Internet Exercises


1			Countertrade Why Countertrade? 1. The world debt crisis has made ordinary trade financing very risky. - large banks and financial institutions are "risk adverse" in many of the hostile regions of the world opening to trade 2. Many countries cannot obtain the trade credit or financial assistance to pay for desired imports. - the IMF and World Bank are increasingly restrictive in the way they allow governments to operate 3. Countries are increasingly returning to the notion of bilateralism as a way to reduce trade imbalances. - some multilateral blocks have developed - but politics is easier on a one2one basis - so many nations find it easier to cur deals directly with another single country 4. Countertrade is often viewed as an excellent mechanism to gain entry into new markets. The party receiving the goods may become a new distributor, opening up new international marketing channels and ultimately expanding the market. - especially where 4X problems are challenging to solve 5. Providing countertrade services helps sellers differentiate its products from those of competitors. Investigate the various ways countertrade is developing in the later years of the first decade of the new millennium How did Pepsi break into the market in Russia with countertrade? http://www.barternews.com/approach_marketing.htm From http://www.witiger.com/internationalbusiness/countertrade.htm From http://www.londoncountertrade.org/index.html




2			There is a revolution of sorts taking place in export financing. After centuries of relying on physical paperwork to facilitate export and import transactions, some companies are now turning to the Internet, and using electronic paperwork instead. One of the companies leading the way is Neptune Orient Lines (NOL). The Singapore-based shipping company is at the forefront of the effort to eliminate the paper-based shipping process, and replace it with a Web-based application instead. NOL's American President Lines (APL) has moved 38% of its customers to an electronic system for their bills of lading and letters of credit. The shift to electronic paperwork has released employees from the tedious paper-pushing involved with the traditional multiple copies of paperwork process, and instead allowed them to concentrate on value-enhancing activities such as sales support and problem-solving. All told, the move to utilize the Internet to enhance the company's operations has allowed APL to increase its shipment volume by double-digits while at the same time, dropping costs by some 20%. NOL views its shift to Internet-based paperwork not as e-business, but rather simply business. See http://www.nol.com.sg/ Look at APL's site (www.apl.com) and explore the companies' operations further. Discuss how NOL and APL have integrated the Internet into their operations. Then, consider what the companies' efforts mean to customers. Instead of having to physically speak with an APL representative regarding their shipments, customers can now access the Web interface that APL established and check the status of their shipments 24/7. What are the advantages and disadvantages of this strategy? As an importer, how do you feel about Internet-based letters of credit? Do your feeling change if you are an exporter? Are there occasions when a traditional paperwork trail is still necessary? Source: "Business' Killer App: The Web," Businessweek Online, 4/15/02.

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