《I-Marketing》 南京大学mkt5.ppt

International Marketing Chapter 5 The Financial Environment  Credit PolicyCredit availability determines sales and the size of sales abroad is determined by: -firm-specific factors such as size, experience in international trade, capacity for financing transactions -degree of economic development -factors related to particular transaction The Credit Policy Allows the Exporter To: Determine the extent of risk they are willing to absorb. Explore new ways of financing exports. Prepare for a changing environment. Types of Financial Risk Commercial risk Political risk Foreign exchange risk Commercial Risk Reasons of Commercial Risk: Internal changes in the firm Loss of a key customer Cash flow problems Natural disasters Slow payment by government buyers Political Risk Foreign Exchange Risk Sources of Financing Commercial Banks Forfeiting and factoring Official trade finance Private sector export trade insurance Sources: Commercial Banks Sources: Forfaiting: exporter receives cash at the time of shipment via third party. The exporter receives promissory notes and receives cash from a third party which buys them at a discount. Factoring: purchase of exporter’s receivables at a discount Official Trade Finance-takes place either as a loan or a guarantee provided by govt. Pre-Export Support Export Credit Insurance Official Trade Finance The Export-Import Bank (Ex-Im Bank) “to aid in financing and facilitating exports” Official Trade Finance Pre-export Support the Working Capital Guarantee Program (WCG) guarantees the lender against default by exporter Official Trade Finance Export Credit Insurance meets the exporter’s need to offer credit terms to foreign customers Export Credit Insurance Multi-buyer Policies may cover short- or medium-term sales or a combination of both Single-buyer Policies exporters select the sales they desire to insure Guarantees Medium Term Guarantees transactions up to $10 million repayment term not to exceed 7 years