Mid Semester Assignment: Submitted To:-Mona Ratnesh

MID SEMESTER ASSIGNMENT
Submitted To :- Mona Ratnesh
Submitted by:-
Name :- RIYA PRABHAVI
Enrollment No. :- A36106419120
Batch:- BBA(2019-22)
Sem:- IV Sec:- B
Course Code:- IB303
Q1. Define the term Export? Enlist benefits arising from export.
Ans:-
Export are the goods and services produced in one country and purchased by residents of
another country. It doesn't matter what the good or service is. It doesn't matter how it is sent.
It can be shipped, sent by email, or carried in personal luggage on a plane. If it is produced
domestically and sold to someone in a foreign country, it is an export.
Benefits arising from export are:-
1. Standard of Living:-
Governments encourage exports. Exports increase jobs, bring in higher wages, and
raise the standard of living for residents. As such, people become happier and more
likely to support their national leaders.
2. Foreign Exchange Reserve:-

Exports also increase the foreign exchange reserves. Foreigners pay for exports either
in their own currency or the U.S dollar. A country with large reserves can use it to
manage their own currency's value. They have enough foreign currency to flood the
market with their own currency. That lowers the cost of their exports in other
countries.
3. Greater Variety of Goods Available for Consumption:-

International trade brings in different varieties of a particular product from different
destinations. This gives consumers a wider array of choices which will not only
improve their quality of life but as a whole it will help the country grow.
4. Efficient Allocation and Better Utilization of Resources:-

Efficient allocation and better utilization of resources since countries tend to produce
goods in which they have a comparative advantage. When countries produce through
comparative advantage, wasteful duplication of resources is prevented.
5. Promotes Efficiency in Production:-

International trade promotes efficiency in production as countries will try to adopt
better methods of production to keep costs down in order to remain competitive.
Countries that can produce a product at lowest possible cost will be able to gain larger
share in the market.
6. More Employment:-
More employment could be generated as the market for the countries’ goods widens
through trade. International trade helps generate more employment through the
establishment of newer industries to cater to the demands of various countries. This
will help countries to bring-down their unemployment rates.
Q2. What are the different modes of entry in foreign market?

Ans:-
There are several options for a firm that decides to expand outside its domestic market and
compete globally. Various modes of entry:-
1. Indirect Exporting:-
Indirect exporting is an alternative to direct exporting which may not be possible in
the case of all exporters. In indirect exporting, the exporting firm will prefer to export
to the target market through marketing middlemen such as merchant exporter, export
houses, trading houses or through co-operative or government agencies.
2. Direct Exporting:-
Direct exporting means exporting the products by the manufacturer himself i.e.
without using the services of middlemen like merchant exporters, Export houses etc.
A manufacturer exporter can undertake direct exporting of his products in the target
market through his export department or division.
3. Joint Venture:-
A business firm may enter into a joint venture with foreign firms as the main strategy
for entry in foreign markets. Joint ventures have several advantages over other
strategies. The firm can easily adapt to cultural variations in foreign markets with the
help of its overseas partner. Also, the foreign partner may have well established
distribution network. In other words, there would be less risks and need for less
investment due to the support of foreign partner.
4. One Country Production Base:-

A firm may maintain one country production base. Preferably in the domestic market,
due to various locational advantages such as low cost labor, or availability of cheap
materials. However, the distribution could be done in several world markets. For
distribution, the firm may use either company owned distribution channels, or foreign
controlled distribution channels.
5. Franchising Strategy:-
Franchising is a form of licensing in which a parent company the franchiser permits
another independent entity (franchisee) the right to do business in a prescribed
manner. This right can take the form of selling the franchiser’s products, using its
name, production and marketing techniques or general business approach.
6. Licensing:-
Under international licensing a firm in one country (the licensor) permits a firm in
another country (the licensee) to use its assets such as Patents, Trademarks.
Copyrights, Technology, Technical know-how, marketing skills or some other
specific skills. The monetary benefit to the licensor is the royalty or fees, which the
licensee pays.
7. Contract Manufacturing:-
Under contract manufacturing, a company contracts with firms in foreign countries to
manufacture or assemble the products while retaining the responsibility of marketing
the product. This is a common practice in the internationals business.
8. Acquisitions:-
It involves purchasing another company already operating in a foreign country market
where the firm wants to enter. Synergetic benefits can result if the firm acquires a unit
with strong goodwill and a good distribution network. Research indicates that a
wholly owned subsidiary is more successful in international markets as compared to
joint ventures. However, proper information must be obtained before acquiring a
foreign firm.
9. Turnkey Contracts:-
In case of turnkey contracts, a foreign company plans and constructs a project and
hands it over to the government or a domestic private company for execution. Such
practice is common in oil, steel, cement and fertilizer sectors.
10. Green-Field Development:-

Firms may go green field development project. It involves setting up manufacturing
plant and distribution system in other countries. It allows a firm more freedom in
designing the plant, selecting its own workforce and choosing right suppliers and
dealers. This strategy has been followed by many firms such as Honda, Toyota and
Nissan etc.
Q3. Explain the need of Export Management ?
Ans:-
Earning foreign Exchange:-
Export management enables the country to earn foreign exchange. The foreign exchange can
be utilized for following purposes.
Import of consumer good
Imports of Raw materials, spares and components
Import of capital goods technology
Servicing of External Debts.
International Relations:-
Export helps to develop international ties with importing countries due to the following
reasons:-
a) The international trade brings together the exporters and importers of various
countries.
b) Trade talks take place between nations at international forums like WTO.
c) Also, trade agreements are singed between Governments of participating counties.
Balance of payments:-
A country’s external economic strength depends upon its balance of payment position.
Naturally, every country would like to have a strong and favorable balance of payments
position since exports bring in foreign exchange, it helps a country to solve and improve its
Balance of payments position.
Employment:-
Exports help to generate employment in the country Export facilitates.
a) Direct Employment in the export sector
b) Indirect Employment in the supporting sectors such as banking, insurance, transport
etc.
Increase Production Capacity:-

For every business unit increase production is necessary, in order to meet domestic demand
and export order. Exports are possible when surplus production is available after meeting
domestic demand.
Organizational Efficiency:-
Export management enables a firm to improve its organizational efficiency. E.g. firms have
to emphasize on training and development of employees. This helps to improve knowledge,
attitudes, skills and social behaviors. Therefore, the over all efficiency of the organization
improves due to training, research and other much activities which are encouraged by export
management.
Economies of Scale:-
Because of increase in export there will be large scale production and distribution. This will
result in
I. Economies of large scale production like discount in bulk purchase of material and
reduce cost.
II. Economies of large scale distribution such as freight concession on bulk shipment of
goods.
Imports are liberalized:-

Business organization exporting on a large scale collect huge foreign exchange which can be
utilized for the import of new technology machinery and component. This also raises their
competitive capacity.

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MID SEMESTER ASSIGNMENT

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2. Foreign Exchange Reserve:-

3. Greater Variety of Goods Available for Consumption:-

4. Efficient Allocation and Better Utilization of Resources:-

5. Promotes Efficiency in Production:-

Q2. What are the different modes of entry in foreign market?

4. One Country Production Base:-

10. Green-Field Development:-

Increase Production Capacity:-

Imports are liberalized:-

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