Export Management Company Essay

Cheap Custom Writing Service

Export management  companies (EMCs) act for contracting   organizations   as  outsourced   international trade intermediaries  for products or services in overseas markets,  usually in lieu of an in-house  export or   international  marketing   department.  Offering full-service export assistance, EMCs can vary in size, scope, geographic  areas of operations,  and  level of specific technical or product expertise. EMCs handle all aspects and details of the export process, including documentation, regulations,  distribution,  and  sales, and are usually paid on a commission or performance basis. Normally representing  an organization’s products or product line on an exclusive basis, EMCs work overseas with their own appointed networks of exclusive dealers, distributors,  and export representatives in specific target markets.

EMCs operate in two forms: as exclusive distributors who take title (ownership), control, and responsibility of a good or service being exported, or as a sales representative or agent with no title, limited control, and responsibility, and subsequent minimized risk for these products. In this second approach,  ownership  of the good or service remains with the contracted organization or manufacturer (principal). EMCs are usually liable for all fixed costs associated with an export operation, including internal and external staff and overseas representatives, international travel, and communications. Most EMCs do not maintain their own overseas representative offices, warehousing, distribution,  sales, or service subsidiaries, but many maintain strategic alliances with similar companies in selected target markets.

As  distributors,   EMCs  normally  operate  under a “buy-sell” arrangement and  receive specific price discounts from client organizations  from which they derive  their  incomes  from.  As agents,  EMCs usually work on a commission-on-sales basis. Commission rates can vary dramatically from EMC to EMC depending upon the relative competitiveness of a client organization’s products in particular markets and the  capabilities, capacity, and  associated  exports  of the EMC. Historically, the commission rate has been approximately  10 percent  for consumer  goods and around  12–15 percent  for industrial  products.  With the rise of services exports, and in the bio-technology, information,  communications, and  technology exports, commission rates can vary and are normally a function of the price of the product calculated against the relative difficulty of its marketing over time.

In addition to overseas sales and marketing, EMCs can also provide other services to organizations, including  participation—on  the  principal’s behalf— in overseas trade shows, conducting  of in-market research,  localization  of product  specifications  and product  adaptation,  and  lobbying of governmental and regulatory entities.

Technology, communications, and the globalization of trade influence the roles and function of EMCs. Most recently, developments  in information  and communication technology have closed the gap between domestic and international marketing by making the process of contact  and communication with overseas clients easier, and “DIY” exporting more feasible and effective. This is having an effect on the number of organizations that  use EMCs, some  of whom  are countering  this trend by offering online export facilitation services and internet-based expertise services themselves.

Aside from a performance-based incentive process and  associated  motivations,   benefits  for  organizations utilizing EMCs are that they can rapidly acquire a “ready made” export  sales and  distribution  entity that has market and channel access and expertise. This translates to an immediate market presence. Organizations have, subsequently, the potential  to shorten  the time it takes to evaluate and access a specific target market, and can streamline the target market selection process. EMCs can often dramatically speed up export licensing and regulatory approvals and, if selected for the “distributor” role, can minimize the risk of exporting to an organization  by assuming foreign credit risk and the managing of complex and diverse international credit, collections, and nonpayment.

Alternatively, by maintaining  an outsourced  entity for  export  development,  an  organization  may  not be maximizing the financial benefit of international trade,  and  can  limit  the  development   of  internal export expertise, contacts, and sales networks. Most EMCs are smaller  firms and  have limited  financial capacity and internal resource capabilities. Subsequently, economic imperatives can focus their efforts on products  or markets  that have a higher potential for near-term returns,  rather  than putting  resources behind   activities  that   represent   a  more   strategic export opportunity for the principal. Finally, by using an EMC, an exporting  organization  can find that  it has relinquished  control  of their  product,  organization name, and reputation in the export market.

Bibliography:   

  1. Australian Institute of Export, Export Handbook, 19th ed. (Australian Institute of Export, 2008);
  2. Richard Barovick and Patricia Anderson, “EMCs/ETCs: What They Are, How They Work—Export  Management  Companies, Export  Trading  Companies,”  Business  America  (July  13, 1992);
  3. John W. Cadogan, Sanna Sundqvist, Risto T. Salminen, and Kaisu Puumalainen, “Market-Oriented Behavior: Comparing Service with Product Exporters,” European Journal of Marketing (v.36/9–10, 2002);
  4. Thomas A. Cook, The Ultimate Guide to Export Management (AMACOM, 2001);
  5. Export Trading Company  Affairs, U.S. Department of Commerce International Trade Administration, www.ita.doc.gov (cited March 2009);
  6. Carl A. Nelson, Exporting: A Manager’s Guide to the  World  Market  (International  Thomson  Business, 1999);
  7. Justin Paul and Rajiv Aserkar, Export Import Management (Oxford University Press, 2008).

This example Export Management Company Essay is published for educational and informational purposes only. If you need a custom essay or research paper on this topic please use our writing services. EssayEmpire.com offers reliable custom essay writing services that can help you to receive high grades and impress your professors with the quality of each essay or research paper you hand in.

See also:

ORDER HIGH QUALITY CUSTOM PAPER


Always on-time

Plagiarism-Free

100% Confidentiality
Special offer! Get discount 10% for the first order. Promo code: cd1a428655