Case Study Exam in International Commerce

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Case Study Exam in International Commerce

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Themes

International commerce, payment methods, case study, commercial invoice, distribution, production, artisan process, consignee, customs tariff, references, marketing, PCA Partnership and Cooperation Agreement, custom value, shipping costs, customs tariff rate, cost of postage, cost of insurance, cost of transport, cost of shipping, bank transfer, documentary credit, manufacture

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Abstract

The document includes the answers to a case study exam in international commerce.

Excerpt:
"The company; Monper offers a variety of chocolate products.
The company moves away from industrialized and mass-produced products and produces chocolate with 100% artisan process that protects the flavor, aroma and texture of the chocolate.
The consignee: Tiendas Soriana SA de CV is specialized in the distribution and production of basic consumer goods. This includes frozen grocery products, food products and personal care products. Its headquarters are located in Mexico at Alejandro de Rodas 3102 A Col Cumbres 8 Sector Monterrey, NL CP 64610."

Extract

[...] This method of setting up allows you to control the sales price on the market but does not allow you to control the image of the product and the company. This is why it is a good way of getting started and then considering the recruitment of a local employee. The competitive strategy to implement would be the strategy of differentiation. The Monper Chocolate products can be distinguished by the sophistication of the product (manufactured artisanally in Spain) while having a sufficient purchasing potential. [...]

[...] Higher tariffs are applied to sugars and confectionery, beverages and tobacco, dairy products and clothing but thanks to the trade agreement between the EU and Mexico during the year 2000, the customs duties are removed on products such as chocolate (currently up to As a result of the EU-Mexico trade agreement in 2000, trade between the two sides has increased at a rate of about 8%. The Mexican market is an obvious choice in terms of costs. However, in the long term, the Australian market is also relevant as the EU is currently entering into free trade agreements that will eliminate tariffs on most lines. In addition, the values of products traded in Australia are based on FOB, which reduces paperwork for suppliers and vendor costs are not subject to freight charges. The Australian market is more relevant for more frequent, long-term trade. [...]

[...] A bank transfer is therefore the appropriate option. In addition, the deposit system reassures both parties. Answer Mexico or Australia These barriers concern the exchanges of goods. The tariff barriers are essentially the customs duties imposed on the entry of goods. Non-tariff barriers are all other barriers such as standards. Mexico Australia Tariff barriers The average MFN duty rate: 5.8% in 2019. [...]

[...] Shipping details: method of dispatch, Type of shipment, country origin, country of final destination, vessel/aircraft name, voyage no, Port Of Loading Port Of Discharge (POD). All this information allows both parties to organize delivery and insure the goods. Reference number: Seller's Invoice number, Date when invoice is issued, Bill of Lading Number, Buyer reference number, Additional Reference (if needed), Terms/method of payment. Product detail: Product Code, Description of goods, HS Code [HYPERLINK: https://incodocs.com/blog/hs-code-hts-code-tariff-explained/], Unit Quantity Unit Type, Price per unit type, Incoterm(R) [HYPERLINK: https://incodocs.com/blog/incoterms-2020-explained-the-complete-guide/] & Place and fees or charges. Bank details for payment: Address, SWIFT or Bank ID, IBAN. [...]

[...] It then refers to all costs of postage, insurance and transport. In this case study, it is important to note that we are only considering shipping without the chocolates, which means that some costs will not be included in this calculation. The cost of shipping for 20 ft container = Transport Torrelavega/Valencia + Port Handling for 20 ft container + Customs clearance + ISPS + FREIGHT COST for 20 ft container The cost of shipping = 1,000 euros + 200 euros + 35 euros + 20 euros + euros The cost of shipping = 8,255 euros The cost of shipping a full 40 ft container = Transport Torrelavega/Valencia + Port Handling for 40 ft container + Customs clearance + ISPS + FREIGHT COST for 40 ft container The cost of shipping = 1,000 euros + 300 euros + 35 euros + 20 euros + 12,000 euros The cost of shipping = 13,355 euros The CFR includes FOB and sea freight price for one unit of chocolate = cost of shipping + T3 port taxes + The B/L + SRC + Logistics management for 20 ft container price for one unit of chocolate = 8,255 euros + 5 euros + 50 euros + 10 euros + 100 euros price for one unit of chocolate =8,420 euros for 40 ft container price for one unit of chocolate = 13,355 euros + 5 euros + 50 euros + 10 euros + 100 euros price for one unit of chocolate = 13,520 euros The choice of the means of transport depends on various elements such as the needs of the goods in terms of speed, the volume of the goods, the frequency of the transaction or the added value of the product. [...]

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