Advantages of Direct Exporting. The chapter begins by looking at the concept of market entry strategies within the control of a chosen marketing mix. Indirect exporting costs money, taking away from the bottom line, but it frees up time and management resources and makes them available for creating more and better products. It then goes on to describe the different forms of entry strategy, both direct and indirect exporting and foreign production, and the advantages and disadvantages connected with each method. Remember that the process of economic globalization has allowed countries to become more interconnected and interdependent toward one another. Indirect export means you appoint third parties, like agents or distributors, to represent your company and your products abroad. Local selling support and services available. transfers: we shall discuss the advantages and disadvantages . Core competency is a factor which gives you competitive advantage over others. Here are the methods of indirect exporting, including the distinction between an export management and export trading company. International market entry strategy along with advantages & disadvantages of using different modes of entry to pursue opportunities in foreign markets. of licensing (T able 12.4). Indirect exporting carries lower risk to the company in general, but direct exporting is recommended for companies that expect international marketing to become a significant part of their operational strategy. (b) Discuss advantages and disadvantages of [10 marks] using direct taxes as a method to redistribute income. 1. Forms of exporting include: indirect exporting; direct exporting; and intra-corporate . Shorter distribution chain (compared to indirect exporting). Goods are defined anything that is capable of monetary valuation - Commission v Italy Article 26 TFEU - aims for a single market on the basis of the freedoms Article 34 TFEU - QRs and MEQRS shall be prohibited between MS. Has direct effect (both horizontal and vertical as it is a Treaty Article) Article 35 TFEU - Similar prohibition as Art 34, on exports The questionnaire has great potentialities when it is properly used.. 2. . Advantages and disadvantages of policies Strengths and weaknesses of fiscal, monetary and supply-side policies Fiscal policy - strengths. The level of dependence of a target country determines the impacts and limitations of sanctions. Disadvantages of Each. Choosing an indirect approach to exporting, a business can often reduce the risks associated with trading internationally. If the problem is one of unemployment, changes in taxation and particularly government spending may have a significant impact on the level of national income through the increase in aggregate demand that they cause. Cows roam freely in India, and that can be a problem for coconut coir manufacturers, as coco coir can easily be contaminated with animal manure. Perhaps the biggest disadvantage of contract manufacturing is a lack of direct control over the quality of the final product. [15 marks] 11.2 (a) Referring to the difference between equity and equality, explain why the market system 11.11 (a) Explain some causes and consequences of may lead to an inequitable distribution of poverty. Comparative advantage is an economic law referring to the ability of any given economic actor to produce goods and services at a lower opportunity cost than other economic actors. Disadvantages of Direct Export: Globalization supplements either the advantages or disadvantages of economic sanctions. Although you can certainly gain a lot from running a direct export business, there are also a couple of cons to be aware of: Advantages of indirect exporting. Advantages of Direct Export: Access to the local market experience and contacts to potential customers. It's an almost risk-free way to begin. Direct exports eliminate the export companies and most intermediaries, allowing for direct marketing and maximum profit. Disadvantages of direct exporting. More control over marketing mix (especially with agents). A) opportunity costs Advantages . 9) The informational, political, and cultural disadvantages that foreign firms face when trying to compete against local firms in the host country market are referred to as _____. Core competencies exist in companies which have a factor central and unique to their business. Fiscal policy It is an economical way of accumulating information of significance from international marketer.. 3. Examples of core competency are home delivery in case of Dominos, or Innovation in case of Apple and Google.Your core competency is always defined when compared with others. and disadvantages of the methods of penetration in the international market. Disadvantages or Limitations of Direct Exporting: Disadvantages of direct exporting are as follows: 1. Consider a small open economy which is importing a good at the world price. Keywords: market penetration, globalization, export, import, foreign investment, advantages and disadvantages. Thus, direct exporting is more advantageous than the indirect exporting, provided the firm is financially sound to organise the direct exporting. It demands minimal involvement in the export process. More Capital Needed: The United States is a major exporter of: a. bauxite; b. diamonds; c. corn; d. coffee; e. gold. Disadvantages of Contract Manufacturing . Advantages Of Export Exporting is one way of increasing your sales potential Increasing sale& profits Reducing risk and balancing growth Sell Excess Production Capacity. In America and Japan most of the companies are using this strategy for exports. The hiring company can't manage what goes on day to day, and it might not get exactly what it wants on a consistent basis. Whichever mode of exporting you choose, make sure you lay down your arrangements in writing. When the respondents are scattered far and wide, it will be a better tool as compared to the tools like interview or observation.