International Trade Case Study

1. The annual growth of global trade business has been reported to reach nine percent over the last 20 years. Despite this fact, many international companies are claimed to rely on outdated manual processes and paperwork when doing the business on an international scale. In 2010, global business was reported to have the overall cash circulation of $15 trillion. International business consists of many processes; export and import operations are the most time- and effort-consuming. These operations raise three fundamental challenges that international trade has to face: 1) compliance with foreign and domestic laws; 2) customs clearance procedures and; 3) international risk management. To conduct international trade, companies need to comply with

Manual methods to address these issues are highly error-prone and time-consuming leading to the ineffective management and allocation of resources. Ultimately, all these disadvantages of manual processes used in international businesses will turn into significant financial losses for the company and undermine competitive advantage. According to the United Nations Organization, international trade has over 7% losses due to inefficient administration of local customs regulations, which totals to $1 trillion lost annually. However, there are also other challenges that international business need to face: management, culture and language specifications, security, etc. In total, the losses that many companies suffer because of using manual processes are extremely

Being a cooperative of 11,000 New Zeeland dairy farmers, Fonterra produces 3.6 billion gallons of milk annually. 95% of company’s production is exported to over 140 countries worldwide, while 5% is sent on the internal market. Surely, that such company needs to coordinate its operation through the world in various countries and the amount of transactional data generated is significant. All of the data needs to be captured, stored and used by management to monitor operations. As an international trader, Fonterra needs to face many trade compliance risks: “commercial risk, meeting country specific export and import regulation, market access requirements, post 9/11 security requirements, and trade sanctions” (Bonneau,