NEW YORK INSTITUTE OF TECHNOLOGY
School of Management
I. COURSE NUMBER AND TITLE
INTL 710 - Export/Import Operation and Finance
II. FACULTY
Dr. Abram Poczter
Mailing Address:
New York Institute of Technology
School of Management
324 Wisser Library
Old Westbury, NY 11568
TELECOMM:
Tel: (516) 686-7708 (Voice-mail Box, O.W.)
(212) 261-1595 (Office, Metro)
Fax: (516) 484-8328
Internet E-mail: apoczter@iris.nyit.edu
OFFICE HOURS: TBA
III. COURSE DESCRIPTION
The course is designed to provide the students with understanding of
export/import activities as a stand-alone function as well as an
integral part of firms global strategy.
Principally, the course consists of two parts.
Part I of the course will briefly overview the historic background
of the international business, as it relates to export/import of goods
and services and as it relates to the Corporate strategy and the models related
to the basic concepts underlying the trends in, and the dynamic interaction
between the economic, legal, political, cultural, socio-demographic, and
competitive elements of the external environment will be discussed. It will also
include a survey of the marketing research methodology related to the validation
of the theoretical concepts as well as the assessment of the market threats and
opportunities in various market segments.
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Part II of the course will be devoted to the discussion of the development,
implementation and control of the export/import operations with emphases on
marketing mix and financing.
IV. COURSE OBJECTIVES
Upon successful completion of the course a student will understand
the role played by export/import operations within the context of
overall business strategy of a firm. S/he will be able to develop
a detailed plan for export/import activities, including: evaluation
of market conditions and sales potential, determination of the
marketing mix and financing, as well as the documentation requirements.
V. TEXTBOOK AND OTHER MATERIALS
A. Required Textbook:
1. Wells, L. Fargo and Karin B. Dulat, Exporting: From Start to Finance.
McGraw-Hill, 1996.
2. Importing into the United States. Department of the Treasury,
United States Customs Service, 1993
B. Recommended Textbooks and Pamphlets:
1. Long Island International Trade Desk Manual. Island-Metro
Publications, 1994 (will be available in class - free of charge)
2. Trade Secrets - The Exporter and the Bank. Fleet Bank, 1994
3. Branch, Alan. Elements of Export Marketing and Management.
Chapman and Hall, 1990
4. Goldsmith, Howard R. Import/Export: A Guide to Growth, Profits,
and Market Share. Prentice Hall, 1989
The following are textbooks in the related area of international
business:
1. Albaum, Gerald, et.al. International Marketing and Export
Management. Addison-Wesley, 1996
2. Ball, Donald and Wendell McCulloch, International Business,
Irwin, 1995
3. Daniels, John, D., Ernest W. Ogram, Jr., and Lee H. Radebaugh,
International Business: Environments and Operations, 3rd. ed.,
Addison-Wesley Publishing Co., 1982
4. Robock, Stefan,H., and Kenneth Simmonds, International Business
and Multinational Enterprises, 3rd. ed., Richard D. Irwin Inc., 1993
5. Root, Franklin, R., International Trade and Investment, Seventh
Edition, South-Western Publishing Co., 1994
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C. Other Materials:
1. www.stat-usa.gov (on Internet)
School of Management has acquired a license to STAT-USA, a
“one-stop shopping” for everything you wanted to know about the
world’s export/import operations. STAT-USA is an attempt (pretty
successful) to put in one place the myriad of data bases
generated by Federal Government’s departments and agencies
(Commerce, State, CIA, etc.). The most prominent component is
the NTDB (National Trade Data Bank), containing, among other
things, Business Leads (who is looking to import crab legs #2) to
the Basic Guide to Exporting (who needs to buy the textbook?).
Start browsing – immediately!
Do remember to get STUD account, which is your gateway to
Internet, for which you have already paid the fee.
2. 1-800-USA-TRADE - Trade Information Center and Global Export
Market Information Service of the Department of Commerce.
Automated fax retrieval service.
Voice-menu driven. Information is faxed to a number you indicate.
Essentially the same information is available on the Web, at:
http://www.ita.doc.gov
VI. COURSE REQUIREMENTS
1. TERM PROJECT
Allowable types of term project are:
A. Traditional research paper:
A1. Exporting (select a product) Into (select an international market)
-ORA2. Importing (select a product) Into United States.
One should, at the beginning of the course gather some encyclopedic
information on the market/country of interest This type of a paper will
contain the analysis of the market environment, proposed market segments
and the marketing mix, organized along the lines of a business plan, as well
as the list of further sources, references, etc.
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B. More specific topics in export/import operations and financing of
interest to you, such as:
B1. Channels of distribution in, for example - Japan, and its impact on
export strategy
B2. Government policies and programs aimed at stimulation of
exports
B3. International Agreements affecting export/import strategies
B4. Sources and forms of financing of export/import operations
Topics and detailed outlines of the papers must be submitted for
acceptance prior to the date of Midterm Examination
Note: Term Projects, regardless of the selected type, must comply with the
general standards for term papers in a graduate course, I.E., typed,
original, direct citations enclosed into quotation marks, footnoted, etc.
Projects deadline is the day of the Final Exam. Missing the deadline will
result in an issuance of a grade one level below its actual worth.
Plagiarism of any sort will be punished by issuance of F-grade for the
course.
In search for a topic of the paper as well as a supplementary reading sources
the following, non-exhaustive list of publications should be considered:
* Columbia Journal of World Business
* European Journal of Marketing
* Harvard Business Review
* International Marketing Review
* Journal of Commerce
* Journal of International Business Studies
* Journal of International Marketing
* MSU Business Topics
* Journal of Marketing
* Journal of World Business
Of course, a part of your daily/weekly routine is reading of WSJ, and
Business Week, so I just would like to remind you to turn to the
international business sections.
2. EXAMINATIONS
There will two (2) in-class exams: Midterm and Cumulative Final
The nature and the dates of the exams will be discussed in class.
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VII. GRADING CRITERIA
Class Participation . . . .10%
Midterm . . . . . . . . . . . .20%
Research Paper . . . . . 35%
Final Exam . . . . . . . . . 35%
NOTE: a. Unauthorized absence from the Midterm Examination will
automatically lead to issuance of "W"-grade (Withdrawn).
b. Unauthorized absence from the Final Examination will
automatically lead to either a “F” (if the midterm grade was
“F”) or “W.”
c. The deadline for submission of Term Paper/Project
is the last class meeting. Missing this deadline will result
in issuance of "I"-grade (Incomplete). Subsequently submitted
materials will be graded one level below its actual worth.
VIII. COURSE OUTLINE
SESSION I
A. SESSIONS OBJECTIVES:
1. Gaining an understanding of the role International Marketing,
and specifically Export/Import operations plays in the overall
corporate/business strategy
2. Familiarization with the theoretical underpinnings of international
business, its historic development, its advantages and disadvantages.
B. DISCUSSION TOPICS:
1. Concepts in Corporate/Business/Marketing Strategy, Interaction
Between Marketing, Organizational and Financial Strategies
2. Components of Business strategy: Product/Market Scope, Growth
Vector, Competitive Advantage, Synergy.
3. Strategic Audit and utilization of Export/Import Programs
4. Short history of the international business practice and theory:
5. Comparative Advantage, Relative Factor Cost and the Leontieff's
Paradox, Technology and Economies of Scale, Linder Theorem
International Product Life Cycle: patterns of trade and direct
investment
6. Porter's "Diamond of Competitive Advantage of Nations"
7. Economic/Political Cooperation: Worldwide and Regional Agreement
and their impact on the marketing strategy of a firm
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C. ASSIGNMENTS: Text: Chpts; 1,2, {14,15,16,17 - skim} and LECTURES, as
most of the discussed materials is not covered adequately in the text.
SESSION II and III
A. SESSION OBJECTIVES:
1. To understand the impact of the trends in the external environment
on the emerging threats and opportunities in international markets
To learn the basics for analyzing and "forecasting" elements of the external
environment
B. DISCUSSION TOPICS:
1. Political/Legal Environment & Trends:
A. National Goals and Aspirations
B. Impact of laws on export/import operations:
a. Extraterritoriality of US laws
b. Legal forms of incorporation: DISC and FSC
c. "Home-content" and "Buy-local" legislation, Foreign (Free)-Trade Zones
d. Licensing and certification
e. distributor agreements
f. pricing
g. insurance and distribution
C. Political Risk: assessment and responses
D. Regional and World Agreements and Organizations:
a. IMF and World Monetary System
b. World Bank and Regional Development Banks
c. Export-Import Bank, Overseas Private Investment Corp., Private
Export Funding Corp.
d. GATT and bilateral agreements: MFN, Caribbean Basin Initiative,
Industry-specific Agreements
e. G-7(8?), G-10, OECD.
f. Free Trade Areas, Customs Union, Common Market, Economic Union
as concepts. Examples: NAFTA, LAIA, ANDEAN COMMON
MARKET, CACM, CARRICOM, EFTA & EU, ASEAN, ECOWAS, etc.
2. Economic Environment & Trends:
A. Levels of economic development
B. International business cycle
C. Fundamentals of balance of payments
D. IMF and Government interventions:
a. import tariffs, quotas and other non-tariff restrictions
b. foreign exchange restrictions and exchange rates control
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c. export stimulation programs
E. GNP, GDP, Disposable and Discretionary Income, Unemployment,
Inflation, Interest rates.
3. Cultural/Social/Demographic Environment and Trends:
A. Population Trends
B. Definition and Measurement of Culture
C. Globalization of Markets hypothesis and contra-arguments
D. (McWorld v Jihad). Impact on export marketing
E. Cross-cultural negotiations
4. Technological Environment and Trends:
A. International telecommunication
B. International Logistics
C. Diffusion of manufacturing technology
5. Competitive Environment and Trends:
A. Competitive nature of US market
B. Competitive nature of international markets
C. ASSIGNMENTS:Text: Chpts; 14,15,16,17
SESSION IV AND V
A. SESSIONS OBJECTIVES:
1. Learn to analyze international market potential
2. Learn to develop an export entry strategy
B. DISCUSSION TOPICS:
1. Marketing Research, Sources of Secondary Data:
a. International Trade Administration, Department of Commerce:
*Industry Sector Analysis
*Alert Reports (AgriBusiness)
*Foreign Economic Trades
*Overseas Business Reports
*Export/Import Trade Statistics
*Trade Leads and Foreign Business Contacts
b. State Departments of Economic Development
c. Industry Associations and Consortia
d. Foreign Governments "Agencies":
*Consulates
*Permanent Trade Missions/Resident Buying Services
*Trade and Investment Promotion Agencies
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e. Independent Organizations:
*The Economist Intelligence Unit
*Business International, etc,etc,etc
f. Banking Organizations:
*Export Import Bank
*International Banking Departments
2. Marketing Research, Sources Primary Data:
a. Trade Missions/"Grand Tours"
b. Trade Fairs/Catalog Exhibitions (ATA Carnets)
c. Surveys:
*Culture, language, sampling frame, data collection issues
*International Marketing Research Houses
3. Market Segmentation, Targeting and Positioning
4. Structuring the Channels of Distribution
a. Role and Functions of Channels of Distribution
b. Market and Product factors affecting the structure
5. Modes of Exporting:
a. Indirect Exporting:
*International Trading Companies
*Export Management Companies
b. Limited Direct Exporting:
*Piggyback
c. Direct Exporting, Facilitators:
*Export/Import Brokers
*Customs Brokers
*Freight Forwarders
*Factors
*Desk Jobbers, Drop Shippers
*Manufacturer's representatives
*Managing Agents
*Distributors
*Merchants
C. ASSIGNMENTS: Text: Chpts; 4,5,6,7,8
SESSION VI
A. SESSION OBJECTIVES:
1. Learn to develop PRODUCT strategy and tactics for Export
2. Analyze the cost, demand and legal aspects of globalization
of markets hypothesis as related to product policies
B. DISCUSSION TOPICS:
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1. International Product Portfolio
2. Product positioning
3. Core, Formal and Extended Product design for competitive advantage
4. Standardization Vs Adoption in theory and practice:
a. Cultural sensitivity, borrowing, and "horizontal" segmentation
b. Economies of Scale
c. Legal and Technical adaptation requirements:
d. *National Center for Standards and Certificates Information of The
e. National Institute of Standards and Technology (MD)
f. *American National Standards Institute (NY)
g. Home content requirements and Import Tariff structure
h. Adaptation of: Brand Names, Labels and Markings, Physical/Chemical
i. Characteristics and Components, Package (Size, Trade and Shipping)
C. ASSIGNMENTS: Lectures
SESSION VII - MIDTERM EXAMINATION
DEADLINE FOR TERM PAPER OR RESEARCH PROPOSALS
SESSION VIII
A. SESSION OBJECTIVES:
1. Learn to design a promotional program for international markets
B. DISCUSSION TOPICS:
1. Promotional Objectives, Adaptation Vs Standardization
2. Elements of promotional mix:
*Personal Selling
*Public relations and Publicity
*Advertising
*Sales Promotion
3. Promotional programs in different cultural, legal, and media settings
4. Use of International and Home-country Advertising Agencies
C. ASSIGNMENTS: Text: Chpts; 12
SESSION IX
A. SESSION OBJECTIVES:
1. Learn to develop a pricing strategy for export
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B. DISCUSSION TOPICS:
1. Pricing objectives:
*market penetration
*market skimming
*Image pricing
*early cash recovery
2. "Iron triangle" in pricing: Consumer, Cost, Competition:
*Cost escalation in Exporting:
Ad Valorem, Specific and Combined Duties,
Insurance,
Packaging and Transportation
*Price elasticity of demand and competitive market structures
3. Anti-dumping legislation and price controls
4. Counter-Trade, an alternative mode of pricing and financing:
a. Reasons for counter-trade
b. Types of Counter-trade:
*Barter
*Counter-purchase (Parallel Barter)
*Compensation trade (Buy-back)
*Switch Trading
*Offset
5. Price Quotations in export/import operations:
*EXW (Ex-works)
*FOB (Free-On-Board)
*FAS (Free-Alongside-Ship)
*CFR, C&F (Cost and Freight)-ocean
*CPT (Carriage-Paid-To...)-non-ocean
*CIF (Cost-Insurance-Freight)-ocean
*CIP (Carriage-Insurance-Paid To...)-non-ocean
*DDF/P (Delivered-Duty-Free/Paid To...)
C. ASSIGNMENTS: Text, Chpts:
SESSION X AND XI
A. SESSION OBJECTIVES:
1. To investigate the sources and methods of financing of export/import
operations
2. Discuss the documentation required for the physical
and financial flows
B. DISCUSSION TOPICS:
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1. Sources of financing:
a. Exporters: Consignment, Open Accounts
b. Importers: Cash-in-Advance,
c. Commercial Banks: Collateral Loans, Banker's Acceptances and
Discounting, Letters of Credit: Confirmed/Unconfirmed,
Irrevocable/Revocable, Revolving, Back-to-back, Transferable,
Standby (Performance).
d. Export-Import Bank: Loan Guarantee Program, Political and
Commercial Insurance (FCIA)
e. Small Business Administration: Export Revolving Line of Credit
and International Trade Loan Program (guarantees)
f. State and Local Governments
g. Export Trading Companies and Export Management Companies
h. Factoring, Forfeiting, (of A/R), Confirming (of order)
2. Exchange Risk Management
C. ASSIGNMENTS: Text, Chpts: 19,35,36,37, 39,40,41, Lectures
SESSION XII
A. OBJECTIVES:
Develop understanding of the foreign exchange markets, risks involved
in operating in a multi-currency environment, and basic approaches to
the management of foreign exchange risks
B. DISCUSSION TOPICS:
1. Foreign Exchange Market:
a. Functions of the Foreign Exchange Market
b. Participants in the Foreign Exchange Markets
b. Transactions, Rates and Quotations
2. Basics of Forecasting Exchange Rates:
a. Parity Conditions, Prices, Interest Rates and Exchange Rates
3. Managing Transaction Exposure:
a. Set contract in Home-country currency
a. Forward Market Hedge
b. Money Market Hedge
c. Options Market Hedge
d. Note on Swaps
C. ASSIGNMENTS: Text, Chpts: 25, Lectures, Handout
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SESSIONS XIII-XIV
A. SESSION OBJECTIVES:
B. DISCUSSION TOPICS:
1. Documentation for Export/Import Flow
a. Pro Forma Invoice
b. Export/Import Licenses
c. Sales Contract (UN Convention on Contracts for International Sale
of Goods, Jurisdictional Clause, Arbitration Clause), Arbitration
Vs Litigation, Commerce Department Trade Complaint Service
d. Commercial and Consular Invoice
e. Shipper's Export Declaration
f. Certificate of Origin
g. Inspection Certificate
h. Insurance Certificate
i. Bill of Lading: Types and uses
j. Dock, Warehouse Receipt
k. Drafts
C. ASSIGNMENTS: Text, Chpts: 24,26,27,28, 31
Lectures
Importing into the United States
Handouts
SESSION XV
A. SESSION OBJECTIVES:
Discuss physical distribution systems and transportation insurance
B. DISCUSSION TOPICS:
a. Modes of transportation:
*Inland
*Marine
*Air
b. Organizational Arrangements and Rates:
*Conferences
*Independent Lines
*Independent Companies (Charters and Tramps)
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c. Selection Criteria:
1. product related
2. market related
3. costs considerations:
*packaging
*freight rates
*inventory carrying cost
*insurance
*opportunity costs
4. Value-to-weight equation and Freight Rates Density Effects
5. Legal Considerations:
*Federal Cargo Preference Act
*UNCTAD Code of Liner Conduct
d. Maritime Insurance
e. Air Cargo Insurance
C. ASSIGNMENTS: Text: Chpts; Lectures
SESSION XVI - FINAL EXAMINATION (LAST CLASS MEETING)
DEADLINE FOR SUBMISSION OF TERM PAPERS OR RESEARCH
LOGS
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