BPF

FITTskills – Feasibility of International Trade Project Requirements FEASIBILITY OF INTERNATIONAL TRADE

Table of Content

Executive Summary…………………………………………………………. 2

I. Organizational Profile…………………………………………….3

i. Company Focus

ii. Product Focus

iii. Is the company ready to export?

II. Research Objectives…………………………………………………5-12

a. Political Conditions

b. Economical Conditions

c. Socio-cultural Conditions

d. Technological Conditions

e. Environmental Conditions

f. Legal Conditions

III. Research design and methodology………………………………………12-13

IV. SWOT Analysis……………………………………………………………13-14

V. Cost and Pricing Analysis………………………………………………….14-19

1. Pricing Strategy 

2. Costing Analysis

3. Incoterms

VI. Risks Analysis……………………………………………………………….20-21

VII. Development of Mitigation strategies………………………………………22-23

VIII. Conclusion and Action Plans………………………………………………..21

IX. Works Cited…………………………………………………………………..23-24

Executive Summary

Our research paper is based on examining the feasibility of exporting the Perfume “I am trash”, which is made out of waste food, into a new market. We will start our analysis by assessing the original company called “Etat Libre d’Orange” which is located in France, Paris to determine whether or not our company is ready to export. Our next step will be evaluating all the factors of the market entry country that will allow us to understand all the opportunities and threats that the company may face in its market-targeted country, Singapore. After preparing our SWOT analysis, we will be ready to do an analysis about what we need to take to successfully enter the market. In order to prepare our market to go globally it will be necessary to plan all the costs and expenses that the company will need and determine our pricing strategy before expanding internationally. To prevent our market from unexpected chaos, our research is identifying all the risks that our entry market may demonstrate while presenting the potential remedy. Finally, our research will gauge all the presented information and come up with a conclusion and recommendation for our statement. 

I. Organizational Profile

i. Company Focus

Etat Libre d’Orange is a distinctive fragrance line that was established in the Marais neighborhood of Paris in 2006. According to the founder Etienne de Sward: "We are a little, impertinent brand that plays with all codes, a little eccentric, but the sole dogma is the quality of perfumes. For both perfume makers and lovers, the remaining parts are a fantastical world of enjoyment (Dated 2019). Here is the founder's vision for perfume after speaking with him or interviewing him: "to restore it to its letters of dignity, grace, and virtuosity." to create an exclusive, difficult fragrance that is universally adored. Long live a perfume that is completely, utterly, and utterly free. Adorable in a dangerous way. Flamboyant, exaggerated, flawless, occasionally sulfurous, always delectable. At Etat Libre d'Orange right now, there are just over thirty different scents. The brand has established itself as a reputable player in the perfume industry over the course of 14 years, earning 5 stars in the New York Times rating of perfume houses. For "having ventured to develop novel and different scents," the Fragrance Foundation France awarded the winner the Specialists Prize.

ii. Product Focus

Etat Libre d' Orange is attempting to create the fragrance "Fleurs du Déchet: "I am Trash"; a messenger working for the planet's survival above all else, as well as the species' existence, which results from seduction. The following, are the key messages of this product: "composed with nature without seeking duplication in order to create a new unwritten story" and "pay attention to the beauty that the elements have already shown (AUPARFUM, 2018). This perfume was developed in an effort to combat a West that is frequently polluted and disillusioned, with the goal that democracies will perceive nature as the spiritual center that should be appreciated by all. What is dirty can mirror beauty, according to this product's message, which is universal. The perfume "Les Fleurs du Déchet" makes sense given current events and societal sensitivities in our time, when people are starting to recognize the serious environmental situation and the movement toward environmentally friendly products. Additionally, the "Les Fleurs du Déchet" perfume by Orange Free State occupies a certain niche and has a compelling individuality. They draw novices and a group of enthusiasts who are interested in distinctive fragrances, particularly "Les Fleurs du Déchet," as well as those who care about the environment and recyclable products. I AM TRASH is a ground-breaking new scent in the high-end fragrance market. Every year, 92 million tonnes of garbage are produced by luxury. Etat Libre D'Orange, a boutique perfume brand that defies convention, goes above and beyond being just edgy. With its most recent invention, it took on the perfume business by turning its trash into the most sought-after aroma. I AM TRASH is the first fragrance created from the massive amount of garbage generated during the creation of perfume. The daring plan, which went against the grain of what constitutes a "beautiful smell," aimed to alter how society views waste.

Price: 100ml= 140euro

50ml= 98euro

Perfume ingredients: ALCOHOL DENAT., PARFUM (FRAGRANCE), AQUA (WATER), ETHYLHEXYL METHOXYCINNAMATE, BUTYL METHOXYDIBENZOYLMETHANE, ETHYLHEXYL SALICYLATE, LIMONENE, CITRONELLOL, CITRAL, GERANIOL, LINALOOL, BENZYL BENZOATE. 

iii. Is the company ready to export?

Presently, Etat Libre d'Orange offers a selection of over 30 essential and aspirational perfumes. Etat Libre d'Orange offers unique olfactory creations without any restrictions on creativity, raw ingredients, or cost, with a focus on originality, daring, authenticity, and freedom of expression.

This is the reason why the company has attracted a growing number of ardent followers who appreciate Etat Libre d'Orange's uniqueness, honesty, and dedication to its core values: luxury, provocative, occasionally ironic, frequently subversive, and always exquisite. In ten years, Etat Libre d'Orange has established itself as a reputable player in the fragrance industry. With the addition of a new minority shareholder, the irreverent French fragrance company should see a five-fold boost in sales over the next three years. We believe that the company is ready to export.

II. Research objectives

Our goal is to ensure that exporting the perfume “I am Trash” into the Singaporean market for selling will be a successful business entry and be profitable for the company. Our research is based on: 

· Making sure that our company will have the capacity for political and legal operation implications in the Singaporean Market.

· Identifying the country's current economic conditions, population distribution, and household income. 

· Determining our product potential, and acknowledging the Singaporean cultural taste and preferences, responding to their ethics and values while resolving whether or not our product “I am Trash” will be accepted into the Singaporean market with its current label.

· Understanding the technological capacity and languages of the countries we want to trade with to allow a reliable communication electronic transfer.

· Ensuring that our product will qualify for the market environment requirement 

· Finding our competitors due to the high rate of the perfumery firms in the Singaporean market

From our vantage point, the PESTEL model can be used to help us discover the external factors that have an impact on our business, either positively or negatively.

a. Political Conditions

Singapore became a republic and a member of the Commonwealth in 1963 despite still being a part of Malaysia. Singapore left Malaysia in 1965. Although English is the primary language used in both business and government in Singapore, Mandarin Chinese, Malay, and Tamil are also recognized as official languages. Among the more politically stable nations in the area has been Singapore. With the exception of a few rare circumstances covered by specific regulations, there is generally no discrimination between foreign and domestic investment. Singapore limits foreign investment in industries like banking, real estate, media, and telecommunications.

According to the Singapore Law, cosmetics include any material or preparation that is meant to be applied to the skin, hair, nails, lips, or mouth (including the gums, teeth, and tongue) for the following purposes is referred to as a cosmetic product: removing them, smelling them, adapting to new looks, getting rid of body odors and safeguarding them and maintaining them in good shape. Cosmetics supplied in Singapore must adhere to the Health Products Act (An Act to Control the Manufacturing, Importation, Supply, Presentation, and Advertising of Health Products and the Active Ingredients Used in the Manufacturing of Health Products, and to Provide for Matters Thereto), and its Health Products (Cosmetic Products - ASEAN Cosmetic Directive) Regulations 2007 standards (the Regulations). The Regulations comply with the ASEAN Cosmetic Directive (ACD), which follows comparable regulatory principles and specifications to those of the European Union (EU) regulations on cosmetic items. For the purposes of these Regulations, the person in Singapore who plays a significant role in making a cosmetic product available for sale there is considered to be the person who placed the cosmetic product on the market. France was one of the thirteen nations that recognized Singapore's independence in 1965, and the two countries have a rich history of mutual understanding. Bilateral commerce has increased consistently since that time, topping $15 billion in 2021. As a platform for development into other Southeast Asian markets as well as for French businesses wishing to establish their regional headquarters, Singapore has now become a crucial hub. Singapore ranked as France's 12th-largest commercial partner in 2021. In the same year, France exported goods worth over $8 billion to the city-state, which comprised $1.02 billion for perfumes and cosmetics. 

b. Economic Conditions 

Singapore is a high-income nation with a 2017 gross national income of US$54,530 per person. The country's legislative framework is among the most entrepreneur-friendly in the world, and its economy is regarded as one of the most competitive in the world. Singapore quickly transitioned from being a low-income to a high-income country after achieving independence. Singapore's Gross National Product (GNP) was reported at 349.024 USD bn in Dec 2021 and is known for a real growth increase of approximately 7.31% in the past five years, which is seen as an improvement in living standards and a positive asset for our market entry. The country's Gross Domestic Product state's growth has been among the highest in the world, averaging 7.7% per year since independence and reaching 9.2% in the first 25 years. In 2018, Singapore's economy expanded broadly by 3.2%. Singapore's purchasing power parity in 2021 was 0.8 LCU per foreign currency. Even though the Singapore PPP has been quite volatile lately, it has generally risen from 2002 to 2021, reaching 0.8 LCU for every domestic currency (USD) in that year. The median monthly household income among resident-employed households increased by 3.6% in nominal terms, from $9,189 in 2020 to $9,520 in 2021, surpassing pre-COVID-19 levels. In 2021, the median monthly household income from work increased by 1.5% in real terms after accounting for inflation. The median monthly household income earned by resident-employed households increased cumulatively from 2016 to 2021 by 4.2% or 0.8% annually in real terms. Around 20% to 25% of Singaporeans are classified as being "in poverty," which means they are unable to meet the basic physiological and material demands of everyday existence. In 2022, the Fragrances segment will generate US$139.50 million in Singaporean revenue and according to the worldwide fragrance association, Singapore's fragrance industry contributes $342 million to global economic and social value. The market is anticipated to expand by 2.93% yearly (CAGR 2022-2026). The necessity for sustainable economic development is critical given the prevalence of poverty, a severe problem with unemployment (and underemployment), and other factors. Bringing I AM TRASH perfume to Singapore will positively boost the company's profit because Singapore's international industrial economy is fully established and due to the island's dearth of natural resources, the nation is severely dependent on imports. The entire balance of payments has consistently been in surplus. The economy is heavily regulated by the state. Economic development inasmuch as the tertiary basis of the economy is a significant barrier to the productive mobilization of resources, must obviously entail diversification. 

c. Social-cultural Conditions

Singapore had a population of roughly 5.92 million as of 2022. The CMIO framework divides Singapore society into four major ethnic groups: Chinese, Malays, Indians, and Others. Ethnic groupings like the Eurasians, a people with a mixture of European and Asian heritage, fall under the "Other" category. Singapore has recently been successful in establishing itself as a major international and Asian financial and business center. Singapore remains a desirable location for immigrants and expatriates. International non-residents accounted for almost a third of Singapore's overall population as of 2021. This share rose to over 40% when the number of students, permanent residents, and other people with work permits was included. The state of Singapore is multilingual. Malay is the official language of Malaysia, along with English, Chinese, and Indian (Tamil) (Mandarin). Our company will be submitted to find a translator for easy business communication with the targeted market. Around 60% of Singaporeans have annual per capita incomes of less than $600, or less than one-third of the national average. Significantly, since 1953, when it was officially claimed that one-quarter of the population was poor, the percentage of Singaporeans living in poverty has barely altered. Statically, 1.5% to 2% of the population is made up of upper-middle-class households, which make up 10% to 12% of all personal incomes, 15% of all households are from the lower middle class and about 5% of people are in the intermediate middle class. For the largest businesses in the flavors and fragrances market, Singapore is a crucial hub. Symrise, Givaudan, International Flavors & Fragrances (IFF), Takasago, and Firmenich, the "big five," have their headquarters in Singapore, where many of them also have important operations. The company, which provides high-end perfume brands including Christian Dior, Calvin Klein, and Prada and has its headquarters in Switzerland, was founded in Singapore in 1994. More and more customers want their scents to function well and last a long time. Without a doubt, Singapore experiences a hot and muggy climate. The majority of individuals must frequently change their clothes in the hot weather due to the congested streets and loud traffic in the metropolis. The majority of smells are designed to intensify over time while you wear them, but being outdoors in hot, humid weather can hasten the rate at which a perfume fades because of heat and perspiration. Singaporeans prefer the fruity scent of the perfumes and aromas they can put on before leaving the house which may be amplified by the heat. With its abundance of shopping malls and uncountable brand names, Singapore is a shopper's paradise. Singapore is a sunny shopping heaven with an upscale retail landscape bursting with the newest global trends. Singapore serves as a travel gateway for Southeast Asia and draws visitors from adjacent countries, while its residents enjoy some of the highest levels of spending power worldwide and enjoy shopping. The study also found that almost half (49%) of Singaporeans consider shopping as a hobby, of which 55% are women between the ages of 25 and 65. The French perfume got the potential to be sold because of the relevant number of shoppers in Singapore. Moreover, whilst 79% say they shop when they need a specific item, 45% say they do so because it makes them feel happy (Luz Wendy Noble, 2019). Singapore is also known for throwing away a lot of food. Of the overall trash produced in Singapore, food waste makes up roughly 12%. Our concern will be that we are not convinced that Singaporeans will feel attracted by the perfume label “I am Trash”, which is made out of food waste. 

d. Technological conditions 

Technology is an essential sector of the cosmetics sector. Many recent innovations have changed the way companies sell products, engage in manufacturing, and interact with customers. The enduring passion for social media in Singapore opens up new business options for affiliate marketers and advertising. You can get the inside scoop on how this landscape has changed in 2022 with the help of this comprehensive reference to Singapore's social media data. Out of a total population of 5.92 million, 5.3 million people in the city-state utilize social media. Therefore, almost every Singaporean uses social media in some capacity. In Singapore, there were 340,000 more social media users in the last year (+6.9%), making up 89.5% of the population in February 2022. Singapore has the fastest fixed broadband connectivity in the entire globe, according to a worldwide rating based on recent data received from internet users.

Singapore lagged behind Norway, South Korea, and the United Arab Emirates for mobile download speeds. As of February 2022, 92% of its population using the internet. Singapore has 43,000 more internet users than the previous year (+0.8%) (Raj A, 2022).

e. Environment Conditions

The impact of the environment and nature on business activity is significant insofar as it influences strategy, which in turn affects growth and, in some cases, survival. Fruits, vegetables, flowers, and trees are abundant in nature, and their primary resources—which may be extracted—can be used to benefit humans. One of the ingredients in perfumes is flower essence. In fragrance, there are various flower categories. In Singapore, one of the largest waste sources is food waste, which has increased by 20% over the previous ten years. Singapore produced 744 million kg or so of food waste in 2019. That is equal to over 51,000 double-decker buses, or two bowls of rice per person per day. Currently, an ongoing public relations and outreach initiative to reduce food waste aim to raise consumer awareness of the problem of food waste in Singapore and to persuade them to develop sensible food-purchasing, food preparation, and food-storage practices. Additionally, more than 400 Food Waste Reduction Ambassadors have received training to assist them in educating their families, friends, and neighbors about reducing food waste. 

The sale of alluring luxury fragrances is frequently at the heart of the perfume industry. Contrary to other perfumes, Les Fleurs du déchet (I AM TRASH) has distinguished itself and, more importantly, grabbed the interest of its clients with its dual characteristic of sensual and ecological aroma. In order to combat climate change, more and more businesses are now adopting a sustainable development strategy, and more and more customers are demanding natural products. In addition to having a strong economy, Singapore also boasts a sustainable environment, which has drawn many investors. Since gaining independence in 1965, Singapore has prioritized sustainability in integrated planning, high-density development, and the preservation of natural spaces, making it one of the top cities in the Green City Index. Due to the abundance of parks and other green areas, Singapore is frequently referred to as the "garden city." The facade, interiors, rooftop, and outside of the building are all covered in plants. The city-state aspires to be the greenest metropolis in the world and has significant tropical natural reserves and botanical gardens. Singapore is now one of the primary worldwide hubs for major multinational organizations and a destination for investors from all over the world thanks to eco-conscious policies and initiatives. After gaining independence in 1965, Singapore became one of the top cities in the Green City Index by putting sustainability first in integrated planning, high-density development, and the preservation of green spaces. Furthermore, Singapore is a tiny island with few natural resources. To make the best use of the resources, the central government implemented a planning and management strategy.

f. Legal Conditions

Every perfume that is imported into the Singaporean market should be claimed at the customs office and should be in the original packaging. Any amount of perfume brought into the country for a commercial purpose is subject to a duty of 10%. It is also important to note that Singapore has regulations on the import of certain items, including perfume. Perfume containing more than 24% alcohol by volume is considered a restricted item and can only be imported with a license. You must submit a declaration to Singapore Customs in order to import goods into Singapore. On non-dutiable products, the Goods and Services Tax (GST) of 7% is due. If dutiable products are imported for domestic use, both GST and tax must be paid, adding the levies fees for clearing imported goods, which are determined by the cost of the items and the nation of origin. There are seven steps that the company Etat Libre d’orange is required to follow in order to import their perfumes to Singapore.

Step 1: A person or thing that wants to obtain import, export, and transshipment permissions or certifications in order to engage in import or export activities in Singapore, you must:

To receive a UEN, you must first register with the Accounting and Corporate Regulatory Authority (ACRA) or the applicable Unique Entity Number (UEN) issuance organization;

Make its Customs Account active.

Step 2: Do your research to determine whether the products you want to import are restricted or controlled by Singapore's Competent Authorities (CAs). The Harmonized System (HS) code, the CA product code, or the product description can all be used to do a search. The name of the controlling authority (CA) will be included next to the item's HS code if it is subject to control. You can ask the relevant CAs directly about their license requirements. For a charge of S$75 per product, you can ask for an official classification ruling if you need guidance on the product's entire 8-digit HS code. Please be aware that our classification regulations only apply to use inside Singapore.

Step 3: The company or the declaring agent must keep an Inter-Bank GIRO (IBG) with Singapore Customs in order to pay Singapore Customs directly from your bank account for duties, taxes, fines, penalties, and other expenses related to services rendered by Singapore Customs. Send Singapore Customs the Application for Inter-Bank GIRO form in the manner specified on the form. You may authorize your Declaring Agent to use your IBG to pay the duties and GST associated with your customs permit starting one day after your IBG application has been granted. If you don't maintain a Declaring Agent's IBG on file with Singapore Customs, the duties and GST will be deducted from it.

Step 4: The company must offer security for transactions involving dutiable items, the temporary import of goods for permitted uses, and the running of authorized establishments such authorized warehouses and excise factories. The security given shall be in the form of a banker's guarantee, finance company guarantee, or insurance bond.

Step 5: Obtain an import permit from the customs

Typically, each permission application costs S$2.88. This excludes any service charges levied by service providers like freight forwarders and declaring agents, among others. If you are using a Declaring Agent to help you file the permit application, you might want to find out how much they charge in service costs.

Step 6: Applications for approved licenses are given a period of validity. Make sure the permission presented for goods clearance is still in effect. When requesting a permit for the import of containerized cargo, the container number and shipper seal number are necessary.

Step 7: Retain your trade documents. Typically, you have five years from the day the permit application was approved to save any pertinent supporting papers pertaining to the acquisition, import, sale, or export of the products. Both paper copies and digital copies of these documents can be kept on file. If Singapore Customs asks for certain supporting documents, you must provide them. ​​Customs clearance fees for perfume are based on the value of the goods. For perfume with a value of up to S$100, the customs clearance fee is S$5. For perfume with a value of S$101 to S$250, the customs clearance fee is S$10. For perfume with a value of S$251 or more, the customs clearance fee is S$30.

Professionals, managers, executives, specialists, or business owners from France who want to work in Singapore must apply for an Employment Pass and receive MOM pre-entry authorization before they can visit the country. There are no limitations on foreign investors acquiring 100% ownership under the Singapore Companies Act. Although at least one local resident director must be appointed when a prospective company is incorporated, stockholders are not required to serve as directors. Due to Singapore's flexibility, many international investors choose to establish their businesses there. 

III. Research design and methodology 

Today, the term "perfume" most commonly refers to a specific olfactory composition that is highly concentrated, suggested, conditional, and has a high olfactory concentration by different perfume manufacturers. We also say "extract." In particular, the perfume industry, which has grown significantly in Europe, is a subset of the larger cosmetics sector, which includes perfumes. Guerlain, Givaudan, François Coty, Dior, Chanel, and many more have historically been the key participants in this sector. The Maison Guerlain, one of the most well-known perfumeries in the world, is located in France, which is well-known for its perfume industry. The French Riviera is home to Grasse, the ancient center of flowers, and Paris, where the renowned perfumers have their headquarters. Grasse is also where the world's top "noses" work. According to Jean-Claude Ellena's book Le Parfum, the global market for fragrances and scents is expected to reach 26 billion euros in 2019. The Singaporean beauty industry is still growing rapidly, with an average annual growth rate of at least 20%, and Singapore's position as a global center for the cosmetics industry is improving. Some estimates place the yearly value of the Singapore retail market for high-end cosmetics at S$120 million, with perfume sales accounting for a quarter of that total. Singapore is also second in Asia behind Hong Kong, South Korea, and Taiwan in terms of per capita spending on cosmetics and toiletries, trailing only Japan in that regard. Our research demonstrates that Singapore's perfume business is underdeveloped in terms of output, on one hand. In Singapore, there aren't many businesses that make perfume. On the other hand, the earlier cited statistics demonstrate that Singapore is a sizable market for the sale of perfume. The majority of businesses, including Dior, L'Oreal, Lancôme, Hugo Boss, and others, sell perfumes from Europe to Asia. Luxury has a significant impact on this sector. In fact, 27% of the sector is accounted for by the luxury market in 2018. According to a Bain & Company analysis from 2018, the luxury market will expand at a rate of 4-5% annually over the next three years due to product innovation and customization. Consequently, we might assume that the luxury market currently has a range of about 40%. However, this business has it all, including low-cost fragrances with companies like Equivalenza, a Spanish company, and the niche market with companies like L'Oréal.

IV. SWOT Analysis

Strength

· The Perfume is unisex

· Deliciously crafted ambery/fruity musk scent 

· A huge market share in the fragrance and flavor industry.

· Very solid financial performance and solid position.

· Strong R&D capabilities with constantly increasing investments

Weakness

· High competition

· Not very popular

· Not attractive label name 

· Language barrier

Opportunity

· The great trading relationship between France and Singapore business

· A strong economy and import possibility

· The targeted country is very business-friendly (easy import)

· Eco-friendly targeted market (Singapore is fighting to adopt the food zero waste mentality) 

· High-speed internet and use of social media (which will facilitate product marketing)

· The perfume qualifies for the Singaporean import requirements.

Threats

· Citizens with low income (unable to afford the price)

· Presence of numerous similar perfumes in the market

V. Cost and Pricing Analysis

Companies can expand their consumer base and access new markets by exporting their products to other nations. When sending a package, several aspects must be precise in order to reach these new clients. Any oversight could result in expensive errors. These specifics could seem intimidating to someone who has never exported before. Fortunately, with a little effort, persistence, and understanding, you can export items. The packaging and paperwork of your cargo are the two things you should pay the most attention to when delivering items. Your consignment will be examined by Customs prior to entry into the target nation when exporting to another country. To guarantee that only authorized commodities enter the country, customs examine all imported goods. The minimal paperwork needed for the majority of foreign shipments consists of an export invoice, a dangerous goods notation, and any necessary licenses. Each nation has its own set of importation taxes and paperwork requirements. It is crucial to familiarize yourself with the individual rules and regulations of any country you are shipping into. The goal of our pricing and costing analysis will be to help the company Etat Libre d’orange to export their “I am Trash” perfumes to Singapore while respecting all the country’s regulations and making profits from their goods.

1. Pricing Strategy 

In 2021, France exported goods worth over $8 billion to the city-state. This comprised perfumes and cosmetics worth $1.51 billion. Considering our target country, we believe that Singaporeans enjoy the scent of french perfumes, furthermore, we do not know how Singaporeans are going to welcome the luxury french perfume “I AM TRASH”. Consequently, for pricing, we did carry our choice on the market skimming strategy. Our choice will enable the business to set its initial product price as high as its target market will bear before gradually lowering it. The business reduces the price to appeal to a different, more price-sensitive portion of the population as the demand of the initial clients is met and competition enters the market. The name "skimming" refers to the process of "skimming" successive layers of cream, or client groups, as prices are gradually decreased over time.

The strategy will help our business to get familiar with its targeted customers and once the demand expands, the company will consider lowering its price. 

2. Cost Analysis 

It is important to note that our company has never exported outside of Europe territory. We did plan for our beginning to start exporting 500 bottles of perfumes in both 50 ml and 100 ml sizes. We do not have a suitable previous balance sheet and would like to build our cost analysis by relating to a substitute french perfume that already did export in Singapore. 

Categories Total Euro

1. Service Costs

       Products (250x140)+(250x98) 59,500

       Labor 40,000

       Name Label Modification cost 4,500

       Administration 3,000

       Domestic financing fees 3,000

       Total domestic cost 1,800

       Fewer taxes refunded 6,325

 

2. Cost of sales and promotion

Travel expenses 10,000

Promotional activities 15,000

Communication 2,000

Translation 500

Legal and negotiating expenses 4,000

Export sales commission 1,300

 

3. Preparation for delivery

Integration into target market infrastructure 14,000

Visa and work permit 4,000

Travel services 5,000

 

4. Other costs of preparation for transport

   Foreign labor living expenses 18,000

Categories Total

Training cost of local personnel 10,000

Meeting quality assurance and 35,00

Monitoring requirements

Administration 4,000

Overhead 3,000

Miscellaneous 16,00

 

5. Risk coverage

  Intellectual property protection 6,270

  Insurance 3,600

 

   6. Import duties and delivery

       Import taxes(7%) 4,000

       Withholding taxes 13,00

       Broker fees 22,00

 

    7. After-sales services

        Desired after-sales services 4000

    

     8. Export Financing cost

         Financial instruments 5000

         Discounting charges 500

         Export credit insurance 75,00

         Hedging foreign exchange risk 53,00

         Total cost before profit margin 194,027

         Profit margin 50,000

         Export sales price 600,000

           

3. Incoterms

For our business Incoterm, we decided to use the free onboard intercoms for every shipment departing from France to Singapore. The phrase "Free on Board" (FOB) refers to the point in the supply chain where a buyer or seller takes responsibility for the goods being carried. Purchase orders between buyers and sellers outline the FOB conditions and aid in calculating ownership, risk, and shipping expenses. It indicates that after the vendor ships the product, the buyer accepts the title of the items and assumes all risks. If the products are harmed or lost in transportation, the buyer is liable.

What obligations does the seller have?

The following obligations are taken on by the seller when they sign into a sales agreement using the Incoterms of FOB:

· Organizing all export packaging to ensure that the goods can be transported safely.

· Any costs incurred during the loading process at the seller's warehouse are referred to as "loading charges."

· Delivery to Port: The cost of transporting the cargo by truck from the warehouse to the loading port.

· Ensure the cargo is shipped properly by paying the export duty, taxes, and customs clearance.

· Origin Terminal Handling Charges (OTHC): OTHC is the seller's responsibility.

· The costs incurred to put the cargo onto the carriage are the seller's responsibility.

What are the obligations of the buyer?

The following obligations and dangers are acknowledged by the customer when they choose to purchase products under the Incoterms of FOB:

· Freight costs: The cost of transporting the cargo from the port of loading to the final destination.

· Insurance: Under FOB, freight insurance is not necessary, but it is up to the customer to decide whether or not they would like to obtain a policy for their cargo.

· The buyer is in charge of paying the destination terminal handling fees (DTHC).

· Delivery to Destination: The buyer is responsible for paying the final carrier fee to deliver the load to their location once the cargo has been unloaded from the conveyance.

· Unloading at Destination: The buyer is liable for any costs incurred during the unloading procedure at the buyer's warehouse.

The purchaser is accountable for all taxes and costs related to customs clearance, including import duty. The buyer is responsible for any costs and risks related to dunnage, penalties, or delays.

Why should the company use FOB incoterms? 

For our business, we have to carry our choice on the FOB Incoterms because of their respective roles, we are guaranteed that both sides (France and Singapore) have the most influence over the cargo while it is on their soil. When the Singaporean market will be making a purchase using FOB Incoterms, they will benefit because they have the most control over logistics and shipping costs, giving them the freedom to select the shipment method. Also, they can choose their freight forwarder for the full shipment using FOB rather than leaving all or a portion of the freighting procedure in the hands of the company. Our customer just needs to depend on one business for the duration of the transportation procedure, reducing back-and-forth and the chance of misunderstandings between two shipping businesses. We also pointed out the Incoterms because they are the most economical choice since they enable the customer to compare shipping costs. The targeted country forwarder is in charge of the whole transportation procedure, but the risk is only transferred when the items are securely placed onto the shipping vessel. Once the cargo has left the company warehouse, the buyer is in charge of the shipment and has better control over how it will turn out. We value FOB Incoterms because it is the closest that is aligned with the Singaporean import regulations and also because we can consider the sale closed as soon as the freight leaves the company factory.

VI. Risks Analysis

Our business plan might not go as expected, which is why we are projecting the risks and elaborating on the management to anticipate any problem and implement solutions. 

1. Currency Fluctuations: One risk will be the power currency of the euro over the SG dollars because of its dependence on world trade. Singapore relies on international trade. As a result, the country shrank during the 2001 bubble and the 2008 financial crisis, although it quickly recovered. It is closely related to China. Given China's substantial capital, Singapore's economy is closely entwined with that country's. Given that China's fiscal growth has been gradually slowing since 2011, this connection has become problematic in recent years.

2. Market risks: France is one the greatest perfume suppliers of Singapore. The risk of the highest rate of competitors that have already entered the market and had a strong reputation compared to our business.

3. Societal impacts: For any outdoor public gathering or procession, a police permit is necessary. Permission is also required for the wearing or displaying of any "cause-related" materials or for the open display of foreign flags. To speak on "racial, communal, religious, cause-related, or political issues," a foreign national needs permission from the Ministry of Manpower. Protests at Speaker's Corner in Singapore are not permitted to be joined by foreign nationals who are not Permanent Residents.

4. Force Majeure: The Republic of Singapore is largely protected against natural disasters despite being situated in an area that is frequently affected by catastrophes of all sizes. Although the nation is ostensibly vulnerable to earthquakes, tsunamis, and cyclones, there is no historical evidence of these risks leading to widespread catastrophes. The monsoon season's heavy rains are the main cause of floods in the nation.

VII. Development of Mitigation strategies

1. Currency Fluctuations: Understanding the foreign exchange risk can help businesses that sell goods and services internationally and receive payment in a foreign currency adjust to exchange rate fluctuations and make more money than expected. This can be done by researching the current currency's volatility, strength, and weakness, as well as historical patterns of value fluctuations. The Euro is more powerful than the SG dollar currency, which will require us to do more deep research on how our company can invest without lowering too much its product price and in the Singaporean economy while considering GDP, unemployment, inflation, and interest rates, in order to reduce the impact of currency swings.

2. Market risks: The company wants to build a reputation in the Singaporean Market. One of the best methods to maintain your company's positive reputation is to keep customers engaged. Instead of hearing about your firm from rivals or other clients, this gives customers a clearer understanding of how it actually operates. Keeping your company's intellectual property protected is a wonderful strategy to stay competitive and preserve your company's reputation. It enables your company to make money from its own work and can stop other organizations from exploiting the content in a way that would harm your reputation.

3. Societal Impacts: Since the French Territory has a strong relationship with the Singaporeans, it will be important for them to converse with the decision-maker within the market country so that they may be assured of the protection of their people. The company can send a representative through travel and face-to-face meetings or through an intermediary who has an existing connection in Singapore (FITT, p343)

4. Force Majeure: The organization needs to stay prepared no matter what the weather looks like. They need to create emergency rescues in case something comes up and they need to evacuate the workers or their goods.

VIII. Conclusion and Actions Plans

Etat Libre d'orange is a company with great ethical values and the vision behind its perfume “I am trash” is favoring the recycling of food waste and also promoting the environment. Successfully exporting the product to Singapore is dependent on many factors such as political, economic, sociocultural, technological, environmental, and legal related to that market. After our research and evaluating the feasibility of our company Etat Libre d’orange exporting its perfume “I am trash” to Singapore, we noticed that the expense cost will be higher than we expected at the beginning of our plan and also, the company might not make good profits because of the pricing direction we suggested it take and also the presence of a higher competition within the market and mentioned risks. It is safe to claim that our company has the potential to succeed in Singapore but only if we consider taking some other actions such as: 

· Considering a label name change into the market. The owner might want to get another translation other than “I am trash” for the Singaporean market due to the sensibility the country might have toward the trash.

· Considering entering the market using e-commerce: As Singaporean technology seems to be stable; our company should consider presenting its market online. It will facilitate cost reduction which is one of the main benefits of e-commerce for businesses that keeps sellers engaged in online selling. Many vendors spend a lot on upkeep for their physical business. They would have to make more upfront payments for things like rent, maintenance, store design, merchandise, etc. In many circumstances, merchants do not get the required earnings even after spending on services, stock, maintenance, and labor.

· Consider a Joint venture: the Company should also consider the fact that they can partner with another flourishing company and build strong strategies to enter the Singaporean market. They will both have an advantage in joint ventures and each business contributes a portion of the funding required to bring their perfumes to Singapore, easing the burdensome cost of research and development. There is less of a chance that it will fail and have a detrimental effect on profitability.

Works Cited

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