Question

Describe the 14 steps in a typical international trade transaction.

Discuss the role of technology in new-product development, including the concept of “creative destruction.”

Answer 1

14 STEPS IN A TYPICAL INTERNATIONAL TRADE TRANSACTION

1. The importer places an order with the exporter and asks if he is willing to export according to the letter of credit.

2. The exporter agrees to ship a letter of credit and specify relevant information such as prices and delivery terms.

3. The importer bank is responsible for issuing a letter of credit in favor of the exporter for the goods the importer wishes to purchase.

4. The importer's bank issues a credit letter in favor of the importer and sends it to the exporter's bank.

5. The exporter's bank informs the exporter that he has opened a letter of credit in his favor.

6. The exporter exports in a common carrier of goods to the importer. The bill of lading is given by an official of the carrier to the exporter.

7. The exporter submits to the exporter's bank a 90 day time draft by the improper bank in accordance with the letter of credit. The exporter approves the bill of lading, so the goods title is transferred to the exporter's bank.

8. The draft and bill of the exporter's bank landing is sent to the importer's bank. The importer's bank accepts the draft, seizes the documents and promises to deliver the currently accepted draft within 90 days.

9. The draft received by the importer's bank is returned to the exporter's bank.

10. The exporter's bank tells the exporter that he has received an acceptable bank draft, which will be paid within 90 days.

11. The exporter sells the draft to its bank at a discount from its face value and instead accepts the discounted cash value of the draft.

12. The importer’s bank will notify the arrival of the documents to the importer. He agrees to pay within 90 days. The importer can take holding of the shipment when the importer's bank releases the documents.

13. Within 90 days, the importer's payment is received by the importer's bank, so there is funds to pay maturing drafts.

14. Within 90 days, the holder of a matured receipt will submit it to the importer's bank for payment. The importer's bank will pay.

ROLE OF TECHNOLOGY IN NEW PRODUCT DEVELOPMENT INCLUDING THE CONCEPT OF ''CREATIVE DESTRUCTION''

In developing a new product, technological factors plays an important role for the best result. Depending on the product the developers use different types of technologies. The technology and the poducts are changing frequently through the innovations takes place. Using technologies companies can develop innovative and competitive strategies to make value adding products without wasting resource and time. Using technoogies we can implement competitive analysis and analyse the competitors, products and their marketing strategies. We can do technology roadmapping to support the long term plans. It can find the relationship between developing markets, products and technologies. Also organize the functional elements of the product through the product architecture. Using technology the developers can map the customer, product driver and targets. The supply chain of the product can be analysed by the efficient use of technology.

Creative destruction is eliminating long standing practices that lead to innovation. It helps in free up of resources and energy for innovating process. It helps an organization achieving the organizational goal and avoiding the non value adding activities. It also helps to reduce time and wastages of production.