This article has advantages and disadvantages of fdi pdf issues. Unsourced material may be challenged and removed. Many manufacturing firms began thei
This article has advantages and disadvantages of fdi pdf issues. Unsourced material may be challenged and removed. Many manufacturing firms began their global expansion as exporters and only later switched to another mode for serving a foreign market. Methods of export a product or good or information include mail, hand delivery, air shipping, shipping by vessel, uploading to an internet site, or downloading from an internet site.
Exports also include distribution of information sent as email, an email attachment, fax or in a telephone conversation. While restrictive business practices sometimes have a similar effect, they are not usually regarded as trade barriers. The most common foreign trade barriers are government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services. International agreements limit trade in and the transfer of, certain types of goods and information e. In dumping the producer sells the product at a price that returns no profit, or even amounts to a loss. The purpose and expected outcome of a tariff is to encourage spending on domestic goods and services rather than imports. Tariffs can create tension between countries.
If that fails, the country may put a tariff of its own against the other nation in retaliation, and to increase pressure to remove the tariff. Exporting has two distinct advantages. First, it avoids the often substantial cost of establishing manufacturing operations in the host country. In other words, the usual return on export sales may not be tremendous, but neither is the risk.
Exporting allows managers to exercise operation control but does not provide them the option to exercise as much marketing control. After two straight months of contraction, exports from India rose a whopping 11. 14 billion in the same month of the previous year. Exporting from the firm’s home base may not be appropriate if lower-cost locations for manufacturing the product can be found abroad. It may be preferable to manufacture where conditions are most favorable to value creation, and to export to the rest of the world from that location.
A second drawback to exporting, is that high transport cost can make exporting uneconomical, particularly for bulk products. One way to fix this, is to manufacture bulk products regionally. Another drawback, is that high tariff barriers can make exporting uneconomical and very risky. 250 employees, selling goods and services to foreign markets can be more difficult than serving the domestic market.