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International

Business
Lecture No,45
By
Dr.Shahzad Ansar

Other strategic concerns include:


Global concentrationonly a few
major players in a global industry
Global synergiessharing
functional expertise with overseas
operations
Strategic motivationsreasons for
exporting

EXPORT & IMPORT


Characteristics of Exporters
Companies that export:
More likely to be large (as
defined by revenues)
Are more likely to have risktaking managers
Operate in industries where the
leading companies

EXPORT & IMPORT


Why companies export
Increased sales revenue most
important motivation to export
Alleviate excess capacity
Exporting less risky than FDI
Countercyclical investment
diversification

EXPORT & IMPORT


Stage of export development
three broad phases
Stage unrelated to size of the
company
Availability of Internet has
increased company interest in
exporting

Phases of Export
Development
Preengagement

Phase 1

Phase 2

Companies selling goods and services solely in the


domestic market
Those companies considering but not currently exporting

Initial Exporting
Companies that do sporadic, marginal exporting
Companies that see lots of potential in export markets
Companies unable to cope with exporting demands

Advanced

Phase 3

Companies become regular exporters


Companies gain extensive overseas experience
Companies may use other strategies for entering markets
6

Structure of an Export
Business Plan
I.

Executive Summary

II.

Business History

III.

Market Research

IV.

Marketing Decisions

V.

Legal Decisions

VI.

Manufacturing and

Operations
VII.

Personal Strategies

VIII.

Financial Decisions

IX.

Implementation Schedule

Pakistan Exports
Cotton Fabrics :

Export of Cotton Fabrics came up to $


1.863 Billion from $ 1.711 Billion in the year
2004-05 as compared with 2003-04. showing an
increase of 9 % in A.U.P. However a decrease of
0.4% is recorded in Quantity which came down
to 2399.5 Million Sqm. From 2409.4 million Sqm.
Major buyers of the product were USA, Turkey,
Hong Kong, U.A.E. and Italy.

Garments : Export of Garments increased by 11%,


contributed 18.9% in the total Pak
export during 2004-05.
Hosiery went up to $ 1635 Million in the
period under review 2004-05 as compared
$1459 Million in last year. Upward trend was
witnessed in exports to USA,

Ready Made Garments; An


increase of $94.6 million i.e. 9.5% is
recorded in the export of the
readymade garments.
Rice went up to $932.55 million
from $ 634.46 million showing an
increase of 47%.

Leather and Leather Products


Showing an increase of 26%, exports
of Leather and Leather Products went
up to $ 938.5 Million from $ 744.1
Million.
Leather Gloves; Registered an increase
of 132.4% from $ 70.7 million of the
previous year to $164.3 million.

Surgical Instruments; The exports,


which were $ 132.56 Million in 2003-04
came up to $ 182.88 Million in 2004-05,
showing an increase of 38%.
Sports Goods; From $ 325 Million in
2003-04 the exports came down to $
307 Million in 2004-05, showing a
decrease of 5.4%.

EXPORTS
1994-95 $8.1bn
1995-96 $8.7bn
1996-97 $8.3bn
1997-98 $8.6bn
1998-99 $7.8bn

Pak Total Exports


Total Exports 02-03 US$ 11.03
Billion
Total Increase US$ 1.896 Billion
Total % Increase 21%
Exports as % GDP 17%
% World Trade 0.17%
5 years Compound Growth Rate 5

Export Growth
Comparison with selected countries

COUNTRIES CAGR
JAPAN 0.76%
MALAYSIA -1.75%
KOREA 0.88%
PHILIPPINES 6.25%
INDIA 6.85%
CHINA 9.84%
USA 0.88%
UK 0.77%
SINGAPORE -0.65%
PAKISTAN 5%

Exports 2005-06 at a Glance

Value in Million US$

IMPORT EXPORT 2006-7


2006-7 JULYOCT

2005-6JULYOCT

EXPORTS 5,552

5,478

IMPORT 9,560

8,877

FDI IN PAKISTAN
Foreign Direct Investment (FDI)
has been recognized the most
powerful and strategic weapon
for transforming a traditional
economy of a nation into a
modern economy by
accelerating the pace of growth
and development.

FDI
Pattern of FDI Inflows: Till the end
of December 2003, Pakistan had
attracted a amount of FDI, US $ 227
million. By the end of December
2004 the total FDI inflows to
Pakistan amounted to US $ 445
million, which is higher by 96 per
cent over the figure of 2003.

FDI
Official figures released by the
State Bank showed that up to
September 2002, in(2006), an
investment to the tune of $42.096
million flew into Pakistani stocks.

During July-August 2006-07, FDI


reached $375.4 million against $230.8
million during the corresponding
period last year, showing a rise of 63
per cent