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Global Imports and Exports

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A business is generally founded in one country producing a good or service from the acquisition of raw materials to the finalized product through process of manufacturing the item. Once a company has established its self domestically profit margins begin to narrow and the firm will look to other sources for financial capital. Once of which-is through the economic strategy of Exportation. When a business exports there good there in seek of larger revenue and profit gains through opportunity’s that can only be found in a foreign market. Expansion will bring many benefits to a business that will lower the unit costs such as providing a firm with economies of scale. Marlin Co. a manufacture who produced wired baskets had decided to go international venturing into foreign markets in the mid 2000’s. During the 2008 recession the business had only generated about 5 % of profit from exports. In 2010 the US government strongly urged domestic business to begin exporting goods and by the end of year Marlin Co export profits had accounted for 17% of the business transactions. Marlin Co. had taken several measures to insure success before dabbling in a foreign market. Starting with identifying specific foreign market opportunities, acquaint themselves with export/import mechanics, and understand the dangers of foreign exchange risk. When completed successfully a business can make an impact of the foreign market leveraging its product, design, technology, and manufacturing skills. Typically domestic firms are unadventurous in foreign markets due to uncertainty. Many medium and small firms don’t know of the large opportunity’s that await them. Smaller companies tend to be afraid of the formalities and complexity of the trades that involve new cultures, languages, practices, traditions, and legal systems. As a result, a national data census displays that, “exporters still only account for a tiny percentage of US firms, less than 5% of firms with fewer than 500 employee,” according to the Small Business Association. (Hill 2014 293) Initial Problems Many businesses do not tend to have a deep understanding when beginning to venture internationally. As they begin the process different issues arise at different times. Each influences the profit margin and determine

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