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Chapter 7
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7.1 Introduction
Figure 7.1 shows how a foreign manufacturer may use both direct and
indirect forms of export.
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7.2 Indirect export
A given company may both use indirect export and also have
a dependent organization (e.g., export department)
in the company working with independent marketing organizations.
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7.2.2 Home country based merchants
Export merchants:
do all steps except product & package modification; not available in all
markets; deal primarily in staple commodities (page 278); may be
more powerful than client companies.
Trading companies:
a type of export merchant.
Various types in various countries: Table 7.1.
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7.2.3 Home country based agents
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7.2.4 Evaluation of independent
marketing organizations
Advantages:
inexpensive to start;
foreign expertise;
build up volume quickly;
good for out-of-the-way markets.
Potential drawbacks:
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7.2.5 Cooperative organizations
Piggyback marketing:
Exporting combinations:
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7.3 Direct export
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7.3.1 Home-country-based department
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7.3.2 Foreign sales branch
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7.3.4 Foreign sales subsidiary
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The travelling salesman problem is an optimization problem.
Therefore it is not sufficient to find an arbitrary solution.
Instead, one is interested in the best solution.
The travelling salesman problem is quite simple:
a travelling salesman has to visit customers in several towns,
exactly one customer in each town.
Since he is interested in not being too long on the road, he wants to take
the shortest tour. He knows the distance between each two towns he
wants to visit.
The picture shows two possible tours for an example with five cities. For
such a small example the problem is easy to solve. But examples with
100 or 1000 cities show that a systematic search for a solution is very
expensive.
So far, nobody was able to come up with an algorithm for solving the
travelling salesman problem that does not show an exponential growth of
run time with a growing number of cities.
There is a strong belief that there is no algorithm that will not show this
behaviour, but no one was able to prove this (yet).
But one was able to prove that the travelling salesman problem
is a kind of prototypical problem for a big class of problems
that show this exponential behaviour.
This is the reason why many research groups are interested
in the travelling salesman problem, since techniques,
developed for this problem,
can be transferred to other problems of this class. 14
Some travelling salesman-clips:
http://nl.youtube.com/watch?v=SXJDb95P1_0
http://nl.youtube.com/watch?v=n6TccGP9LOM
http://nl.youtube.com/watch?v=2Y-HP-qG4e0
http://nl.youtube.com/watch?v=zUBxZqozriY
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7.3.6 Evaluation of dependent organizations
Benefits:
full return on sales, protection from neglect, gain knowledge,
permanency, protect goodwill, costs decrease with volume.
Potential drawbacks:
costs and risks, may be difficult to obtain specialized knowledge,
volume may be slow to build.
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7.3.7 Foreign based distributors &
agents/representatives
Franchise gives holder the right to use brand name and trademark
under certain conditions; given for a specific territory.
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7.3.8 Relations with foreign-based
distributors and agents
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7.4 The Internet and e-commerce
See also:
Some aspects
and impacts
of e-commerce
explained.pdf
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From
traditional
to
e-business
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Future of e-business
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7.5 Gray market exporting
Gray market channels are those, which have not been authorized
by the exporter: see Figure 7.3.
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Summary
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