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International trade requires macroeconomic stability in the host country. Ideally, the economy of the host country should embark upon a sustainable growth path to foster foreign investment and international trade opportunities, while supported by a strong banking system. However, there are several business risks that a firm launching onto a foreign country should assess.

The first risk assessment should be associated to the bargaining power of the firm expanding to a foreign market. Factors such as product/ service uniqueness, technological advancement, the firm’s size and operational growth assist the effective management of distribution channels, while maintaining product or service quality.

At the same time, the bargaining power of the host country is equally substantial to profitable international operations in terms of the size of the market, its wealth, the abundance in its raw materials and the level of governmental intervention.

Other risks associated to international trade are:

Customer Risk

Customer risk investigates the indistinguishability of customers in the host country. By assessing customer risk, the firm inspects if customers are legally established businesses in the host country or importers, if the firms’ exports are compatible with the customers’ business profile, what are the customers’ credit limits and period, their trading history, their paying credibility and solvency.

Credit Risk

Credit risk is associated with the customers’ solvency but also the firm’s business cycle. To assess this type of risk, the firm needs to take into consideration the amount of credit outstanding – both overseas and domestic – in the trading accounts, the impact of a customer’s financial pitfall of the firm, the maximum amount of credit which should not be exceeded, and most importantly how to finance the offered credit period. Having adequate cash to grant offering credit terms in export income is a substantial part of the firm’s business circle.

Foreign Exchange Risk

Foreign exchange risk is associated with dealing in the host country in more than one currency. This type of international trade risk typically affects export and import businesses as they are exposed to fluctuations in the foreign exchange markets. If money

is converted to another currency in order to make a payment to the host country, then any changes in the currency exchange rate will cause that money’s value to either decrease or increase when the payment is being prefabricated and currency is converted back into the original currency.

Political Risk

Political risk measures the variability in the value of the firm, caused by uncertainty about political changes. In the era of globalization, host countries might be covering rigid legislative, judiciary and governmental institutions, unfavourable to international operations from foreign firms. Moreover, dictatorships, bribery, corruption and unstable governments are, in many cases, substantial reasons for assessing the political risk involved in a firm’s launching onto a foreign country.

Moreover, political risk in the host country is often not correlated with global economic conditions thus eliminating the possibility of global intervention. Ideally, the firm’s cash flows should be invested in different host countries. Yet, in the absence of global intervention, the firm’s cash flows do not grant risk diversification.

Country Risk

Closely related to the political risk factor, country risk is affected by the legislative, judiciary and governmental institutions, the current statement deficit, the level of national debt, the foreign exchange reserves, the internal or external threats to the host country and the imposition of tariff or other quotas, and import or export restrictions. It might also include the risk of physical climactic catastrophes such as flood, drought, and earthquake.

Beyond doubt, doing business in a foreign country entails major business risks. The key is to assess these risks properly in order to eliminate the unfortunate bourgeois in the firm’s global operations, but also to be prepared to expect the cost of such a failure.

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International Trade Management

Which are the basic information you should have

if you are to be an effective International Trade Manager

in an exporting firm ?

What is International Trade ?

            International trade can be defined as either the buying (importing) or selling (exporting) of goods or services on a global basis.

            Thanks in great measure to the Internet, many starting businesses can enrich their prospects of success by incorporating IT into their overall business plan. In some cases, a business can be enhanced by incorporating IT marketing to supplement a domestic operation. In other cases, a business can depend solely on international trade.

Let’s review some examples:

Exporting
            Quality Naturally Foods, (say) ABC Inc ( say) ., in the City of Industry, manufactures prepared bakery mixes for its sister companies Yum Yum Donuts and Winchell Donuts. These and similar mixes are now sold to outlets in India. The added volume has reduced costs of production which has benefited all customers.

            Assume that the xyz.com, the preeminent online marketer (and inspiration for thousands of online entrepreneurs) has a home page toolbar called “International”. The company xyz says: “Around the World, wherever you are, get what you want—fast—from our family of Web sites.”

Importing
            Good Tables, Inc.of Indian company , formerly manufactured furniture in its plant but was losing income due to cheaper foreign prefabricated products. The manufacturing was moved to another place in a “maquiladoras” factory.

Funrise, Inc. Grassland Hills, India, has become a world leading marketer of toys. Design, packaging and production are outsourced, primary to vendors in China.

Hollow Corporations

            International trade is especially appropriate for the rapidly growing number of “hollow corporations.” Session one of this course refers to a hollow corporation as a business without a works and with a minimum number of employees in which manufacturing is performed by outside suppliers. A hollow corporation might depend on outside suppliers for virtually all of its products, such as an American toy company importing product from China. Or, it might depend on outside suppliers for selected components in its overall product line, such as The Boeing Company. (Boeing is using Asian firms for components of the new 787 airliner.)

Advantages and Disadvantages of International Trade

Advantages to think about :

Enhance our domestic competitiveness

Increase income and profits

Gain our global market share

Reduce dependence on existing markets

Exploit international trade technology

Extend income potential of existing products

Stabilize seasonal market fluctuations

Enhance potential for expansion of your business

Sell excess production capacity

Maintain cost competitiveness in your domestic market

Disadvantages to keep in mind:

We might need to move for long-term gains

Hire staff to launch international trading

Alter your product or packaging

Develop new promotional material

Incur added administrative costs

Dedicate organisation for traveling

Wait long for payments

Apply for additional financing

Deal with special licenses and regulations

Top Ten Do’s and Don’ts

TOP TEN DO’S

We should take international trade classes at the college level.

Visit trade shows and trade missions. See http://www.tsnn.com.

Join an international trade association specializing in your business.

Personally visit our offshore suppliers (or customers).

Take advantage of online resources such as http://www.sba.gov/oit.

Inspect and approve merchandise before it is shipped.

Think about hiring an international trade consultant.

Become personally familiar with all monetary transactions.

Use a trade lawyer for agent and distributor agreements and licensing requirements.

To begin, begin on a very small scale.

TOP TEN DON’TS

Investigate the potential opportunities and benefits of international trade.

Rely on a single source of supply (or customer).

Have an understanding of intellectual property rights.

Have an understanding of import/export financing.

Learn how our ideal competitors are handling international trade.

Provide dispute settlement provisions.

Make assumptions as to vendor’s compliance with your specifications.

Check out our suppliers/customers before establishing relationship.

Rely on handshake agreements.

Rely solely on others including employees for importing/exporting expertise.

Perspective management aspect required to be an effective strategic manager would be-

1)         Real cool headed, co-operative decision maker. Should be healthy to make a judgment all the while accepting the teams’ advice. And since a Strategic Manager need to take up decisions during pressurized situation, it is important that he be as cool and calm to make a sound decision.

2)         A strategic manager should have the knowledge about his organization. The importance is when he needs to utilize apiece and each of his Strategic Units together or simultaneously, for achieving the objective.

3)         Decision Making should not expect options or other expectations. It should rather be pragmatic and result oriented.

4)         Skill set is a large requirement. Capability to size up the situation, swiftly and accurately, identifying problem roots, evaluating policies that would be relevant to the prevailing environment.

5)         Identifying the company’s SWOT at the prevailant environment and formulating plans and strategies accordingly.

6)         Analytical skills are required in functioning areas eg. marketing , financing, etc dealing with the total company activities.

7)         Tools i.e. quantitative, qualitative must be understood in proper manner.

8)         Written and oral communication skills very important.

            Decision making, with a perfect knowledge of the business environment (internal and external) with a winning attitude for the company as a whole is definite stipulation of a strategic manager.

            By being innovative and with the implementation of additional service products and by it’s readiness to invest in the latest technology to meet customer stipulations ITM remains at the leading edge of Industry advances.

            “We promise AND deliver” “WE BELIEVE THAT UNDERSTANDING YOUR BUSINESS IS PART OF OUR BUSINESS.”

            CUSTOMER COMMUNICATION Using the latest technology, ITM provides a tracking system allowing elimination of enroute delays from source to end user. Customer satisfaction is assured with utilization of our International exposure in Air and Ocean Freight Forwarding and Customs Clearance activities.

            Managing international trade policies, restructuring them according to the need of the hour, implementing the various trade polices, abiding by the norms governing international trade, all are taken into statement when one talks of international trade management.

            There are many trade promotion organizations, also known as TPOs, who strive hard to manage and improve customer relationship. These trade promotion organizations assist, clients to take their trade to the international market arena. This requires the professionals of the trade promotion organizations to be well versed in their subject, to meet the demands of the changing conditions of the market economy.

Role played by the international trade management bodies:

There are many organizations or international trade promoting bodies, which assist countries in improving trade with other countries. However, most of the International trade management bodies perform the following functions.

Gathering knowledge about the latest international trade happenings

Imparting information to the clients in matters related to the betterment of trade with the client’s trading partners.

Helping the client grow by providing superior networking facilities.

Help building partnership.

Given below is a list of trade promoting bodies.

Marketeers And Associates International:

Operates in:

Lower Connectors, Bangalore and New Delhi. ( for example )

Services:

Business development

Management consultant

Implementation of marketing strategies

Other establishments assisting in the promotion of international trade are:

GMS, Inc-International trade consultants

Heaps Technical Services-International consultants in trade.

International trade management is not only vital for the growth of the individual company but it also plays an important role in the growth of economy of a country.

International trade management can be referred to as the process by, which international trade is handled. Even if the international trade manifests favorable trends, there is competition to handle in the international trade market.

An economy might be very small as compared to other economies of the world, but the success of the economy lies in being healthy to act faster than other countries, the promptness with which the nation is healthy to implement trade policies efficiently.

————————– Shivashankar. V. Jirli.

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International pricing strategy is a key component of the international marketing mix. In the context of international business, a firm’s marketing mix might vary from country to country in order to accommodate local differences in culture, economic conditions, product standards, distribution channels, government regulations and so on. Such differences often require adjustments in product attributes, distribution policies, communication policies and pricing strategy.

Developing an international pricing strategy is typically an intricate task because the firm has to determine the optimum pricing strategy in apiece national market and then harmonize the prices crossways countries. The aim is both to control pricing problems and maximize profitability in foreign markets. To that end, international pricing encompasses price discrimination, strategic pricing and regulatory influences on prices.

a) Price Discrimination

Price discrimination exists when the same goods or services are priced differently in different countries. This means that consumers pay different prices for the same products or services based on what the local market can bear. In a competitive market, prices tend to be lower than in a monopoly because there are more players in the market and try to attract consumers to buy their products by bringing their prices down.Therefore, in competitive markets price discrimination can result in profit maximization. Moreover, in competitive markets it can make business sense to charge different prices in different countries.

For a price discrimination strategy to be profitable two conditions need to be met. First, the firm should keep the national markets detached so that developments in one market do not affect the other or the other markets. If the markets are not been kept separate, the price differential for a particular product between two countries can serve as an arbitrage tool. The firm can buy the product in the country where the price is lower and resell in the country where the price is higher and make profit at the expense of consumers.

The second condition is an estimate of the price elasticity of apiece single market. Price reflects nothing more than the perceived value of apiece product as expressed in demand. Therefore, when developing an international pricing strategy, a firm has to be healthy to estimate the perceived value of its product and company performance as well as the price elasticity of its products and the optimum price.

b) Strategic Pricing

Strategic pricing typically combines the benefits and innovations set by a product with the price sensitivities of consumers to develop flexible, executable and sustainable value-based strategies. By implementing thorough customer segmentation to refer the needs of individual customers and achieve profit optimization since perceived value varies crossways clusters of customers, strategic pricing exploits variances between micro-segments, to wage customers with custom-made price/benefit advantages.

Strategic pricing encompasses predatory pricing, multipoint pricing and experience curve pricing.

In particular:

– Predatory pricing

The traditional theory of predatory pricing holds that the dominant firm (predator) lowers its prices so much for a adequate period of time to make its competitors leave the market, but also discourage other competitors from entering the market. Since the firm operates as a monopoly it is normal to adopt that the firm can raise its prices in the national market to acquire high profits. Yet, at the same time, the firm should be profitable in other national markets to subsidize the losses it incurs in the national market it tries to monopolize overseas.

– Multipoint pricing

Multipoint pricing occurs when two or more firms compete in two or more national markets and the pricing strategy in one market might have an impact on the rival pricing strategy in another national market. Multipoint pricing, especially if it is aggressive in a national market, might bring forth a competitive response from a rival firm that operates in another national market. For this kind of pricing strategy to work, marketing managers need to develop a mechanism that can centrally scrutinize pricing decisions in apiece national market around the globe.

– Experience curve pricing

Firms around the globe aim at gaining market share and achieve global income volume by lowering their prices. However, as the accumulated production volume increases, the unit costs decline as a result of lower fixed costs per unit, lower material costs, and superior production skills. The experience curve is the milestone that makes or breaks the pricing strategy: firms that move down the experience curve might experience massive losses in the beginning, but are expected not only to make considerable profits in the near future, but most importantly to have a cost advantage over less-aggressive competitors.

c) Regulatory Influences on Prices

Both price discrimination and strategic pricing might be hindered by antidumping regulations and/or competition policy.

In particular:

– Antidumping Regulations

In international trade law dumping is defined as the act of selling a product in a foreign market lower than what it costs to produce it in the national market. Firms engage in dumping either to acquire market share or to eliminate surplus. By gaining market share they drive competition out of the national market and they can raise their prices as much as they want. In this sense, dumping can be matched to predatory pricing.

Antidumping regulations can protect consumers who feel they are exploited by dumping policies by setting a floor under export prices to limit a firm’s capability to implement strategic pricing.

– Competition Policy

Most countries around the globe have regulations that promote healthy competition, limit the prices a firm can charge and restrict monopolistic endeavors. These regulations are mostly used to control the prices that firms can charge and ensure that consumers will not be victims of monopolistic practices.

In conclusion, developing an international pricing strategy is both complex and time consuming because it requires careful planning, taking into consideration the particular condition of apiece national market and developing a mechanism that can harmonize the prices crossways countries. Above all, an effective international pricing strategy requires determining the optimum pricing strategy in apiece national market to ensure profitability in foreign markets.

Sources:

http://www.investopedia.com/terms/p/price_discrimination.asp

http://crab.rutgers.edu/~sambhary/International Bussiness Environment/notes/International Marketing.pdf

http://faculty.haas.berkeley.edu/tumlinson/UGBA178/Files to Post/Hill_Chap_17_edit0708.ppt

http://ivythesis.typepad.com/term_paper_topics/2009/06/international-pricing-strategy.html

http://www.allbusiness.com/glossaries/experience-curve/4964337-1.html

http://www.investordictionary.com/definition/dumping

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What do we do here at VH International Business Solutions?

Simply put: We help international and domestic companies establish their business presence in the business capital of the World: New York City! The Huge Apple! The Empire State! The crossroads of the World!

VH International Business Solutions initially offered its services to the local market. With the proliferation of consumer World wide web access, the Company was the first in New York City to offer NYC virtual office services interactively via the World Wide Web. With this success, VH International Business Solutions established an instant business-to-business worldwide access to the New York market making acquirable for the first time New York City virtual office services for organizations of all sizes, from the independent entrepreneur to enterprise-level Fortune 500 companies.

Today VH International Business Solutions offers a comprehensive suite of executive office and business support services that can be tailor-made and bring about a meaningful difference for any company of any size in the world. We pride ourselves on service that is reliable, efficient and competitively priced all backed by our celebrated no-nonsense world class customer service. Our mission is to ensure our clients get the service they deserve and are entitled to.

Our 20 years of service add up to strength, experience, and reliability. Offering unbeatable service to individuals, small and mid sized local companies; as well as larger domestic and international firms seeking to establish a presence in the U.S., and particularly in the New York market. As the pioneer of interactive web-based virtual office services in New York City, we are the leader and have the most expertise in working with local and global businesses when entering the New York marketplace. While others accentuate services, we accentuate service.

Since our inception, 20 years ago, our focus on customer service has never wavered. We comprehend our client’s specific needs; there is no such thing as one solution for all. Because we offer client support staffed by seasoned professionals, whether you are an independent professional or a business, we are highly capable to deliver timely solutions again and again with a very satisfied customer rating.

By always staying in touch with our client base, we have also been healthy to expect their needs and grow with their business. That’s one of the major reasons why we have been so successful. We very much look forward to the next 20 years.

Today, VH International Business Solutions offers personalized services globally to individuals and companies in fields as diverse as financial consulting, government agencies, authors, artists, importers, exporters, manufacturers, distributors, attorneys, accountants, consultants, agents, record labels, motion picture theater chains, business professionals, etc. Whether their neutral is to acquire a market foothold or expand current marketing opportunities, our clients benefit from the one-of-a-kind blend of personalized services developed over the past 20 years; combined with an address that confers credibility. Let’s grappling it, having a New York City address might actually help a business grow!

By establishing a presence in what is undoubtedly one of the most renown cities in the world, our clients enjoy an address with an international flavor, arising from the wide variety of New Yorkers who are either of foreign origin, or who do business with countries outside the United States.

VH International Business Solutions’ hands-on management oversees the company’s regular support of businesses located in New York and throughout the world. Our dedicated staff ensures that VH International Business Solutions‘ clients receive the prompt, courteous and accurate service that they require, and to which they are entitled.

We are all very chesty of this achievement and grateful to our clients and employees who helped get us here.

VH International Business Solutions Inc (www.ManhattanVirtualOffice.com), chesty of its success thanks Employees, Clients, Associates and Friends for their support on its 19th anniversary milestone.

VH International Business Solutions Inc, New York’s preferred executive office and voice mail provider, is celebrating its nineteenth anniversary in 2009.  With over 17 thousand clients since its launch nineteen years ago, VH International Business Solutions, Inc has become New York City’s destination for business professionals seeking a one-of-a-kind executive office organization.

“What started out 19 years ago as a basic virtual office support service has steadily grown into a business far exceeding anyone’s expectations,” stated saint Spence, VH International Business Solution’s vice president of operations.  “We are all very chesty of this achievement and grateful to our clients and employees who helped get us here.”

VH International Business Solutions, Inc initially offered its services to the local market.  With the proliferation of consumer World wide web access, the Company was the first in New York City to offer NYC virtual office services interactively via the World Wide Web. With this success, VH International Business Solutions established an instant business-to-business worldwide access to the New York market making acquirable for the first time New York City virtual office services for organizations of all sizes, from the independent entrepreneur to enterprise-level Fortune 500 companies.

“Today VH International Business Solutions offers a comprehensive suite of executive office and business support services that can be tailor-made and bring about a meaningful difference for any company of any size in the world,” stated Mr. Spence. “We pride ourselves on service that is reliable, efficient and competitively priced — all backed by our celebrated no-nonsense world class customer service. Our mission is to ensure our clients get the service they deserve and are entitled to.”

Added Mr. Spence, “During our 19-year life span, our focus on customer service has never wavered. We comprehend our client’s specific needs, there is no such thing as one solution for all. Because we offer client support staffed by seasoned professionals, whether you are an independent professional or a business, we have been healthy to deliver timely solutions again and again with a very satisfied customer rating.”

Continued Mr. Spence, “By being in touch with our client base, we have also been healthy to expect their needs and grow with their business. That’s one of the major reasons why we have been so successful. We very much look forward to the next 19 years.”

For additional information on VH International Business Solutions, visit www.ManhattanVirtualOffice.com

ABOUT VH International Business Solutions, Inc
Conceived in 1987 and Incorporated in 1990, VH International Business Solutions is this day an international bourgeois of New York executive and staffed virtual office services. In the contiguous United States, we offer voice mail points of presence in ninety percent of the Country. Our suite of executive and office support services are not only comprehensive but can also be custom fit for any enterprise-level need. Our services include, but are not limited to New York based virtual and staffed office services, business meeting facilities, nationwide voice mail services, live answering services, New York Say incorporation filing services and much more. In addition, VH International Business Solutions is focused on providing its clients with better support service, which is backed by a seasoned group of professionals who comprehends the needs and issues of today’s business and employees. At VH International Business Solutions, you to get the attention you deserve. For more information, please visit www.ManhattanVirtualOffice.com

International business is a collective term used to describe the operational objectives of organizations that have business interests in other countries. Learn about the efforts of international businesses to standardize their products with help from a management instructor in this free video on business management and international business. Expert: Mark Clifton Bio: Mark Clifton has an degree in marketing management from Oxford Brookes University, and has successfully finished the CELTA instructor training program of Cambridge University. Filmmaker: Paul Volniansky
Video Rating: 5 / 5

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