MIDTERM Summary International Management (6013B0536Y) UvA Business Administration
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Course
International Management (6013B0536Y)
Institution
Universiteit Van Amsterdam (UvA)
Book
ISE International Business
This document is a summary of the chapters 16, 17, 18 of the 13th edition of the book 'International Business' by Hill & Hult, as well as two articles
- Short & Toffel, (2021). Manage the Suppliers That Could Harm Your Brand. Harvard Business Review, 99(2), 108-113 and
- Rust, Moorman & Bhalla, ...
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Business Administration
International Management (6013B0536Y)
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International Management
6013B0536Y
University of Amsterdam
Dr. M.P. Paukku
Summary
Midterm material (book chapters and articles)
,Table of Content
Week 1.......................................................................................................................................................... 3
Chapter 16 – Exporting, Importing and Countertrade..........................................................................................3
Week 2.......................................................................................................................................................... 5
Chapter 17: International Business Functions......................................................................................................5
Short & Toffel, (2021). Manage the Suppliers That Could Harm Your Brand. Harvard Business Review, 99(2),
108-113...............................................................................................................................................................10
Week 3........................................................................................................................................................ 11
Chapter 18: Global Marketing and R&D.............................................................................................................11
Rust, Moorman & Bhalla, (2010). Rethinking marketing. Harvard business review, 88(1/2), 94-101..............16
, Week 1
Chapter 16 – Exporting, Importing and Countertrade
The volume of export activity in the world economy has increased as exporting has become easier
from a large number of countries. The gradual decline in trade barriers under the WTO, EU and
NAFTA contributed to this. Modern communication and transportation technologies have alleviated
the logistical problems. E-commerce and international air services have been used to reduce cost,
distance and cycle time associated with exporting. Firms wishing to export must identify foreign
market opportunities, avoiding unanticipated problems and familiarize itself with the mechanics of
export financing and learn how to deal with foreign exchange risk. Countertrade allows payment for
exports with goods and services instead of money.
LO 16-1: Explain the promises and risks associated with exporting.
The Promise and Pitfalls of Exporting
The great promise is large revenues and profit opportunities, as the international market is normally
much larger than the domestic market. Economies of scale can be achieved, lowering unit costs.
Firms that do not export often lose out on growth and cost reduction opportunities. Studies have
shown that small- and medium-sized firms are reactive in searching for opportunities, whereas large
firms are proactive. The former waits until domestic markets are saturated, as these firms are
unfamiliar with foreign market opportunities (they simply don’t know how big they are/where they
lie) and are intimidated by the complexities and mechanisms of exporting (language, culture, legal
system, currency, etc.). Inter alia poor market analysis and understanding of competitive conditions,
failure to customize, underestimating needed time and expertise are common pitfalls.
LO 16-2: Identify the steps managers can take to improve their firm’s export performance.
Improving Export Performance
International Comparisons. One big impediment to exporting is the simple lack of knowledge of the
opportunities available. Identifying export opportunities is even more complex. Collecting
information helps to overcome this. Some governments help firms with this, e.g., in Germany and
Japan. US firms, however, are relatively blind as they are information-disadvantaged, reflecting
historical differences.
Information Sources. The US firms can increase awareness of export opportunities through the US
Department of Commerce, dedicated to providing business with intelligence and assistance. Large
firms are becoming more willing to discuss opportunities with small-firm owners overseas, as well as
private organizations like banks.
Service Providers. The following providers help companies engage in international trade. Freight
forwarders facilitate transportation for companies that ship internationally in small amounts, so
combining freight would lead to a cost reduction. An export management company (EMC) offers
services to companies that have not previously exported. They offer full menus of services. Export
trading companies export products for companies that contract with them. Export packaging
companies (export packers) provide services to companies that are unfamiliar with exporting,
thereby helping them to minimize packaging and maximize the number of items to be shipped.
Customs brokers can help companies avoid the pitfalls involved in customs regulations. Confirming
houses (buying agents) represent foreign companies that want to buy your products, typically at the
lowest price. Export agents, merchants and remarketers buy products directly from the manufacturer
and package and label the products in accordance with their own wishes and specifications. They sell
internationally through their own contracts and assume all risks. Piggyback marketing is an
arrangement whereby one firm distributes another firm’s products. More than 600 export processing
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