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By now, everyone has seen the news that China has devalued its currency. This means the Yuan Renminbi is weaker. When you exchange currency, you can now buy more Yuan for each dollar spent. If China is really the world’s second largest economy, than the Renminbi (People’s Currency) effects world markets. China is always accused of currency manipulation. Who is to blame? Who can be blamed in international business?
This is being criticized by every foreign government and many businesses that trade with China. After all, if Chinese money is weaker, that means that US products sold into China become more expensive. Take the example of Mandarin Oranges for sale in China, but imported from the USA. An 8 kg box costs between $20 and $30. With the weaker Chinese currency, this could cost 25 percent more this year. Thus, the imported oranges are more expensive and the Chinese will buy less of them from the USA, critics say.
On the flip side, items we buy from China will cost less. Importers of (e.g.) Chinese toys will pay less. If the US importers keep the price constant, then the importers will benefit and make more money.
Here is the problem. If your firm is selling a price-based commodity to Chinese buyers (rice, soy, oil, hogs, corn, cotton, etc.) your sales may suffer because your price is too high.
But if you are selling iPhones or BMW’s, the higher price may not matter. Higher prices may even work as an advantage, because the products are more expensive and hence more prestigious. Are we really going to once again, blame currency instead of the real problem….our laziness to go after and service global markets efficiently?
The savvy leader is inclined to search abroad for any and all potential new markets for their product or service. New markets offer the possibility of increasing total revenue and/or decreasing the costs of goods sold, thereby increasing profits. Entering new markets may also allow a company to follow its existing customers abroad, attack competitors in their home markets, guarantee a continued supply of raw materials, acquire technology or ingenuity, diversify geographically, or satisfy the stockholder’s desire to expand.
In many cases, with many companies, it is survival. There simply isn’t enough domestic demand to keep many firms in business, without going overseas.Hence the need for International Business.
Once management has made the decision to expand and has determined the target market or markets, the next question is obviously, “how”. Selecting a mode for entering or expanding in a foreign market is one of the most crucial strategic decisions that can be made by a company. Weighing all factors and choosing the proper mode of entry can result in huge competitive advantages, while making a poor decision can lead to the demise of the company.
Often, international people without the knowledge base or the necessary contacts are tasked with “going international.” 99% of the time, they will fail.
Foreign market penetration can be done by a variety of different methods; each possibility should be assessed before the process begins.
2016 looks to be a breakout year for the industry as senior executives’ eyes are on the technology’s potential. The industrial market for 3D printing real end-use parts looks poised to begin its long growth run, with far reaching implications. 2016 will likely usher in 3D printing’s first “killer apps,” impacting both product design and supply chains. No matter what, 2016 will be a year when leaders across industries will be compelled to pay close attention to the emerging opportunities and disruptions that 3D printing is creating.
Here are eight 3D printing trends to watch in 2016.
1. Consumer Market Drop
It appears they may be late to the party. 2015 marked the end of the 3D printing consumer market hype cycle with Stratasys (the acquirer of MakerBot) taking massive write-offs and 3D Systems shutting down its entire consumer unit in December. With prospects dimming for the short-term consumer market, attention will quickly turn toward 3D printing’s area of greatest promise — industrial applications.
2. Pushing The Limits Of Technology
While GE and Ford have touted their rapid progress with 3D printing, many others are achieving some incredible accomplishments. Look for exciting announcements about exotic new 3D printing materials such as glass and graphene and 3D printed objects that shatter the previous limitations on shape and size. These “big area” 3D printing machines hold the promise of manufacturing an entire airplane wing structure or blades for massive wind turbines in a single print.
3. Outsourced 3D Printing Gains Share
Most internal design shops have access to an in-house “pro-sumer” 3D printer. But despite advances in the technology, these printers remain difficult to use, often result in print errors, and are subject to traffic jams when everyone wants to print something at the same time. As the speed and sophistication of external providers has increased dramatically, with some now guaranteeing 24-hour production/delivery, many engineers and designers are ditching their internal printers in favor of a external service providers. Many firms feel they don;t have to buy a machine at all.
So what can our importer do?
• First, it should be certain it’s compliant, and can learn how to be so by talking to a customs broker about the appropriate duties and tariffs.
• Find out if there are special impediments to importing a given product. This will help the company decide if this endeavor is going to work at all. If our toothbrush was made of camel hair, for example, it may require approval from a fish and wildlife department. If the firm was importing a potentially perishable product, concessions might be made to expedite the shipment.
• Customs examination is a large roadblock in importing. This happens when U.S. customs officers decide the paperwork alone isn’t sufficient to allow the shipment into the United States, and they’ll have inspectors look inside the box to see what’s really there. Remember, just because U.S. Customs decides to hold your shipment doesn’t mean that those clocks stop ticking.
In a customs exam, the importer has to pay for truckers to pick up and deliver the shipment to a customs warehouse. The importer has to hire labor to open up the boxes (customs officials don’t do this). Once the inspections have been completed, assuming everything is OK, the boxes need to be reloaded and shipped to the importer’s warehouse. If there’s damage or difficulty in reloading the container back on the truck, this presents more delays and costs.
So far, this seems like a nightmare. But it doesn’t happen every day, and when it does, it happens for a reason: The U.S. customs department exists to protect the United States.