hw about marketing
Alex smith
chapter_3.pptx1
Chapter 3
Marketing 4220
International Sourcing, Logistics
& Transportation
International Logistics Infrastructure
5/22/2015
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International Infrastructure
Infrastructure is a collective term that refers to all of the elements in place (publicly or privately owned goods) to facilitate transportation, communication and business exchanges.
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International Infrastructure Types
Transportation Infrastructure
Communication Infrastructure
Utilities Infrastructure
Services Infrastructure
Legal and Regulatory Infrastructure
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International Infrastructure
The Transportation Infrastructure enhances the movement of goods efficiently within a country and between countries. This requires well-maintained seaports, airports, railways, and roads.
The Communication Infrastructure allows businesses to communicate clearly and quickly. This requires reliable phone lines, cell phone networks, internet service and mail delivery.
The Utilities Infrastructure facilitates businesses to sustain their daily operations. This requires allows reliable energy (natural gas), electricity, water and sewer services.
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International Infrastructure
The Banking Infrastructure helps businesses move funds and documents quickly and reliably, both within a country and between countries. A network of bank branches and well-trained bank employees is required.
The Business Services Infrastructure offers businesses to find additional competent logistics help quickly. This includes freight forwarders, couriers, carriers, delivery services, packing services and related entities.
The Distribution Infrastructure serves businesses to find agents and distributors, to develop wholesale and retail channels and promote their products.
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International Infrastructure
The Court Infrastructure helps businesses to settle disputes quickly and fairly. This includes not only an efficient court system, but also a network of mediators and arbitrators and the existence of clear jurisprudence.
The Intellectual Property Infrastructure facilitates businesses to protect their intellectual property (copyrights, patents, and trademarks) with law enforcement services intent on enforcing intellectual property laws.
The Standard Infrastructure allows businesses to determine the requirements their products and operations must meet. This includes safety, design and performance standards.
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Transportation Infrastructure
Ocean and Water Transportation
Air Transportation
Railroad Transportation
Road Transportation
Other Means of Transportation
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Port Infrastructure (1of 2)
Water Draft – Water depth determines the size of the ships that can call.
Air Draft - Bridge clearances also determine which ships can call.
Cranes - Post-Panamax ships need wider/taller cranes than Panamax ships.
Port Operations - Many ports have strong unions which limit operations.
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Port Infrastructure (2 of 2)
Space Limitations - The location of most ports limit their ability for expansion.
Warehouse Space – The availability of reliable storage space for goods in transit is limited
Connection to land-based Transportation - Ports need to have reliable access to roads and/or rail lines to facilitate cargo movement
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The port of Yangshan, China
(near Shanhai)
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A Panamax Ship
A Post-Panamax Ship
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The Alameda Corridor
between the Port of Los Angeles
and the U.S.
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Canals and Waterways
Maritime transportation is dependent on the existence of reliable canals.
The Suez Canal in North Africa and the Panama Canal in Central America are particularly important. The current trend of building ships too large to fit through these canals is creating new challenges for the industry.
Other key waterways include the Bosporus Strait in Turkey connecting the Mediterranean with the Black Sea and the Saint Lawrence Seaway in North America connecting the Great Lakes with the Atlantic Ocean.
Some canals are less frequently used, such as the Corinth Canal in Greece.
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The Gatun Locks on the Panama Canal
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The Suez Canal
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. . .where is the water?
The Corinth
Canal
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Airport Infrastructure
Runways – their length determines whether an airport
can handle large cargo planes; the number of runways determine its capacity.
Space - most airports are landlocked and cannot expand.
Hours of operation - airports need to be located away from of major cities if they are going to operate at night. Many airports do not meet this requirement.
Warehouse storage facilities – are critical to protect cargo
from the elements.
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Kai Tak Airport
Hong Kong
( closed )
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Chek Lap Kok Airport
Hong Kong
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Railroad Infrastructure
Gauge – when railroads were first built, countries installed unique railroad track gauges to prevent rival armies from using them. Today, these gauge differences prevent trains from traveling quickly between multiple countries.
Multi-modal - cargo rail transport has shifted from traditional railcars to multi-modal cars, carrying either containers or truck trailers.
Land bridge – is the term used when containers are shipped from Asia to Europe through the U.S. railroad network; they arrive in a port on the west coast and are transported by rail to an east-coast port.
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A dual-gauge track in Thailand.
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A double-stack container
configuration on a U.S. train
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Road Infrastructure
Quality – the existence of high quality roadways is important to the continuous flow of goods.
Congestion - in many countries traffic congestion is stifling and prevents goods from moving quickly.
Civil engineering structures - such as bridges and tunnels need to be built in many places in order to conveniently navigate the landscape.
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Russia’s Lena “Highway”
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New Delhi, India
Traffic Congestion
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The Oresund Link –
bridge and tunnel between
Denmark & Sweden
Communication Infrastructure - Mail / Postal Service -
Speed – mail delivery efficiencies globally range from quick to very slow,
Reliability - not all mail is delivered is some countries; it can be lost, abandoned or pilfered.
Delays - postal unions have a great influence and strikes can delay the delivery of important documents.
Competition - firms such as FedEx, UPS and DHL are very reliable, but are generally much more expensive than public postal services.
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Hi-speed postal train
in France
Communication Infrastructure - Telecommunications -
Land lines - some countries have reliable, inexpensive phone lines; others have bad landline telecommunication networks.
Cellular phones - some countries built cellular phone networks quickly, often because they did not have a good landline network; they leapfrogged the landline technology, often offering better cellular access than developed countries having reliable landline networks.
Internet - access to the internet is still limited or cost prohibitive in many areas; a contrast with fast and inexpensive access in others.
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Landline Penetration
| Country | Landlines/person | |
| 1 | Taiwan | 72.6% |
| 2 | Germany | 63.8% |
| 3 | France | 60.5% |
| 4 | Hong Kong | 60.5% |
| 5 | South Korea | 60.2% |
| 6 | Switzerland | 57.7% |
| 7 | Greece | 53.3% |
| 8 | Canada | 52.7% |
| 9 | United Kingdom | 52.4% |
| 10 | Japan | 50.8% |
| 13 | United States | 46.1% |
| 33 | United Arab Emirates | 33.3% |
| 36 | Russia | 31.0% |
| 55 | China | 21.1% |
| 73 | Panama | 15.7% |
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Cellphone Penetration
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| Country | Cell phones /person | |
| 1 | United Arab Emirates | 214.2% |
| 2 | Hong Kong | 212.9% |
| 3 | Panama | 189.2% |
| 4 | Kuwait | 183.1% |
| 5 | Finland | 169.8% |
| 6 | Libya | 166.6% |
| 7 | Russia | 166.1% |
| 8 | Oman | 164.9% |
| 9 | Austria | 158.4% |
| 10 | Italy | 156.2% |
| 23 | Germany | 134.0% |
| 33 | Taiwan | 123.9% |
| 84 | United States | 91.7% |
| 86 | France | 90.7% |
| 111 | China | 73.1% |
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Tangled Wires
New Delhi, India
Utilities Infrastructure
Electricity
Unreliable electricity grids and insufficient production capacity can cause blackouts or brownouts, limiting productivity.
Water and sewer
Access to clean water (and sewers) is fundamentally important for many manufacturing processes.
Energy
Reliable pipelines need to be available to deliver natural gas or oil products to the locations where they can be used.
Theft
In some areas, theft of utilities is common, making it difficult for utility companies to earn a profit and invest in new infrastructure.
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The Alaskan Pipeline
United States
Banking Infrastructure
Foreign currency payments
The ability to quickly purchase and sell foreign currencies, either through wire transfers or currency purchases is of primary importance to firms engaged in international trade.
Methods of payment
The ability of the banking partners to support alternative means of payment and provide assistance to firms engaged in international trade is very important.
Document exchanges
Banks play a fundamental role in the exchange of trade documents between an exporter and an importer.
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Banking Services Infrastructure (1 of 2)
Freight Forwarders
Freight forwarders help determine the best shipping alternatives to firms engaged in international trade
Customs Brokers
Brokers provide assistance to importers when clearing Customs.
Couriers
Couriers allow firms to ship documents and small parts using the “next available flight.”
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Banking Services Infrastructure (2 of 2)
Packing services
Packing services allow exporters to rely on professionals to pack goods destined for export.
Multiple other services
Carriers, delivery services, etc. are fundamental to implement good international trade practices and must exist for exporters to be successful.
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Distribution Channel Infrastructure
Agents and distributors
A strong network of agents and distributors allows an exporter to enter new markets and expand abroad.
Retail distribution
Efficient access to consumers is important to a manufacturer of consumer goods and is not available in all countries.
Advertising and promotion
Advertising agencies and media offer promotional activities critical to the success of many products and services.
Trade shows
For most industries, trade shows present an unequaled opportunity to reach potential customers and trade partners.
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Court Infrastructure
Speed
Speedy resolutions of lawsuits allow businesses to “move on.” Some countries have slow and cumbersome court processes.
Arbitration
Disputes can be resolved faster via arbitration. The existence of experienced arbitrators is important to the conduct of business.
Mediation
Disputes can also be resolved through mediation; therefore a group of mediators is often useful to resolve disputes.
Fairness
In some countries, the court system is perceived as corrupt or unfair and hinders good business relationships.
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Intellectual Property Infrastructure
Protection
Businesses with intellectual property (patents, copyrights, trade secrets) want to make sure that the countries in which they operate will protect intellectual property.
In some countries, competitors, police and courts do not respect nor protect intellectual property, often considering intellectual property laws favor big foreign corporations over the local entrepreneur trying to earn a living.
International Agreements
Many countries have not ratified international agreements on intellectual property and therefore do not recognize some aspects of foreign patents and copyrights
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Standards Infrastructure
Countries have different standards for products and services offered for sale; these standards are specific and must be followed.
Safety
Safety requirements often differ from country to country. Such is the case for vehicles, appliances, and hotels, for example.
Design
Product designs are often dictated by local conventions (electrical supply and plugs, plumbing sizes and pressures, and telecommunication standards, for example).
Performance
Several countries have performance standards for products, dictating what can be called “natural,” “organic,” “premium,” and so forth.
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