International Business I Prepared by:NOR DIANA AMERI ( )

Exporting Send a firm’s products or services to international destinations. Indirect: without the firm’s ultimate involvement Cost  CEM (ads), MEA (no ads, own name) Direct: Import without intermediaries  Export department. Export Sales Subsidiary END

Countertrade Arrangements in which the flow of goods and services in both directions is the core of the transaction. Pure Barter: acceptance of goods or services as payment. (sugar for oil) Swith trading: three or more countries. Counterpurchase: Country A exports to Country B in return promises to spend some or all of the receipts on imports from B. No details, specific time (2 or 3 years) Buyback: requires a company to provide machinery, factories, or technology and to buy products made from this machinery over an agreed period. Offset: a foreign supplier is required to manufacture/ assemble the product locally and/or purchase local components as an exchange for the right to sell its products locally.

Contract manufacturing Contractual agreement between a company and a foreign producer under which the foreign producer manufactures the company’s product. The company controls promotion and distribution. Pharmaceutical industry.

Licensing In this agreement, the international company, the licensor, agrees to make available to another company abroad, the licensee, use of its: Patents and trademarks Manufacturing process Know-how Trade secrets Managerial and technical services.

Franchising Is a form of licensing. Transfer of technology, business system, brand name, trademark and other property rights. Franchisor: developed the business, lends the names and brands. Franchisee: buys the rights (fees or royalties) to operate the business under the name of the franchisor.