International Business Lecture No,45 By Dr.Shahzad Ansar

–Other strategic concerns include: Global concentration—only a few major players in a global industry Global synergies—sharing functional expertise with overseas operations Strategic motivations—reasons for exporting –Other strategic concerns include: Global concentration—only a few major players in a global industry Global synergies—sharing functional expertise with overseas operations Strategic motivations—reasons for exporting

EXPORT & IMPORT Characteristics of Exporters –Companies that export: More likely to be large (as defined by revenues) Are more likely to have risk- taking managers Operate in industries where the leading companies Characteristics of Exporters –Companies that export: More likely to be large (as defined by revenues) Are more likely to have risk- taking managers Operate in industries where the leading companies

EXPORT & IMPORT Why companies export Increased sales revenue most important motivation to export Alleviate excess capacity Exporting less risky than FDI Countercyclical investment diversification Why companies export Increased sales revenue most important motivation to export Alleviate excess capacity Exporting less risky than FDI Countercyclical investment diversification

EXPORT & IMPORT Stage of export development— three broad phases Stage unrelated to size of the company Availability of Internet has increased company interest in exporting Stage of export development— three broad phases Stage unrelated to size of the company Availability of Internet has increased company interest in exporting

6 Preengagement Companies selling goods and services solely in the domestic market Those companies considering but not currently exporting Phase 1 Initial Exporting Companies that do sporadic, marginal exporting Companies that see lots of potential in export markets Companies unable to cope with exporting demands Phase 2 Advanced Companies become regular exporters Companies gain extensive overseas experience Companies may use other strategies for entering markets Phase 3 Phases of Export Development

7 Structure of an Export Business Plan I. Executive Summary II. Business History III. Market Research IV. Marketing Decisions V. Legal Decisions VI. Manufacturing and Operations VII. Personal Strategies VIII. Financial Decisions IX. Implementation Schedule I. Executive Summary II. Business History III. Market Research IV. Marketing Decisions V. Legal Decisions VI. Manufacturing and Operations VII. Personal Strategies VIII. Financial Decisions IX. Implementation Schedule

Pakistan Exports Cotton Fabrics :- Export of Cotton Fabrics came up to $ Billion from $ Billion in the year as compared with showing an increase of 9 % in A.U.P. However a decrease of 0.4% is recorded in Quantity which came down to Million Sqm. From million Sqm. Major buyers of the product were USA, Turkey, Hong Kong, U.A.E. and Italy. Cotton Fabrics :- Export of Cotton Fabrics came up to $ Billion from $ Billion in the year as compared with showing an increase of 9 % in A.U.P. However a decrease of 0.4% is recorded in Quantity which came down to Million Sqm. From million Sqm. Major buyers of the product were USA, Turkey, Hong Kong, U.A.E. and Italy.

Garments :- Export of Garments increased by 11%, contributed 18.9% in the total Pak export during Hosiery went up to $ 1635 Million in the period under review as compared $1459 Million in last year. Upward trend was witnessed in exports to USA, Garments :- Export of Garments increased by 11%, contributed 18.9% in the total Pak export during Hosiery went up to $ 1635 Million in the period under review as compared $1459 Million in last year. Upward trend was witnessed in exports to USA,

Ready Made Garments; An increase of $94.6 million i.e. 9.5% is recorded in the export of the readymade garments. Rice went up to $ million from $ million showing an increase of 47%. Ready Made Garments; An increase of $94.6 million i.e. 9.5% is recorded in the export of the readymade garments. Rice went up to $ million from $ million showing an increase of 47%.

Leather and Leather Products Showing an increase of 26%, exports of Leather and Leather Products went up to $ Million from $ Million. Leather Gloves; Registered an increase of 132.4% from $ 70.7 million of the previous year to $164.3 million. Leather and Leather Products Showing an increase of 26%, exports of Leather and Leather Products went up to $ Million from $ Million. Leather Gloves; Registered an increase of 132.4% from $ 70.7 million of the previous year to $164.3 million.

Surgical Instruments; The exports, which were $ Million in came up to $ Million in , showing an increase of 38%. Sports Goods; From $ 325 Million in the exports came down to $ 307 Million in , showing a decrease of 5.4%. Surgical Instruments; The exports, which were $ Million in came up to $ Million in , showing an increase of 38%. Sports Goods; From $ 325 Million in the exports came down to $ 307 Million in , showing a decrease of 5.4%.

EXPORTS $8.1bn $8.7bn $8.3bn $8.6bn $7.8bn $8.1bn $8.7bn $8.3bn $8.6bn $7.8bn

Pak Total Exports Total Exports US$ Billion Total Increase US$ Billion Total % Increase 21% Exports as % GDP 17% % World Trade 0.17% 5 years Compound Growth Rate 5 Pak Total Exports Total Exports US$ Billion Total Increase US$ Billion Total % Increase 21% Exports as % GDP 17% % World Trade 0.17% 5 years Compound Growth Rate 5

Export Growth Comparison with selected countries COUNTRIES CAGR JAPAN 0.76% MALAYSIA -1.75% KOREA 0.88% PHILIPPINES 6.25% INDIA 6.85% CHINA 9.84% USA 0.88% UK 0.77% SINGAPORE -0.65% PAKISTAN 5% COUNTRIES CAGR JAPAN 0.76% MALAYSIA -1.75% KOREA 0.88% PHILIPPINES 6.25% INDIA 6.85% CHINA 9.84% USA 0.88% UK 0.77% SINGAPORE -0.65% PAKISTAN 5%

Exports at a Glance Value in Million US$

IMPORT EXPORT JULY- OCT EXPORTS 5,552 IMPORT 9, JULY- OCT EXPORTS 5,552 IMPORT 9, JULY- OCT 5,478 8, JULY- OCT 5,478 8,877

FDI IN PAKISTAN Foreign Direct Investment (FDI) has been recognized the most powerful and strategic weapon for transforming a traditional economy of a nation into a modern economy by accelerating the pace of growth and development.

FDI Pattern of FDI Inflows: Till the end of December 2003, Pakistan had attracted a amount of FDI, US $ 227 million. By the end of December 2004 the total FDI inflows to Pakistan amounted to US $ 445 million, which is higher by 96 per cent over the figure of 2003.

FDI Official figures released by the State Bank showed that up to September 2002, in(2006), an investment to the tune of $ million flew into Pakistani stocks.

During July-August , FDI reached $375.4 million against $230.8 million during the corresponding period last year, showing a rise of 63 per cent