INTERNATIONAL TRADE
Camille Thiers 201910933
[COMPANY NAME] [Company address]
,1
,Table of Contents
Chapter 1: Introduction to international trade .................................................................. 4
1. Why international trade? ................................................................................................. 5
2. World trade ..................................................................................................................... 6
Chapter 2: Globalization ................................................................................................... 9
1. What is globalization? ...................................................................................................... 9
2. Drivers of Globalization .................................................................................................. 10
1. Declining trade and investment barriers ........................................................................................... 10
2. Role of technological change ............................................................................................................. 11
3. Trade policies & agreements .......................................................................................... 11
4. The emergence of global institutions .............................................................................. 13
Chapter 3: The strategy of international business............................................................ 16
1. Strategy and the firm ..................................................................................................... 16
2. Global expansion ........................................................................................................... 18
1. Expand the market ............................................................................................................................ 18
2. Location economies ........................................................................................................................... 19
3. Realize greater cost economies ......................................................................................................... 19
4. Utilizing valuable skills ....................................................................................................................... 20
3. Cost pressures and pressures for local responsiveness .................................................... 21
4. Choosing a strategy ........................................................................................................ 22
Chapter 4: Entry strategy and strategic alliances............................................................. 25
1. Entry strategy considerations ......................................................................................... 25
2. Basic entry decisions ...................................................................................................... 26
1. The decision of which foreign markets to enter, when to enter them and on what scale ............... 26
3. Entry modes ....................................................................................................................... 28
1. Exporting ................................................................................................................................................. 28
2. Turnkey projects...................................................................................................................................... 29
3. Licensing .................................................................................................................................................. 29
4. Franchising .............................................................................................................................................. 30
5. Joint ventures .................................................................................................................................... 31
6. Wholly owned subsidiaries ................................................................................................................ 31
4. Selecting an entry mode ..................................................................................................... 32
5. Greenfield or acquisition ................................................................................................ 33
6. Strategic alliances .......................................................................................................... 34
Chapter 5: Transport modes and intermediaries.............................................................. 36
1. Modes of transport ............................................................................................................ 36
1.Modes of transport .................................................................................................................................. 36
2. Multimodal / Intermodal transport ........................................................................................................ 41
3. Containers (ISO) ...................................................................................................................................... 42
4. Other uniform dimensions ...................................................................................................................... 44
2. Transport Intermediaries .................................................................................................... 45
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, Chapter 5: Transport documents ..................................................................................... 49
1. Introduction ....................................................................................................................... 49
2. Bill of Lading (B/L) .............................................................................................................. 51
3. Inland waterway Bill of Lading ............................................................................................ 54
4. CMR-Consignment note...................................................................................................... 54
4. CIM-Consignment note ....................................................................................................... 56
6. Air Waybill (AWB) .............................................................................................................. 57
Chapter 6: Incoterms ...................................................................................................... 59
1. Introduction ....................................................................................................................... 59
2. What are incoterms ............................................................................................................ 59
1. Distribution of costs ................................................................................................................................ 60
2. Distribution of risks ................................................................................................................................. 60
3. Division of tasks....................................................................................................................................... 60
3. Incoterms – Group 1 ........................................................................................................... 61
4. Incoterms – group 2 ........................................................................................................... 64
5. Exercises ............................................................................................................................ 66
6. Incorrect usage of Incoterms .............................................................................................. 66
Chapter 7: International payment techniques ................................................................. 67
1. Introduction ....................................................................................................................... 67
2. Cash in Advance ................................................................................................................. 67
3. Letter of Credit ................................................................................................................... 68
4. Documentary collection...................................................................................................... 70
Letter of Credit vs Documentary Collection ................................................................................................ 71
5. Open account ..................................................................................................................... 72
Chapter 8: Risks in international trade ............................................................................ 73
1. Risk of non-payment .......................................................................................................... 73
2. Political risk ....................................................................................................................... 74
3. Currency exchange rate risk ................................................................................................ 75
4. Transport & Logistical risk .................................................................................................. 76
5. Administrative risk ............................................................................................................. 77
6. Economical risk .................................................................................................................. 77
7. Legal risk ....................................................................................................................... 78
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Camille Thiers 201910933
[COMPANY NAME] [Company address]
,1
,Table of Contents
Chapter 1: Introduction to international trade .................................................................. 4
1. Why international trade? ................................................................................................. 5
2. World trade ..................................................................................................................... 6
Chapter 2: Globalization ................................................................................................... 9
1. What is globalization? ...................................................................................................... 9
2. Drivers of Globalization .................................................................................................. 10
1. Declining trade and investment barriers ........................................................................................... 10
2. Role of technological change ............................................................................................................. 11
3. Trade policies & agreements .......................................................................................... 11
4. The emergence of global institutions .............................................................................. 13
Chapter 3: The strategy of international business............................................................ 16
1. Strategy and the firm ..................................................................................................... 16
2. Global expansion ........................................................................................................... 18
1. Expand the market ............................................................................................................................ 18
2. Location economies ........................................................................................................................... 19
3. Realize greater cost economies ......................................................................................................... 19
4. Utilizing valuable skills ....................................................................................................................... 20
3. Cost pressures and pressures for local responsiveness .................................................... 21
4. Choosing a strategy ........................................................................................................ 22
Chapter 4: Entry strategy and strategic alliances............................................................. 25
1. Entry strategy considerations ......................................................................................... 25
2. Basic entry decisions ...................................................................................................... 26
1. The decision of which foreign markets to enter, when to enter them and on what scale ............... 26
3. Entry modes ....................................................................................................................... 28
1. Exporting ................................................................................................................................................. 28
2. Turnkey projects...................................................................................................................................... 29
3. Licensing .................................................................................................................................................. 29
4. Franchising .............................................................................................................................................. 30
5. Joint ventures .................................................................................................................................... 31
6. Wholly owned subsidiaries ................................................................................................................ 31
4. Selecting an entry mode ..................................................................................................... 32
5. Greenfield or acquisition ................................................................................................ 33
6. Strategic alliances .......................................................................................................... 34
Chapter 5: Transport modes and intermediaries.............................................................. 36
1. Modes of transport ............................................................................................................ 36
1.Modes of transport .................................................................................................................................. 36
2. Multimodal / Intermodal transport ........................................................................................................ 41
3. Containers (ISO) ...................................................................................................................................... 42
4. Other uniform dimensions ...................................................................................................................... 44
2. Transport Intermediaries .................................................................................................... 45
2
, Chapter 5: Transport documents ..................................................................................... 49
1. Introduction ....................................................................................................................... 49
2. Bill of Lading (B/L) .............................................................................................................. 51
3. Inland waterway Bill of Lading ............................................................................................ 54
4. CMR-Consignment note...................................................................................................... 54
4. CIM-Consignment note ....................................................................................................... 56
6. Air Waybill (AWB) .............................................................................................................. 57
Chapter 6: Incoterms ...................................................................................................... 59
1. Introduction ....................................................................................................................... 59
2. What are incoterms ............................................................................................................ 59
1. Distribution of costs ................................................................................................................................ 60
2. Distribution of risks ................................................................................................................................. 60
3. Division of tasks....................................................................................................................................... 60
3. Incoterms – Group 1 ........................................................................................................... 61
4. Incoterms – group 2 ........................................................................................................... 64
5. Exercises ............................................................................................................................ 66
6. Incorrect usage of Incoterms .............................................................................................. 66
Chapter 7: International payment techniques ................................................................. 67
1. Introduction ....................................................................................................................... 67
2. Cash in Advance ................................................................................................................. 67
3. Letter of Credit ................................................................................................................... 68
4. Documentary collection...................................................................................................... 70
Letter of Credit vs Documentary Collection ................................................................................................ 71
5. Open account ..................................................................................................................... 72
Chapter 8: Risks in international trade ............................................................................ 73
1. Risk of non-payment .......................................................................................................... 73
2. Political risk ....................................................................................................................... 74
3. Currency exchange rate risk ................................................................................................ 75
4. Transport & Logistical risk .................................................................................................. 76
5. Administrative risk ............................................................................................................. 77
6. Economical risk .................................................................................................................. 77
7. Legal risk ....................................................................................................................... 78
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