Post on 03-Jan-2016
Team 2:Aornaba Chaudary
Aditya Mahajan
Ilkin Ilyaszade
International Trading Environment
BASM 530
February 3rd, 2010
Project 2
Agenda
Introduction of the Idea Demand in Destination Market Competitive Advantage of Exporting Country Comparative Advantage Financial Costs Trade Costs
The idea: Importing Specialized Sports Apparel
Imports & Expenditures on Clothing
85
90
95
100
105
110
115
2003 2004 2005 2006 2007 2008 200926000
27000
28000
29000
30000
31000
2003 2004 2005 2006 2007 2008 2009
Imports from Sri Lanka Expenditures on Clothing in Canada
Competitive Advantages
Cheap Labour Costs– Average Hourly Labour Cost (Wages and social charges - in
US $)
Country 1992 1998 2000
Canada 10.5 13.93 14.29
USA 10 12.97 14.24
Mexico 1.7 2.23 2.2
Sri Lanka 0.49 0.46
Korea 3.8 3.63 5.32
Competitive Advantages
Literate labor force
Major Challenge
High Lead Times
- Inefficient Fabric Base
Financial Analysis
Costs calculated for 500 Kimonos
Manufacturing Costs 5,000 US $
Freight Charges 1,987.5 US $
Import Duties 900 US $
Total Cost 6,097.5 US $
Financial Analysis
Costs Calculated for 1 Kimono
Total Cost per unit 12.195 US $
Selling price per unit 50.00 US $
Profit per Kimono 37.805 US
Trade Costs
Political Separation– Exchange Rate Trend
Physical Separation– Shipping costs– Customs Tariffs While Importing– Export Duties
Relational Separation– Himashanta—Our Local Contact
Exchange Rate Trend
1/Jan/2000 - 31/Dec/2009
© 2010 by Prof. Werner Antweiler, University of British Columbia, Vancouver BC, Canada.
Conclusion