Countertrade is an alternative means of structuring an international sale when ________.
55) Companies can anticipate conducting countertrade with businesses in countriesthat ________. Show
Get answer to your question and much more 56) Proctor & Gamble exchanges cleaning products for machinery with Russia andHungary. The nature of this transaction indicates that Proctor & Gamble is engagingin ________.A) third-party logisticsB) freight forwardingC) countertradeD) e-commerceC) countertrade 57) Fundamentally, countertrade is best described as a(n)________ transaction. Get answer to your question and much more 58) All of the following are benefits of countertrade EXCEPT ________. Get answer to your question and much more 59) Fair Day Paper Products is a family-owned start up that imports bamboo paperfrom China to make custom greeting cards. The firm has experienced manyproblems in receiving the supplies from China; recurring problems include lostshipments, delays, and damaged products. Fair Day would most likely benefit byenlisting the help provided by which of the following? Get answer to your question and much more Countertrade is an alternative means of structuring an international sale when________.230.Ultimately, countertrade is an inefficient way of doing business because it________.231.Companies can anticipate conducting countertrade with businesses in countriesthat ________.232.Proctor & Gamble exchanges cleaning products for machinery with Russia andHungary. The nature of this transaction indicates that Proctor & Gamble is engaging in________.233.Fundamentally, countertrade is best described as a(n)________ transaction.234.The benefits of countertrade include ________.235.Fair Day Paper Products is a family-owned start up that imports bamboo paperfrom China to make custom greeting cards. The firm has experienced many problems inreceiving the supplies from China; recurring problems include lost shipments, delays, anddamaged products. Fair Day would most likely benefit by enlisting the help provided by Countertrade Explained in Less Than 4 MinutesUpdated on March 12, 2021 Photo: Shannon Fagan/Getty Images Countertrade is an alternative means to structuring an international sale when conventional means of payment are complex or nonexistent. The most common form of countertrade is bartering. Learn why countertrade is used, one famous example, and about the advantages and disadvantages of countertrade. Definition and Examples of CountertradeWhen an international sale takes place, it may be difficult to structure the sale through conventional means of payment. With countertrade, goods or services are exchanged rather than currency. This is often known as bartering. One famous example of a barter deal—that went awry—was when Pepsico Inc. signed in 1990 with the Soviet Union to double its soft drink sales there, open two dozen new bottling plants, and launch its Pizza Hut restaurants in the country's largest cities. To finance the expansion, Pepsico promised to increase its sales of Russian vodka in the United States and begin a new venture selling and leasing Soviet-built ships abroad. The title of this article divulges the outcome: “Doing Business: Bloc-Buster Deal: Pepsico's $3-billion-plus Soviet expansion was the 'deal of the century.' Then, the deal crumbled along with the country." How Countertrade WorksIn countertrade transactions, which involve trading in goods and services as opposed to money, cash does not change hands. This is oftentimes referred to as bartering, which is the oldest type of countertrade arrangement. NoteMany governments reduce imbalances in trade between countries through the use of a countertrade system of international trading. Companies that consider countertrade typically want to expand into a foreign market, increase sales, build customer and supplier relationships, and overcome liquidity challenges. With that being said, countertrade is used primarily to:
Advantages of CountertradeRegardless of the complexity, companies still use countertrade as a strategy for growth because it:
Disadvantages of CountertradeA disadvantage to countertrade is that the value of a deal—the goods being exchanged—may be uncertain, causing significant price volatility. Some other disadvantages include:
NoteIs countertrade the best option for small businesses? Only if they have exhausted other payment means and can absorb the delivery delays, contract negotiation challenges, and product quality issues. Countertrade is most attractive to large, diverse multinational organizations that know the lay of the land on exporting. Even then, that sort of experience doesn’t guarantee success. Key Takeaways
What is countertrade in international trade?What Is Countertrade? Countertrade is a reciprocal form of international trade in which goods or services are exchanged for other goods or services rather than for hard currency. This type of international trade is more common in developing countries with limited foreign exchange or credit facilities.
What is countertrade and why is it used in international business?Countertrade is a resourceful way to arrange for the sale of a product from an exporter to a company in a country that does not have the resources to pay for it in hard currency. The main reason that American firms engage in countertrade is to meet requirements set forth by foreign governments or customers.
What is countertrade marketing?Countertrade refers to the trade involving the exchange of goods or services for other goods or services. It may or may not involve partial payment in cash for goods or services bought but will not make complete payment in cash.
What is a characteristic of countertrade?The common characteristic of counter- trade arrangements is that export sales to a particular market are made conditional upon undertakings to accept imports from that market. For example, an exporter may sell machinery to country X on condition that he accepts agricultural products from X in payment.
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