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The role of governments role in influencing the ability of firms to compete internationally or are they a hindrance.
The government acts as a representative of the nation in all matters that pertain to their relationship with the external world. Business is one of the key factors through which international relations are built. It is hence the role of the government to sell its business units to the world to foster economic growth. International trade is one of the key factors that determine how economically stable a nation would be. Whether the business unit involves government parastatals or private business units, it will have a positive implication on the economic growth of a country. Apart from the job opportunities that most people are likely to benefit from, some levies are charged on goods as well as the units that benefit government projects. Despite the desire that every government has to foster economic growth by promoting international trade, they are usually forced to put measures that will minimize on what is brought and sent out of the country (Nelson, 2000). This is done in consideration of public interest and for the purpose of encouraging and promoting local trade.
The government has the ability of looking at the state of international market carrying out a number of forecasts. This can be translated into advice which can be given to local firms which will in turn boost their ability to carry out international trade. The government, through a number of local and international trade seminars can be able to enlighten firms on international standards on export goods (Akhile, 2006). Most local firms loose a chance for their products to be considered in international trade due to their poor quality. They are basically informed of the requirements that need to be met when producing and packaging goods for export purposes. Most of the local entrepreneurs don't know how to gauge the quality of a product basing on the raw materials used. They mix up everything and come up with a product with the hope that it will be recognized on the international market. They are however disappointed when the products are gauged and found to be of law quality and hence not worthy to be exported.
The government hinders the ability of such firms to engage in export trade by denying them the opportunity to gain such knowledge. There are a number of seminars that are organized across the continent to empower traders on how to produce quality products. It is through these seminars that traders are made aware of the quality standards that are required for their products. There is however a number of governments that ensures a good representation to such seminars. They assist by sponsoring representatives as well as encouraging them to participate. Since the seminars are done at certain intervals, there is usually a need for the government to give every firm participating or desiring to participate in international trade an opportunity (Hooper & Graham, 2010). The few representatives are encouraged to pass the information obtained to other firms so that they also gain from the same. Apart from such international seminars, the government may also organize local seminars and invite speakers that are more informed about international trade requirements. This will boost the knowledge of local firms who will apply the same to enhance the quality of goods produced.
The government also plays an important role of marketing its firms to the international business world. The government through its various representatives makes visits to other states either to attend to functions or simply through a courtesy call. Most of them usually take advantage of such forums to present to the international community what they have as a country. They will give a vivid explanation of the products and their importance to them. Through such meetings, business ties may be enhanced which many subsequently lead to signing of trade agreements. The trade agreements give the countries concerned an export and import advantage. They also together agree on how they will carry out trade without having to subject their members to excessive charges (Weiss, 2007). Different firms from such countries will also have an opportunity to organize forums and get to learn from each other. They get to share ideas on what they can do to improve on the quality of their products and enhance their level of competition with other international products.
Reasons why goods may be damaged or lost in an export/import transaction and the options available to exporters and importers for minimizing such losses
An export and import transaction may turn to be complicated due to a number of channels that they have to go through. Damage and loss may be caused by the mode of transport used or the people that are involved in the transactions. People that are involved in international trade may barely know each other and mainly get to communicate through, phone or emails (Manresa, 2009). Due to the difference in cultural inclinations and language barrier, the message may not be conveyed appropriately and hence causing confusion even as the products move from place to place. Below are some of the reasons that may lead to such inconveniences;
Mode of transport used
The mode of transport used may cause goods being exported or imported to get spoilt due to distance. Due to the inconveniences that come with sea, air or road transport, the goods may reach to their destination later than they were expected. Transport may be affected by bad weather, mechanical problems or traffic. There are also instances of pirating, car and plane jerking which may cause the goods to be damaged or lost (Harvey, 1922). Depending on what the transport vessel is carrying, they may be encountered by pirates on the way who may either still the goods or delay them and hence making them to get spoilt. There may also be a fight between the pirates and those transporting the goods that may cause a lot of damage to the goods.
International trade involves people from diverse communities who speak a different language. This may also affect they way they write and also interpret some words and statements. People engage in transactions with the confidence that they have understood each other just to realize that the recipient interpreted the message differently. The information may also pass through various channels and individuals, which may tamper with the original message. In cases where there is a difference in the language used, individuals may choose to involve interpreters to convey the message. When the message is interpreted in various languages it losses its original meaning and hence affecting the transportation of the products (Mankiw, 2008). The products will end up being lost or being destroyed as people figure out where and how it was to be delivered.
Culture has to do with the way of life of certain people, which has an effect on international trade. It is usually required for exporters and importers to carry out a through research on the culture of the people before transporting there products. Depending on the way the research has been conducted, it may not be adequate to reveal enough information about the people. They hence transport their products with the hope that they will find a ready market for it. They are however surprised when the people rejects their products simply because they will have an effect on their cultural standing. They may either despise the products basing on the culture of the community where they came from or because their culture does not authorize the use of such products. In the process of such arguments, the goods may be spoilt or simply get lost (Rai, 2007). There is also the issue of where the products have to go through a number of procedures before they are allowed in a state. The procedures are usually to test whether the products meet the required standards or if they are really needed in the country. Such procedures may take quite sometime or rather yield negative results and hence being destroyed. The transporters may not have good storage facilities in their country of export which may expose them to thugs and poor climatic conditions.
Remedies to such inconveniences
Damages and loss of goods on the international market can be minimized if exporters and importers could take their time to learn their trade environment. They should not rely on the secondary information they obtain from the media, as it may be outdated and hence unreliable. The environment is usually subject to change with the changing times, which in turn affects the tastes and preferences of the people. By clearly learning such an environment, they will be saved of the inconveniences that come with language barriers and cultural differences. It will help them know what to export for sale and at what season. The traders also need to liaise with the local authorities prior to transporting their goods. This will guarantee them of security as well as be informed of the kind of products needed and at what standards. If the traders are dealing in perishable products, they need to be guaranteed of the transport mode that they will be using. They need to package their products well in advance and ensure that they are dispatched to their destinations earlier. It will also be important for them to have a clear estimate of the market of their products before they are dispatched. They should liaise with the prospective intermediaries and consumers to see how much of the products will be needed (Cook, 2004). This will save them of the inconveniences that come with transporting more products than it is actually needed.
Challenges, opportunities, and limitations faced by exporters and importers due to the increasing use of e-commerce and internet marketing
E-commerce and internet marketing are some of the technological developments in international trade. It enables traders from all spheres of the world to interact and hence sharing a lot in business terms. Through e-commerce, a trader will be connected to other traders all over the world that deal in a desired line of business. It is has become popular due to its convenience and the fact that people do not have to travel to engage in transactions. It has even made it possible for people to sign documents online and carry out their business without having to incur many costs. Traders also have an opportunity to view the profiles of people they desire to engage in business with and choose from the variety of options that are available to them. They can also gather a lot of information about a certain company and hence engaging in the business without having to worry much. A number of free sites are available for one to log in and obtain information on international business environment (Seyoum, 2008). Some of the information is updated on a regular basis and hence giving them a clear picture of what the market is like.
Despite all the advantages that attached to e-commerce and internet business, this kind of technology has given rise to a number of complications that are hard to solve. Some people have taken advantage of the popularity that e-commerce and the internet have towards business and business people to fraud them of their money. Transactions made over the internet are based on mutual trust and signing of some documents online whose validity may not be definite. It has become easy for people to hack into some websites and steal some of the important information stored. They may also divert some of the communications taking place between the people and hence fraud them of their money and goods (Burma, 1948). Internet fraud has become one of the most difficult frauds to detect and even follow up. This is simply because the individual involved in the scam would deactivate the site once they are through with their business. There are technologically literate and will invent all forms of software that will facilitate their actions.
Internet security is at stake due to continuous inventions being done to it. Any development that is made to enhance security is usually followed by another technological development to make it insecure. Most business transactions have become void and unsuccessful due to the interferences that come with technology. It may also not be easy to trust the other person you are communicating with considering the fact that you have not had a physical encounter. The procedure of following up on such a case may be long and require substantial amount of money. Most people have had to give up on the follow-ups due to the time that they were taking and what they were required to do. Doing transactions online that involve huge amounts of money has become very risky especially if the individuals communicating barely know each other. There are also cases of fake deals being transmitted over the internet. They appear to be too good and promising yet their reality may not be guaranteed. Involved parties are only out to deceive unsuspecting and desperate clients and thereafter disappear in thin air after obtaining what they wanted to obtain.
E-commerce and internet business should mainly be used to carry out research on the market environment. If any transactions involving the exchange of finances have to be done, then the sender has to take a lot of caution. He or she needs to involve reliable people who will verify whether on such undertakings; legality is adhered to at all times (Johnson & Bade, 2010). Traders that desire to carry out online transactions should also take time to know each other and strengthen their ties before getting involved into partnership or serious deals. The government and other stakeholders are however trying their best to ensure that e-commerce and internet business is safe for use by employing certain security measures. It is however up to the individuals to take the necessary precautions by avoiding some fake transactions as well as reporting any suspicious network that is likely to fraud individuals. Otherwise e-commerce provides the best alternative that international traders can engage in transactions without having to go through a number of physical procedures.