of credit amount any unit price of the merchandise (if stated) the expiry date the
presentation period or the latest shipment date or given period for shipment.
The first beneficiary may demand from the transferring bank to substitute his name for that of the
applicant. However, if a document other than invoice required in the transferable credit must be
issued in a way to show the applicant's name, in such a case that requirement must be indicated
in the transferred credit.
Transferred credit cannot be transferred once again to any third beneficiary according to the
request of the second beneficiary.

Untransferable LC

It is said to the credit that seller cannot give a part or completely right of assigned credit to
somebody or to the persons he wants. In international commerce, it is required that the credit will
be untransferable.

Deferred / Usance LC

It is kind of credit that won't be paid and assigned immediately after checking the valid
documents but paying and assigning it requires an indicated duration which is accepted by both
of the buyer and seller. In reality, seller will give an opportunity to the buyerto pay the required
money after taking the related goods and selling them.

At Sight LC

It is a kind of credit that the announcer bank after observing the carriage documents from the
seller and checking all the documents immediately pays the required money.

Red Clause LC

In this kind of credit assignment, the seller before sending the products, can take the pre-paid or
part of the money from the bank. The first part of the credit is to attract the attention of the
acceptor bank. The reasoning behind this, is the first time this credit is established by the
assigner bank, it is to gain the attention of the offered bank. The terms and conditions were
written by red ink, going forward it became famous with that name.

Back to Back LC

This type of LC consists of two separated and different types of LC. First one is established in the
benefit of the seller that is not able to provide the corresponding goods for any reasons. Because
of that reason according to the credit which is opened for him, neither credit will be opened for
another seller to provide the desired goods and sends it.
Back-to-back L/C is a type of L/C issued in case of intermediary trade. Intermediate companies
such as trading houses are sometimes required to open L/Cs by supplier and receive Export
L/Cs from buyer. SMBC will issue a L/C for the intermediary company which is secured by the
Export L/C (Master L/C). This L/C is called "Back-to-back L/C"

Q4. Explain in detail the procedure of conducting a export transaction

Ans Determining

the Appropriate Methods of Payment

There are several methods of payment in common use by firms engaged in international trade. The
selection of a method of payment involves a trade-off between credit risk exposure for the seller
versus issues of cost and convenience for the buyer. The five principal methods include:

Cash in Advance which imposes the greatest burden on the buyer but poses the least risk
to the exporter.

Letter of Credit where the buyer has to shoulder the expense of opening a letter of credit,
however the exporter is assured of payment upon accurate presentation of the requisite
documents to the guarantor bank.

Documentary Collection or Draft where the buyer provides a cash payment or a written
promise to pay at a specified future date when the requisite documents are presented. The
risk to the exporter is increased, however the buyer does not have to incur the expenses
associated with a letter of credit.

Open Account which poses the greatest risk to the exporter and therefore should be
offered only to regular customers who have demonstrated a good payment record, unless
credit insurance or factoring is utilized.

Alternative Payment Mechanisms including countertrade and consignment sales.

Documentation, Shipping, and Logistics

Shipping product overseas involves a number of different parties (e.g. freight forwarders, shipping
companies, customs, etc.) as well as specific requirements for packing, labeling, documentation, and
licensing. Many companies outsource the responsibility to freight forwarders and other trade service
providers for coordinating the shipments and meeting these various requirements. However, it is still
important to fully understand the various considerations (including costs and risks) in order to avoid
unnecessary delays and ensure that the associated expenses are incorporated into the invoice price
of the products shipped.
Transportation Options:
When determining the mode to be used in international shipping, the importer/exporter should
consider the total logistics cost, not simply the least costly transportation option. Included in the
decision should be consideration of pipeline inventory costs, damage risks, perishability of the
product, value of the shipment, customer delivery requirements, and accessibility of the destination for
the transportation mode being considered.
Although air carriers are more expensive from a narrow transportation cost measurement, their cost
may be offset by lower domestic shipping expenses or reduced inventory carrying costs.
Ocean transport is cheaper but slower, and requires further transportation arrangements should the
goods be bound for an inland destination.
Before shipment, the exporter should confirm the destination of the goods with the foreign buyer.
Buyers often wish the goods to be shipped to a free-trade zone or a free port, where goods are
exempt from import duties.

Intermodal transportation is a term for the movement of goods in a unit load device that is handled
across multiple modes of transportation. Intermodal allows for door-to-door transportation without
breaking down or reloading a shipment, thus providing more efficient and safer movement and
processing of cargo. The intermodal industry is characterized by cooperative agreements across
multiple transport modes, such as ocean-rail-truck and air-truck.
International Support Services:
Due to the variety of considerations involved in the physical import/export process, most importers
and exporters, new and experienced, rely on a variety of support services in conducting international
transportation and distribution activities.
The international freight forwarder acts as an agent for the importer or exporter in moving cargo to the
overseas destination. These agents are familiar with the import rules and regulations of foreign
countries, methods of shipping, U.S. government export regulations, and the documents connected
with foreign trade.
Another facilitating party in international business transactions is the customshouse broker. A
customshouse broker is licensed by the local customs service and represents clients in conducting
import entry transactions, including preparation of paperwork, advice on relevant duties and taxes,
and arrangement for shipment release and customs payments.
The central examination station, or CES, is a site that is contracted by US Customs and provides for
intensive customs examinations of imported cargo.
The container freight station, or CFS, is a bonded facility that allows for the processing of imported
airline and ocean containers for customs clearance.
A Non-Vessel Operating Common Carrier or NVOCC, is a firm that does not own or lease ocean
vessels, but is licensed to consolidate shipments into containers. An NVOCC sets their own rates and
issues their own bills of lading.
Trade Documentation:
Documentation is an important element of the import/export process and is primarily driven by the
requirements of exporter's and importer's governments. However, trade documentation is also needed
to support financial aspects of the transaction, such as the insurance of the shipment and collection of
payment from the importer or his bank. The following documents are commonly used in exporting,
although which are actually used in each case depends on the requirements of both the governments
involved.

Commercial Invoice As in a domestic transaction, the commercial invoice is a bill for the
goods from the seller to the buyer. A commercial invoice should include basic information
about the transaction, including a description of the goods, the address of the shipper and
seller and the delivery and payment terms. The buyer requires the invoice to prove ownership
and to arrange payment. Some governments use the commercial invoice to assess customs
duties.

Bill of Lading Bills of lading are contracts between the owner of the goods and the
transportation provider.

Certificate of Origin Certain nations require a signed statement as to the origin of the
export item.

Inspection Certification Some purchasers and countries may require a certificate of

inspection attesting to the specifications of the goods shipped, usually performed by a third
party.

Dock Receipt and Warehouse Receipt These receipts are used to transfer accountability
when the export item is moved by the domestic carrier to the port of embarkation and left with
the international carrier for export.

Q5. Explain the major commercial documents used in export transaction

Ans Documents related to goods

Export invoice: Export invoice is a sellers' bill for merchandise and contains information
about goods such as quantity, total value, number of packages, marks on packing, port of
destination, name of ship, bill of lading number, terms of delivery and payments, etc.
Packing list: A packing list is a statement of the number of cases or packs and the details of
the goods contained in these packs. It gives details of the nature of goods which are being
exported and the form in which these are being sent.
Certificate of origin: This is a certificate which specifies the country in which the goods are
being produced. This certificate entitles the importer to claim tariff concessions or other
exemptions such as non-applicability of quota restrictions on goods originating from certain
pre-specified countries. This certificate is also required when there is a ban on imports of
certain goods from select countries. The goods are allowed to be brought into the importing
country if these are not originating from the banned countries.
Certificate of inspection: For ensuring quality, the government has made it compulsory for
certain products that these be inspected by some authorised agency. Export Inspection
Council of India (EICI) is one such agency which carries out such inspections and issues the
certificate that the consignment has been inspected as required under the Export (Quality
Control and Inspection) Act, 1963, and satisfies the conditions relating to quality control and
inspection as applicable to it, and is export worthy. Some countries have made this
certificate mandatory for the goods being imported to their countries.

Solido lot of 7 1972 Diecast Toys Catalogue Collectors Guide Export 24 23 Pages
Current Bid: $7.65

Documents related to shipment

Mate's receipt: This receipt is given by the commanding officer of the ship to the exporter
after the cargo is loaded on the ship. The mate's receipt indicates the name of the vessel,
berth, date of shipment, description of packages, marks and numbers, condition of the cargo
at the time of receipt on board the ship, etc. The shipping company does not issue the bill of
lading unless it receives the mate's receipt.
Shipping Bill: The shipping bill is the main document on the basis of which customs office
grants permission for the export. The shipping bill contains particulars of the goods being
exported, the name of the vessel, the port at which goods are to be discharged, country of
final destination, exporter's name and address, etc.
Bill of lading: Bill of lading is a document wherein a shipping company gives its official
receipt of the goods put on board its vessel and at the same time gives an undertaking to
carry them to the port of destination. It is also a document of title to the goods and as such is
freely transferable by the endorsement and delivery.
Airway Bill: Like a bill of lading, an airway bill is a document wherein an airline company
gives its official receipt of the goods on board its aircraft and at the same time gives an
undertaking to carry them to the port of destination. It is also a document of title to the goods
and as such is freely transferable by the endorsement and delivery.
Marine insurance policy: It is a certificate of insurance contract whereby the insurance
company agrees in consideration of a payment called premium to indemnify the insured
against loss incurred by the latter in respect of goods exposed to perils of the sea.
Cart ticket: A cart ticket is also known as a cart chit, vehicle or gate pass. It is prepared by
the exporter and includes details of the export cargo in terms of the shipper's name, number
of packages, shipping bill number, port of destination and the number of the vehicle carrying
the cargo.

Documents related to payment

Letter of credit: A letter of credit is a guarantee issued by the importer's bank that it will
honour up to a certain amount the payment of export bills to the bank of the exporter. Letter
of credit is the most appropriate and secure method of payment adopted to settle
international transactions
Bill of exchange: It is a written instrument whereby the person issuing the instrument
directs the other party to pay a specified amount to a certain person or the bearer of the
instrument. In the context of an export-import transaction, bill of exchange is drawn by
exporter on the importer asking the latter to pay a certain amount to a certain person or the
bearer of the bill of exchange. The documents giving title to the export consignment are
passed on to the importer only when the importer accepts the order contained in the bill of
exchange.
Bank certificate of payment: Bank certificate of payment is a certificate that the necessary
documents (including bill of exchange) relating to the particular export consignment has
been negotiated (i.e., presented to the importer for payment) and the payment has been
received in accordance with the exchange control regulations.

CASE STUDY - I
QUESTIONS
Q1. Is an initiative like the VIT the right approach in helping vendors improve their
processes andtheir output? Should it be linked to the vendor's strategy? Or to the
original equipmentmanufacturers strategy?
Ans Actually, the whole objective of the VIT is to conduct a short-term programme--10 weeks, to
be precise--and to leave it to the vendor to continue with it. You could think of it as a supplement
to our official Vendor Development Programme. So, while the overall goal of our partnership
programme with our suppliers is joint product development, supervisory training, and strategic
planning, the VIT is focused on the shopfloor. You know, manufacturing techniques and that kind
of thing
Q2. Should something like the VIT be pursued continuously, or as a one-off
programme? Should its coverage be extended to. include non-manufacturing
activities? Should it now be improved,or discarded? or should it be integrated into
Indo-Nichitas regular vendor-developmentstrategy ?
Ans Arnab, we're doing this not just for ourselves. Nichita, our Japanese partner, is also using
our efforts as a laboratory. If we're successful, they'll ask their companies in other countries to
use the same method. If you ask me why they started with us, it is, probably, because our
supplier-base is pretty undeveloped. So, it is a good testing-ground for a new system. In fact, that
is why they took special care to train 2 of our engineers for 9 weeks, so that they could then
come and train our vendors in Japanese systems. But we weren't sure if it would work. So, we
did not build the VIT into the other programme. We started out carefully too. We picked--handpicked, I must add--10 of the medium-sized vendors out of our 128 suppliers to try out the VIT

CASE STUDY-II

QUESTIONS

Q1. Why has the crash of dotcoms and the economic slowdown in the US hit India's software
firms badly ?

Ans

The fear of a recession looms over the United States. And as the cliche goes,

whenever the US sneezes, the world catches a cold. This is evident from the way
the Indian markets crashed taking a cue from a probable recession in the US and
a global economic slowdown.
Weakening of the American economy is bad news, not just for India, but for the
rest of the world too. A recession is a decline in a country's gross domestic
product (GDP) growth for two or more consecutive quarters of a year. A recession
is also preceded by several quarters of slowing down.
Q2. How can Wipro help in leveraging Daksh and EXL?
Ans india is a popular choice for customers seeking outsourced services because it is able to

offer a 24 7 service and reduction in turnaround times by leveraging time zone differences. In
certain Remote Services categories, Indian players have achieved high productivity levels with
the emergence of BPO vendors with deep process skills and the ability to offer integrated
outsourcing solutions. At the core of India's great attraction as the outsourcing destination is its
unbeatable value proposition - PQR (Productivity, Quality and Rate) factor.
The increase in capacity was equally divided between captive centres (subsidiaries of
multinationals such as HSBC, Standard Chartered, AOL, Dell, Hewlett Packard) and Indian third
party providers such as Daksh, Wipro Spectramind, EXL, MsourcE, among others.
Offshoring to India has three advantages - significant cost savings, major productivity gains and
dramatic improvements in quality. While traditionally the key driver for ITES-BPO activities has
been cost reduction, companies are increasing viewing these services as strategic and essential
elements for organic growth.
Q3. Can Wipro fulfil the BPO requirements for Spectramind, which can feature as a natural
choice of a vendor?
Ans As IT and BPO converge to shape the future of outsourcing, businesses must make the best use of
technology tools to run their multichannel service organisations. The surge in technology enablement
has significantly improved business processes, when outsourced. It helps solve business problems and
enables efficient outsourcing.
It also delivers real benefits to customers, including:

Cost
benefits
and
efficiencies
Customers are clearer on expectations from BPO, making outsourcing benefits less elusive
Global footprint expansion to provide cost flexibility and meet regional language needs
Data-driven, smart analytics-based decision making, replacing traditional dashboards
Customers now demand business transformation and are confident of receiving it from their service
providers.