Import Opportunities
Import Opportunities
The impetus for trade involvement may come from either the exporter or the importer. In either case, there must be both a seller and a buyer. Impetus may come from an importer because a firm is seeking out cheaper or better-quality supplies, components, or products to be used in its production facilities. Or a firm may be actively seeking new products that have been developed abroad in order to complement its existing lines. This will give the company more to sell; it might also enable the importer to use excess capacity in its own distribution sales force.
If international procurement of supplies and components lowers costs or improves the quality of finished products, the procuring company may then be better able to combat import competition for the finished products. Or the procuring firm may be able to compete more effectively in export markets itself. The automobile industry exemplifies global competition that depends on subcontractors, including foreign ones, to reduce production costs.28
An importer, like an exporter, might be able to spread its operating risks. By developing alternative suppliers, the firm is less vulnerable to the dictates or fortunes of any single supplier. For example, many large steel customers in the United States, such as the automobile industry, have diversified their steel purchases to include European and Japanese suppliers. This strategy has reduced the risk of supply shortages for the U.S. automobile industry in case of a strike among steelworkers in the United States, but at the same time, it has contributed to the problems of the steel industry within the United States.
The impetus for trade involvement may come from either the exporter or the importer. In either case, there must be both a seller and a buyer. Impetus may come from an importer because a firm is seeking out cheaper or better-quality supplies, components, or products to be used in its production facilities. Or a firm may be actively seeking new products that have been developed abroad in order to complement its existing lines. This will give the company more to sell; it might also enable the importer to use excess capacity in its own distribution sales force.
If international procurement of supplies and components lowers costs or improves the quality of finished products, the procuring company may then be better able to combat import competition for the finished products. Or the procuring firm may be able to compete more effectively in export markets itself. The automobile industry exemplifies global competition that depends on subcontractors, including foreign ones, to reduce production costs.28
An importer, like an exporter, might be able to spread its operating risks. By developing alternative suppliers, the firm is less vulnerable to the dictates or fortunes of any single supplier. For example, many large steel customers in the United States, such as the automobile industry, have diversified their steel purchases to include European and Japanese suppliers. This strategy has reduced the risk of supply shortages for the U.S. automobile industry in case of a strike among steelworkers in the United States, but at the same time, it has contributed to the problems of the steel industry within the United States.
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