Please read this brief case and answer the related questions.
Case Study: Certified Worldwide LLC
(Source: Basic Guide to Exporting, ITA 2012)
Certified Worldwide LLC (CW) has made health and nutrition its business. Hal Selim, director of business development for CW, says his company’s success doesn’t just hinge on the more than 10,000 products and 500 lines of over-the-counter medicines, vitamins, supplements, and sports nutrition; it also depends on great worldwide customer service.
Located in Moorpark, California, CW started in 1999 with sales to distributors and to online customers in the United States through its e-commerce Web site (www.medicalprovisions.com). CW later began to pursue international opportunities by identifying overseas distributors who could help streamline the selling process abroad. “We recognized that by not exporting, we were not tapping our full sales potential —sort of like leaving money on the table,” says Selim. He could see demand picking up in emerging markets, particularly Latin America.
He soon began learning the ins and outs of import regulations for foreign countries and Food and Drug Administration (FDA) export certification issues, such as obtaining the health certificates that many foreign countries require for health-related products. Addressing these issues was key to navigating the export process. “When you think about the documentation required and other areas where we needed assistance, it was sort of daunting as to where we would begin,” Selim says.
“Getting paid is a key part to running a business, and unless a company has the right payment policies in place, that company is more likely to be subjected to payment scams,” says Selim. Therefore foreign distributors, who are CW’s direct clients overseas, have to be carefully evaluated and selected.
CW also realized that the cost of freight can make or break a deal, as this expense can easily eat up your entire profit margin if you do not choose the most cost efficient transportation solution.
“Also,” Selim remarks, “we have had instances of freight damage and theft when shipping overseas”.
You are CW’s new import/export coordinator. CW has started exporting about a year ago but is still learning as it goes. Your new boss, Hal Selim, has asked you to write him a memo giving him some advice in order to improve his chances of success in exporting.
Please include the following:
CW’s international product policy (local adaptation or international standardization?) (10%)
Strategy on seeking new clients overseas and distribution channels? (10%)
Which payment method would you choose and why (explain the process to him)? (10%)
International shipping (what incoterm and why?) (10%)
Customs procedure and the importance of government relations. (10%)
How to deal with a government official if he/she asks bribery from you? (10%)
Please provide him with consultant advice relevant to his situation, using the course lecture material. Need to include bullet points but each point needs a short explanation.