Countertrade Despite political and economic reforms in many developing countries, countertrade promises to be a significant tool for consummating international transactions. It is unlikely that these countries will find all the foreign exchange they need to finance their restructuring programs. Thus, international managers need to develop a countertrade plan within their overall international marketing plan. A method to identify and take advantage of countertrade opportunities also needs to be developed. There are many facets to establishing a countertrade strategy. One of the perplexing problems is that countertrade takes so many forms. Despite the potential confusion, the clear evidence that countertrade arrangements are growing means that they can be more innovative. Managers can develop new types of countertrade arrangements to fit the particular deal being negotiated. Any previously developed typology should not constrain the executor of countertrade. 2.0 DEFINITION - WHAT IS COUNTERTRADE? Countertrade is the sale that encompasses more than an exchange of goods and services or ideas for money. In international market, counter trade transactions "are those transactions which have as a basic characteristic a linkage, legal or otherwise between exports and imports of goods and/or services in addition to , or in place of financial settlements" Historically, countertrade was mainly conducted in the form of barter, which is a direct exchange of goods of approximately equal value between parties, with no money involved. (At the time when there was no common medium of exchange) However, over time, money emerged and became the common and convenient medium of exchange. Countertrade transactions have always risen when ec... ... middle of paper ... ...n, the development of intermediary skills may offer profitable opportunities for small businesses and entrepreneurs. Bibliography: 1. Raj Aggarwal, "International Business Through Barter and Countertrade," Long Range Planning, June 1989, 75-81. 2. "Current activities of International Organizations in the filed of Barter and Barter-like transactions," Reports of Secretary General, United Nations, General Assembly, 1984 , 4. 3. Jean-Francois Hennart and Erin Anderson, "Countertrade and the Minimization of Transaction Costs: An emperical Examination," The Journal of Law, Economics and Organization, September 2, 1993, 290-313. 4. Christopher M. Korth, "The Promotion of Exports with barter," in Export Promotion, ed. M. Czinkota (New York: Praeger, 1983), 42. 5. Michael R. Czinkota, Ikka A Ronkainen and Michael H. Moffett "International Business"
Sweeney, B, O'Reilly, J & Coleman, A 2013, Law in Commerce, 5th edition, Lexis Nexis, Australia.
Exchange: trading goods between two people, were both benefits. However, thought the narrator had not seen and exchange he did however heard about one of Professor Chagnon’s experiences with someone wanting to trade his knife with him.
Bentley, J., & Ziegler, H. (2008). Trade and encounters a global perspective on the past. (4th ed., Vol. 1, pp. 182-401). New York: McGraw-Hill.
The ending of the economic embargo of Vietnam in 1994 opened a new panorama over international marketing. A new high potential market, with more than 70 millions of people was avaiable for the companies: the next great frontier.
Many business owners and entrepreneurs are doubtful about the global opportunities available to their business. In other words, business owners don’t give consideration to the world markets, instead they tend think locally in terms of gaining customers. This doubt however is unfounded. The international trade commission reported that 70% of the world’s purchasing power and 95% of the world’s consumers are located outside of the United States, which means that there is a massive market that is currently untapped by 99% of business in America. In addition to doubt, there is the uncertainty about exporting to other countries, this uncertainty may stem from lack of knowledge about foreign trade and the international laws. A business owner may be uncertain about how, when, where, and to whom it is legal to ship their products. Although, this uncertainty is understandable it is not required for businesses that are conducting business legally within the United States, business owners should remain mindful of this so that they can push their uncertainties aside. The last factor that deters businesses from international trade is Fear. Fear that there will be unforeseen and uncontrollable issues with transporting goods such as: theft, loss, damages, diversions, and/or regulatory penalties that may be imposed on the business. Although, there is a
Mitchener, Kris, J. "Politics and trade: evidence from the age of imperialism." Voxeu.org. CEPR, 11 April 2008. Web. 30 November 2013.
In the essay the author will explain intrapreneurship, how a business can incentivise it and the benefits of using this concept. The essay will incorporate real examples to support the content given.
H.Stephen Harris Jr. and Philiilp R.Stein, "Brief Summary of Antitrust Law Regarding 'Leveraging' ", 1995.
The practice of trading and bartering of commodities has been around since the beginning of time. The concept of commodity chains was developed by Terence Hopkins and Immanuel Wallerstein in an attempt to understand the spread of capitalism and economic change. (Bair & Werner, 2011) The emergence of capitalism has brought about an anthropogenic phenomenon know as globalization as a means to create profit and in doing so altered competitive dynamics (Gereffi 1999). Globalisation of economies has lead to the construction of chains of production, distribution and consumption transcending borders across the world. Gereffi (1994) identified these chains as Global Commodity Chains, using them as a method to analyze the global economy.
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
Sloman, J., Hinde, K. and Garratt D. (2013) Economics for Business, 6th ed., Prentice Hall / Pearson,
The first part provides reasons why starting a new business is profitable in terms of having higher or bigger possibility for growth of the business and higher rate of return. The second part highlights the originality of starting a new business as an entrepreneur. The last part mentions why starting a new business is more entrepreneurial than franchising in terms of entrepreneurial skills and
...sive, unaffordable yet basic commodities, spurring economic growth and supporting the legal economy. This is a critical provision as it fosters the aspects of trade in the world. It is also important to agree that this transaction in almost every tradable commodity and services both genuine and counterfeit supports the dealings shown in black market trade. According to Bahmani-Oskooee & Goswami (2005), the supporters of black market cite many reasons for its embracement. The fact that the trade involves transaction in almost every tradable commodity and services both genuine and counterfeit makes it very difficult to curb. This is demonstrated explicitly by the supporters of black market who cite numerous reasons for its existence. The economic support, employment creation, money circulation, and many others have anchored this trade within various world economies.
Machiraju (2002,75) explains the basis of this concept in these words, “In competitive markets with a large number of buyers and sellers and low cost access to information, exchange adjusted prices of tradable goods and financial assets must be equal worldwide. This law of one price is enforced by international arbitrageurs who buy low and sell high and prevent all deviations from equality. Four theoretical economic relationships emerge from arbitrage economic activity”.
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...