Entering a Foreign Market Through Exports Warren

1

Running Head: ENTERING A FOREIGN MARKET THROUGH EXPORTS: A ROUGH DRAFT OF FINAL PAPER

5

ENTERING A FOREIGN MARKET THROUGH EXPORTS: A ROUGH DRAFT OF FINAL PAPER

Entering a Foreign Market through Exports: A Rough Draft of Final Paper

Warren Salvodon

University of Arizona

MGT370

Instructor: Jason Sheedy

April 25, 2022

Executive Summary

The roles and responsibilities in supply chain management include international logistics production, transport, purchasing, and strategic decision-making. They also include continuous improvements and modifications of existing procedures to achieve cost-effectiveness, achieve distribution targets to meet demand requirements, enhance accuracy, and bolster customer service. The position also requires effective inventory control in the storage, movement, and processing of goods. This report will identify a new export region (Japan) for High-Tech Tools Inc.'s hand-held radar speed gun. The merits and demerits of exporting to the chosen country will be evaluated, and an implementation plan will be proposed to export the goods.

Merits and Demerits of Exporting to Japan

Japan has a long-standing history of economic trade with American-based companies. It ranks fourth on the World Bank (2019) list of major US trading partners for exports. This makes it a viable export market that should be exploited using a comprehensive plan. The first benefit of exporting to Japan is the potential to increase sales due to an increased target market. Exporting the hand-held radar speed guns to Japan will widen High-Tech Tools Inc.'s market scope, expanding its customer base. Moreover, the company's exports to Japan will ensure it is not tied up to the economic fluctuations in the US, hence spreading its risks.

Exporting to Japan will naturally translate to the company's expansion as it hires additional human resources to handle its overseas operations. The company's expansion will come with economies of scale benefits, including discounts from large raw material purchases. Such benefits will eventually lead to reduced production costs. According to Siba and Gebreeyesus (2016), exports relax the balance of payment constraints by promoting economic growth through increased foreign exchange. High-Tech Tools Inc. will also access new knowledge and technologies through its strategic export engagements with companies in Japan.

While the plan to export to Japan will yield significant benefits to the company, there will be challenges. The most immediate challenge will involve the costs incurred in setting up its international branch in Japan to distribute promotional materials and handle administrative tasks. A physical presence in Japan will be necessary to meet the local safety codes and restrictions. Such a presence will also be necessary to remedy potential challenges in collecting payment from the US or obtaining reliable Japanese market information to inform strategic decision-making.

Factors Affecting International Logistics Operations.

A review of the costs incurred in entering the Japanese market will be necessary to prevent market fluctuations from adversely affecting the High-Tech Tools Inc. international logistics plan. Such a review will be essential to implementing international supply chain management procedures that maximize profit at low operational costs. International expansion factors can be categorized into technology, market, competitive, and cost drivers (Pierre, 2021). Therefore, the port of Chiba is an appropriate landing area for High-Tech Tools Inc.'s exports to Japan. Its position as a major seaport handling major imports to the country and the availability of prefectural government offices in the area make it the perfect location to handle the company's exports.

High-Tech Tools Inc.'s to Japan will be influenced by the availability of adequate sales personnel and marketing affiliates to respond to customer demands quickly. Such a team will also be necessary to develop and operationalize effective communication channels with customers in Japan. Moreover, a robust information technology infrastructure will be required, complete with specialized support to integrate various communication and operational systems into the Japan office, including supply chain management systems. An effective information system will be necessary to manage the market and assembly data necessary to develop and implement plans and guidelines.

Combining crates and multiple shipping by sea and rail will be appropriate for initial exports to Japan to save costs. The consignment will naturally not be too large since the hand-held radar speed guns will not be too bulky. However, the crates will need to be strapped down during transit to provide support. The package will also be labeled accordingly in Japanese and English, with instructions to handle with care and prevent water damage. Carriage and Insurance Paid To (CIP) incoterms will be proposed in exporting the hand-held radar speed guns to insure lost or damaged merchandise. The plan to enter the Japanese market will need to consider the relevant applicable laws and keep the required export records. A record-keeping compliance program will be proposed to streamline compliance with all applicable regulations and track necessary documentation and permits.

Conclusion

Effective supply chain management will be necessary to put the necessary structure for High-Tech Tools Inc. to enter the Japanese market. It will be essential to develop strong relations with customers and other logistics suppliers to support the company's supply chain. Such relationships will also be critical to building the company's brand through product promotion and cost setting. Long-term relationships with international shipping companies will also be beneficial to the company's supply chain.

References

Pierre, D. (2021). International logistics: The management of international trade operations (4th ed.). Cicero Books, Llc.

Siba, E., & Gebreeyesus, M. (2016). Learning to export and learning from exporting: The case of ethiopian manufacturing. Journal of African Economies, 26(1), 1–23. https://doi.org/10.1093/jae/ejw022

World Bank. (2019). United States trade balance, exports, imports by country 2019 | WITS Data. Wits.worldbank.org. https://wits.worldbank.org/CountryProfile/en/Country/USA/Year/LTST/TradeFlow/EXPIMP/Partner/by-country