Marine insurance is a contract by which the insurer, in consideration of payment by the insured of a specified premium determined under tariff rates or otherwise, agree to indemnify the latter against any loss incurred by him in respect of the merchandise exposed to the perils of the sea or to the particular perils insured against. In a c.i.f. contract, marine insurance is obligatory, and the policy must be one which is usual in the trade and is in a negotiable form. The policy must be stamped and bear a date not later than that of the bill of lading; and if the export is under a letter of credit, it must conform to the terms and conditions laid down in it. Types of Marine Insurance Policies 1. Single Cargo Risk / Open or Blanket Policy A marine insurance policy may be a “single cargo risk” policy, i.e., a policy Continue reading
International Business Basics
Competitiveness for Globalization – Country and Company Competitiveness
Strategic management of a global company requires an understanding and analysis of international business environment in order to assess opportunities and threats. The management has to formulate alternative strategies to exploit the opportunities provided by the environment by using company strengths. Many MNCs having the strength of technology and the environment of developing countries provide the opportunities of high quality and low priced products. Therefore, it is necessary to study the competitiveness of global business. The comparative cost theory concludes that the countries can specialize in producing certain products in which they have the competitive advantage of producing goods at low cost. It means that the customers in all the countries can have the goods at low price. Comparative cost theory also indicates that the countries which have the advantage of raw materials, labor, natural resources in producing particular goods can produce the goods at low cost with good quality. Continue reading
How Do Firms Internationalize?
The simple facts remains that firm internationalize for many reasons or the other; be it, profit motive, the expansion to new horizon, exploring and tapping new markets or for reasons less known, that is to say for competitive advantage or labor mobilization and last but not the least, the cost factors. Moreover, by going international, firm can also take center stage to reaps the benefits of global exposure, and the opportunity cost that can be reaped from international business is also rather more in a sense that diversity is also exemplified, plus the means that internationalization provides towards new markets beyond national boundaries is also what’s excites and interest organizations in going international. Add to it, supply chain and its management is also more broadened when firm indulge themselves in international business. Thus, the above mentioned facts in brief list some of the factors and the notion as to why Continue reading
Gains from International Trade and Investment
The major gain of international trade is that it has brought about increased prosperity by allowing nations to specialize in producing those goods and services at which they are relatively efficient. The relative efficiency of a country in producing a particular product can be described in terms of the amounts of other, alternative products that could be produced by the same inputs. When considered this way, relative efficiencies are described as the comparative advantages. All nations can do simultaneously gain from exploiting their comparative advantages, as well as from the large-scale production and broader choice of products that are made possible by the international trade. Suppose that Japan is relatively more efficient in producing steel than food and the United States is relatively more efficient in producing food than steel. So we can expect food to be cheap relative to steel in United States, and steel to be cheap relative Continue reading
Control Mechanisms for Multinational Enterprises
Controlling is tool for achieving organizational goals and activities. Control is management’s planning, implementation, evaluation, and correction of performance to ensure that the organization meets its objectives in the short, medium and long terms. In the case of Multinational Enterprises, the top management’s toughest challenge is to balance the company’s global needs with its need to adapt to country-level differences. Read: Control in Multinational Enterprises Some of the mechanisms that Multinational Enterprises use to help ensure that control is implemented are given below: 1. Corporate Culture Every company has certain common values that its employees share, expect fellow members to follow. Corporate culture is a form of implicit control mechanism that helps enforce the company’s explicit control mechanisms. Employees conform to company traditions of work commitment, interactions with customers and so on. These are unwritten, informal, but more effective. But MNEs have more difficulty relying on a corporate culture for Continue reading
Place Component of the Global Marketing Mix
The American Marketing Association defines channel of distribution as “An organized network of agencies and institutions, which in combination, perform all the activities required to link producers with users to accomplish the marketing task.” Distribution is the physical flow of goods through channels; as suggested by the definition, channels are comprised of a coordinated group of individuals or firms that performs functions adding utility to a product or service. The major types of channel utility are: Place (the availability of a product or service in a location that is convenient to a potential customer); Time (the availability of a product or service when desired by a customer); Form (the product is processed, prepared and ready to use, and in proper condition); and Information (answers to questions and general communication about useful product features and benefits are available). Since these utilities can be a basic source of competitive advantage and product Continue reading