9.10 Summary
In this topic we looked at the practical and psychological or power distance problems faced by exporters seeking new export opportunities. Government and private agencies can assist small and medium sized enterprises through their networks and research activities; large MNEs generally do their own research into new markets. However, regardless of their size, managers of international businesses must overcome cultural and language barriers if they are to succeed.
A 14-step process in an export-import transaction was presented not for you to memorise, but to give you insight into the complexities of even a simple transaction.
Assistance to exporters was discussed and you were given Activity 9.6 as a practical exercise in finding sources of assistance to exporters in your country.
Finally, this topic looked at five types of countertrade, a substitute for free trade when one country (or both) lacks the foreign exchange to pay for goods. The five types are:
- barter - the direct exchange of goods between two parties;
- counterpurchase - a reciprocal buying agreement, not a direct exchange of goods;
- offset - a device to allow the importing country to make part of the product so as to minimise the impact on the balance of payments;
- switch - a barter arrangement involving a third (or more) party in the chain of goods swapping until all parties have products they can use or convert to cash; and
- buyback - the export of a technology package, the construction of a project, or the provision of services. the buyer pays by delivering a share of the output.
This chapter has dealt with the processes of exporting finished goods. In Chapter 10 we investigate the ways and means of the production of those goods.
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