Blok H4
English
- Writing a summary
- Writing a report
Financial Management
- Calculating the amount of sales and purchases based on the data
- Calculating the opening balance based on the data and sales and
purchases
- Calculating the liquidity forecast
- Calculating the profit and loss account
- Calculating the closing balance sheet based on the previous described
aspects
- Knowing the difference between income and costs
Country Analysis
Lecture 1
Companies are forced to go abroad because:
 There is too much competition in the home country. Veel concurrenten in
Nederland.
 It’s easier to go abroad. Lower costs in other countries like Africa and Asia.
Also the export costs are not very high.
 The relevant market for a company is the international market because
the world has globalized.
Trade off is a balance between risk and a opportunity.
If you fill up the filter model you can see which country you should choose.
GDP per capita = gross domestic product per person = bruto binnenlands product
per persoon.
Import duties = when you want to import in a country, you have to pay an extra
tax. When someone in Africa wants have the product but has to pay a lot of
money to get it in the country, it isn’t attractive.
Distance = the more distance, the more transportation costs.
You would like to rank all those criteria’s.
Weighted scores = Nigeria = 0.5 + 0.2 + 0.3 + 0.5 x 2 + 0.2 x 2 + 0.3 x 1 = 1.7
The one closes to 1 is the most effective. South Africa is the most effective.
The United States has a negative saldo on the balance of payment.
They are receiving less money than they spend.
Most countries can’t have a negative saldo on the balance of payment.
Americans buy everything on credit(cards). They are spending more than they
have. America can have a negative saldo because US is rending money from
China and Japan. Countries with a positive saldo lent out money to countries with
a negative saldo.
A surplus on a current account = The Netherlands. We export more than we
import. We are doing that for years and we always have a positive saldo on the
current account. They money we don’t spend, we lent that to countries with a
negative account.
A surplus can be positive and negative. Positive: good competitive position.
Netherlands export product: Heineken beer, music, tulps, dijk builders.
Negative: this country has a weak economic position. If you export more than
you’re import, the economic situation of the country can be very bad.
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
For countries like india, china and Africa it’s positive to have a negative because
for them it is a investment in time. They are investing and are slowly receiving
more money in years. (Denk aan China, was 20 jaar geleden nog arm maar nu is
het goed opgebouwd en is een rijk land).
Current account = export and goods
Financial account = if you loan money to other countries or buying a band
(aandeel) in an abroad company.
Balance of payment = page 12 of reader.
Lecture 2
Country risk  when the country you are exporting to has not enough money to
import the goods. Importing goods costs money.
Exchange rate risk  when the exchange rate for the dollar is high, you are
spending more money. When you are receiving money from US when the dollar is
high, then you are getting more.
1. Cultural risks  someone doesn’t pay or pays to late.
2. Transport risks  products can break
3. Liability  every country has different laws.
Political risk = when there is an earthquake or something, the payments are
blocked. The country needs the money so the money can’t flow out.
Economic risk = the money doesn’t have the money. So when you want to export
money, you can’t.
Currency generating capacity = how much money can a country earn.
It depends on:
- Degree  when a country is not attractive.
- Economic situation  unemployment of the people who live in the country.
They can’t make good products so can’t export them.
- External econmic situation  next sheets.
Balance of payment = countries with a positive saldo can always pay the import
costs. You also have countries with a negative saldo. When these countries get
out of reserves (reserve) then they can’t pay the import costs. When you
exporting to countries with a negative saldo, it is unattractive because the
country may not import your goods. When you stay in EU, you have lower import
costs because there isn’t an exchange rate.
Foreign debt = repay. When this is increasing, the country risk is increasing.
When the international reserves are high and the imports are low  the country
is safe. They can pay the import costs with the international reserves.
1. 500/100 = 5
If the answer is 5. Than the international reserves are 5 times bigger than the
import. The reserves last for 5 years before a country runs out of money.
2. 1500/500 = 3
3 is bad, it should not be higher than 1. You need to pay way more than you
earned. You pay 1500 and you get 500.
With this formula you do not know the repayment.
With formula 3 you do know that.
3. 75 + 100 / 500
500 is what you get and you pay every year 175. in this case there is enough
money left to pay for the import.
This is good!
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
Waarom is het niet slim om te exporteren naar landen met een negatief saldo?
- Shortage  they always paying more money than they earn, they may run
out of money.
- Devalue currency  you export more than you import
- Import restrictions  block the border so we don’t import that money
goods anymore. In this case Jobe can’t export to Cuba anymore because
Cuba blocks the borders.
- Interest?
Lecture 3
Country risk = when you export your product to a country that doesn’t have the
euro, they can’t pay for your products. For example Africa wants to import your
products, but they can’t pay for it.
Political risk = because of political decisions there can also be a country risk.
Money is blocked for import/export because they want to build up the country.
For example countries that are in war of nature disasters. They need the money!
Principal = aflossing
Foreign/external debt = buitenlandse schuld
Foreign debt has to be payed back in 10 years because it is very high.
More money is flowing out the US, than is coming in.
Why doesn’t US run out of money?
 Because China and Japan lent money to US
 US is selling assets to other countries like shares (aandelen) or
obligations.
Why doesn’t the RMB appreciates against the dollar?
The Chinese government keep the RMB low in value because in that way the
Chinese export industry is going well. If they don’t do that the Chinese products
will be more expensive and the export will be less.
Direct quote = 1 euro = 0.20 Rub
Indiredct quote = 1 rub = 5 euro.
Spread = the difference the buying and selling rates.
Transparant market =
Appreciation = A rise in the rate of a system with flexible exchange rates
When the euro is worth more than the dollar, the euro appreciates against the
dollar and the dollar depreciates against the euro.
Forward market = if you want to buy dollar in August, but the dollar has a good
exchange rate right now. In this case you can already buy the dollar now and get
it in August.
Spot market = Delivers currencies within two working days in direct or indirect
quote.
Devaluation = a decision to decrease the local currency
Spot rate = current rate
Deficit on current account Europe? (We import more than we export)
Our products will be more attractive. When we import more than the euro gets
cheaper and more people will buy goods in our country.
Inflation in Europe is 2% and in USA 4%
It is more attractive to buy European products.
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
Bad investment climate in Europe?
Foreigners will not invest in Europe anymore and the balance of the Euro
declines.
Interest rate in Europe is 2% and USA 4%
It’s better to have an account on a American bank. So the Euro will decrease and
the dollar will increase.
The Denish crown and the Euro are fixed to each other. When the Denish crown is
decreasing the European central bank is going to buy Denish crowns.
Lecture 4
Free trade zone:
- No mutual tariffs between member states
- Each country maintains it’s own import tariff in relation to countries
outside the trade zone
- Nafta = Mexico, Canada and the United States.
Custom Union:
- No mutual tariffs
- Same tariff for non participating countries
Common market:
- No mutual tariffs
- Same tariff for non participating countries
- Free movement production factors
Economic union:
- No mutual tariffs
- Same tariff for non participating countries
- Free movement production factors
- Common economic policy
European Law
Free movement of goods – Article 28 TFEU
Equality of men and women – Article 153 section 1 sub i TFEU
€ - Article 310 TFEU
Accesion of a new Member State – Article 326 TFEU
Competition – Article 101 TFEU
Tourism – Article 195 TFEU
Within the European Union, what is Brussels competent to do and what is The
Hague (representing The Netherlands) competent to do?
Use article 3, 4, 5 and 6 TFEU.
Article 3  for these aspects is Brussels exclusively competent. They make these
specific rules for all the member states of the EU.
Article 4  The Hague and Brussels together are going to deal with these policy
areas. Voor deze onderwerpen is Brussel niet excluief bevoegd maar moet andere
EU landen erbij betrekken om hier wetten voor te maken.
Article 6  The hague is competent to do all these topics themselves. Brussels is
only allowed to support them. Den Haag (en alle andere membersstates) mag op
deze aspecten wetten bedenken en Brussel mag alleen ondersteunen en niet mee
bedenken.
Primary law = primair recht. These are the treaties, these are more general.
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
Secondary law = secundair recht. Is not in the reader so you can not find it. You
can only find in on the website of the European Union.
Belangrijke topics:
- EU by topic  customs and tax  legislation (The primary law is article 28
till 33. More specific laws can be found on the website).
- Import and export  VAT’s
- Art 288  primary law
Criteria : This is a primary law that explains which secondary law options there
are
1: regulation  most important
2: directives  most important
3: decisions
4: recommandations
A regulation is general application  het is voor iedereen.
Binding its entirely and directly applicable  het is geldig en bindend voor de
gehele EU.
Regulation = Wet
For very urgent matters, always regulations !  voor zeer dringende zaken.
All members states have to implement the regulations. When a member state
doesn’t have the money, the EU will fund.
Directive = richtlijn
Directives zijn richtlijnen die richting geven naar een doel.
For example: Brussels says to all the members states ‘we want in 5 years equal
rights for men and women, we don’t care how you are going to achieve that, but
you have to achieve it in 5 years. You can use your own methods’. The states
have freedom and a own choice to do it.
Directive and regulations are both laws. Maar regulation voelt meer als een ‘echt’
recht omdat je daar minder vrijheid hebt dan bij een richtlijn, bij een richtlijn
mag je zelf weten hoe je het doel behaald. There is a difference in the way you
are going to achieve your goals. Regulation Brussels is very powerfull!
Decision = is a specific law for a specific company or for a specific country. It isn’t
for the whole EU members states.
For example: a few computer companies have a kartel on laptops. They will get a
fine from the EU because they have a kartel.
Recommandations = a advice from the EU to another country or to a company.
For example: We advice you to change your rights for female workers. The
company or country who receives the advice can chose if they are really going to
change something. The advice isn’t powerful.
Voor 90% maakt de EU onze wetten, in Brussel. In Den Haag mogen wij alleen
nog wetten maken:
- Grondwet
- Criminal Law (Strafrecht)
- Taxes (Belasting)
Court of justice  het hof Rechtsprekende macht
European Parliament  parlement Wetgevende macht
Council = Raad  Wetgevende macht
Commission Uitvoerende macht
European Central Bank  Based in Germany.
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
Judicial power
Legalization power
Legalization power
Executive power
2072480
The council
1. Section 2: Article 237-253 TFEU
2. Ministers from each member state
Example: When the union is having meetings about discrimination of women all
the ministers of social societies are in Brussels. If they are having meeting about
safety of travelling, all the 28 ministers of safety are in Brussels. There are 28
member states so always 28 ministers.
3. M-S = memberstates.
4. Legislator  they are allowed to make laws for their subject together with the
parlement. Example: safety ministers are making laws for safety. They can’t
make laws for other subjects because they don’t know enough about it.
European Commission
1. Section 4: 244-250 TFEU
2. Commissioners = commissarissen
3. Alle belangen van de EU  Fight for the EU, the interest (belangen) of the
EU.
4. Initiate laws  they cannot make laws. But if they have a new plan for a
new law they can send it to the parlement. When the parlement approved
the law, the commission is executive this law. De commissie gaat zorgen
dat het ook echt wordt uitgevoerd.
European Parliament
1. Section 1: Article 223-234 TFEU  Also TEU
(Participants  who are in there?)
2. Representatives of the Union’s citizens.
We are voting for who are representing us (the netherlands) in the EU
3. We, everyone who lives in our country. (All citizens of the EU)
4. Legislative = creating laws
Having money
Military force
The European Parliament
European council = Heads of state and head of governments (staatshoofden en
regeringleiders = Willem Alexander en Mark Rutte). Article 235 en 236. They
discuss political facts for 20 years ahead. What will the EU should look like over
20 years? They are just talking and discussing, but they are not allowed to make
laws. The European council meetings are in Brussels but it’s very informal and are
talking about other countries like China and Ukraine. Zie foto Google. Ze kunnen
dus geen wetten maken maar hopen mensen te beinvloeden met hun praatjes
zodat plannen ook daadwerkelijk kunnen worden doorgevoerd.
Case 1 ‘Alcohol case’
In France an applicable law dictated that whiskey products weren’t allowed to be
sold. Hence: No whiskey in the shops.
Is this law contrary to EU-law?
This case is about free movement of goods  article 28 TFEU and onwards.
Article 34 TFEU
Quantity = zero whiskey
Even when there was a limit of 10.000 litres, there still would be a quantity
restriction.
Variation:
French law taxes liquor made of grain heavier than liquor made of grapes. As a
result Irish exporters of whiskey weren’t happy. Why?
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
When France is doing this the original French wines are cheaper than the foreign
goods. For foreigners they have to pay an tax what makes the price for the
customer higher and they are not buying it.
So it’s unfair competition.
These variation is not a quantative restriction, but it is screwing up the market.
So you have to use article 34 and it is definitely quanitive restrictions.
Case 2 ‘Belgian packaging of butter’
Within Belgium butter has to be sold in square packages. Some producers, who
package their butter differently aren’t happy…
What’s the question?
Arrest: Walter Rau 133-136/85
The Belgium didn’t want the butter. You can’t do that. Zero quantity is article 34,
so it is forbidden.
So the Belgians made up a new law, see the slide!
This isn’t a a quantitive restrictions but it is a measure having equivalent effect.
All measures that screw up the market in an other way than quantitive, are
forbidden  article 34.
Case 3 ‘Sweden’
Within Sweden it’s prohibited to advertise for products which contain alcohol. For
whom is this a potential problem?
This is problem for companies who produce alcohol like Heineken.
Article 34  no quanititve restrictions.
no measure having equivalent effect.
This is a selling arrangement. It means that each rules for selling arrangement
(manier waarop je gaat verkopen) aren’t prohibited.
If the rule is related to a product  measure heavy equivalent effect  law isn’t
allowed
If the rule is related to marketing of a product  no measure heavy equivalent
effect  law is allowed.
International Marketing
Lesson 1
You have 4 phases.
Audit = giving your opinion about something.
Export growth  how many export does a country have?
Netherlands have a big export. Rotterdam harbour and Schiphol are very
important.
Netherlands is 6th biggest worldwide exporter.
We are a big exporter because we are import from other countries and export
these goods as soon as possible to other countries.
Why is Holland big in export?
 Culture (cheese, tulps)
 Transport
 Infrastructure (vliegveld, haven)
 Engineering (building dikes)
 Music
 Drugs
 Financial system is important  taxes are very low compared to other
countries.
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
6 competitive strength factors = you have to have these things in your own
country to export successfully.
Raw material = gas
Domestic demands = large population consumers makes it easier to export to
other countries.
National competitiveness = drives you to better products
Network = you have to have partners to develop your products.
Coincidental factors = when your company is in Europe and you sell in euros, you
lose money when you transport to US when the dollar value is low. Political
standards are important. When you have a factory in Russia right now, it’s not
good.
Governmental policy = import taxes are important.
Business strategy  as a country you want to be where western europe now is.
Export development
- as a strategy = when a company decides that they want to be a
international company.
- Follow your customer = when your customers go abroad and you don’t
have any partners there, you have to go abroad to when you want to keep
the customer.
- Competition = when the sales of your products aren’t growing any more.
Growth isn’t possible, but it is possible if you are going abroad. That’s
another reason why you want to export.
- Opportunities = low costs countries. If you have high tech productions, it
is attractive to go to low costs countries. Also when you sell unique
products  innovation and they don’t have that yet in a country.
Legalisation = when you import a car from US in Netherlands they have to
apply to our safety rules.
International strategy = Ethnocentrism = you stay in your characteristics a fully
home-based country and you export this to other countries. For example: the US
designed Barbie with the standards of the US. She was very long with blonde
hair. But these barbies weren’t sell in Africa and Asia because the standards
where different there. Centralised on one location.
EPRG Framework is the way you organise the export of your country.
Multi domestic strategy = polycentrism
Edit your product to the local standards. African Barbie, Europe Barbie, Asia
Barbie etc. this strategy is very expensive. You only do this when the demands of
every country are very different than your own market.
Global strategy = regiocentric
Example of this is MacDonalds. They are not centralised on one location. You
have MacDonalds asia, Europe etc.
Transnational strategy = the main characteristics of the different companies all
over the world are the same. There is no connection between the companies,
they work for their own. You do 80% the same way than the other companies.
But you have different expertise. One company knows more than one other and
they share this with each other. The knowledge is copied in the other companies
all over the world.
Export planning  sales
What are the products that a country is exporting?
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
Abell matrix  it gives you inside in what kind of customers your delivering to?
The function that your customers use your product for. Technologies that you
use.
The box  customers/functions/technologies out of the box is new for you. You
already use is in the box.
Overview of the organisation structure = polycentric global model.
7S model  which S do I have to change to start exporting. For example: if you
systems are very Dutch, you have to change them.
External analysis = analysing the countries that you want to export to.
- Destep, swot, TOWS/confrontation matrix,
Strategy = analysing current situation and analysing the future situation.
- 5K Porter, Anshoff, Ge/MaBa
Broad audience = massa market
Lesson 2
Part 2  number 5 = value chain  means how to organise your processes.
Example: HRM, management, marketing, logistics, financials.
When you are going to export, your inbound logistics will change a lot.
Export planning
- You have to know if you are going to have a distribution centre or not
- Buying of ingredients international or local?
Extremely important:
- Location of the activities
- You want the supply chain to be as short as possible
- How much inventory is needed? (voorraad)
- Make or buy
- Partnership
On time  if you order something on the website, you want that product on time.
Operational elements  you can see the strategy in it.
Quality = customer intimacy
Costs = cost leadership
Demand = vraag
Uncertainty = onzekerheid
What can influence the demand?
- Price
- Weather
- Culture
Products like bread and groceries have a very stable demand.
You don’t want to sell no to your customers when your strategy is customer
intimacy.
High supply uncertainly: (je moet snel al je grondstoffen bij elkaar hebben voor
productie)
- Food
- Coffee
These products are not always available for example in Africa.
Low supply uncertainly: (je moet langzaam al je grondstoffen bij elkaar hebben)
- Oil
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
-
Wood
You want to have ‘termijncontracten’ with your suppliers with an high
uncertainty.
Agile  most B2B. For example: airplane production. The demand of airplanes
very depends on the economy. You only start building an airplane if someone
gives you an order.
Efficiency = coca cola
Responsive = airplane production
Risk hedging = koffie/cacao. Vaak termijncontracten omdat oogst kan mislukken
en jij wilt garantie hebben op je levering.
Agile = Haven bouwen. (harbor)
Customer intimacy = service and marketing
Product innovation = HRM because you need the smartest people
Technology develpment
Cost leadership/operational excellence = inbound logistics, prices, procurement
(inkoop)
Push strategy = when the market is predictable.
Pull strategy = you start producing when you get an order.
Preparedness for internationalisation
Mature = a lot of experience
Immature = no experience
Prepare for a buy out  you don’t have any experience so you giving money to
another company to do it for you.
Equity = shareholder investment.
Direct = company organise it themselves.
Indirect = you need partners.
Export sales orders = website where customers can place an order. This order will
be sending to the production centre in Holland and the product will be shipped.
Local partners like agents, distributor
Joint venture = dochteronderneming, apart bedrijf! Werknemers van 2
moederbedrijven gaan samen in het dochterbedrijf. Als dochterbedrijf failliet
gaat, dan heeft moederbedrijf er geen last van  moederbedrijf niet failliet en
tast naam niet aan. Bij een jointventure is makkelijk om te verkopen. Het is een
kwestie van een aandelentransactie. Als een ander bedrijf het dochterbedrijf
koopt wordt het personeel ook meegenomen die bij het dochterbedrijf hoort en je
hebt dus ook geen last meer van het personeel. Als het wordt verkocht koopt 1
van de 2 bedrijven het vaak op en betaald geld aan de ander. Het kan ook aan
een derde worden verkocht.
Greenfield investment = je begint met niks.
Acquisition = je koopt een al bestaand bedrijf.
At your own subsidiary setup:
- Your 100% in control
- The risk is higher
Joint venture:
- Less risk
- 50% in control
When you want to go abroad, some countries may have protectionistic
legalisation. This means that a foreign business can’t have their company in for
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
example USA. When you buy an already existing company and change it to your
company, the government can’t say you’re breaking the law and that’s legal.
The risks on the other sheet may influence the way you organise your export
market entry strategy.
Different models to organise your company
- exporting
- contract management
- joint venture
- etc.
it gives you a image of the supply chain for every different company.
Spider diagram
You can give the aspects a number from 1 to 5.
5 = very good
1 = very bad
0.10/0.15 = the importance of every aspect.
This company has a low risk at market growth and strategic horizon.
High risk at country stability and product specificness.
The nearer to the company (the middle), the better it is.
Further from the middle is bad.
Lesson 3
Market segmentation has different sides.
Weak market segmentation is:
- 18-25 years
- 26-45 years
- 26-40 years
- 41-55 years
- over 55
Good market segmentation is:
- Technically inquisitive
- Packaging is everything
- Influenced by peers
- Love being different
- Cynical and frugal
Use the StP model for market segmentation.
S = market segmentation
T = market targeting
P = product positioning
Another model: three levels of product
1. Core product = just the product
2. Actual product = core product plus the packaging, quality and styling.
3. Augmented product = core product plus actual product plus installation
and delivery.
Marketing framework  the 4 P’s and C’s = unique selling points!
Product  Costumer = costumer wants and needs
Price  Costs = total costs
Place  convenience = buying preference and distribution
Promotion  communication = interactive, relationship development
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480
Channels for consumer products
Direct channel = from producer to consumers without retailers or wholesalers.
Retailer channel = producer – retailers – consumers
Wholesaler channel = Producer – wholesaler – retailers – consumers
Agent/broker channel = producer – agents or brokers – wholesalers – retailers –
consumers.
Lesson 4
Incoterms is not part of the exam.
Letter of credit = A bank is between buyer and seller. The buyer makes sure that
the money is one time at the bank. The seller only gets his money if the buyer
send a signal to the bank that he received the products.
Best case scenario – minimum case scenario – worst case scenario
CRM = Customer relationship management
Very important for export planning.
Highly automated = you have all kinds of CRM systems.
Essence of export planning  4 questions you need to ask yourself before you’re
going to export.
These are the questions you have to apply to the case
Bettine Post
Avans Hogeschool ’s-Hertogenbosch
2072480