Free Online Course in International Business

Product and Market Overview

This section can be developed from the assumptions made in the market analysis and potential section.  This section should include facts about the company such as the following:

·        All beef is born and raised in the United States.

·        All beef is fed natural grains with no hormones or additives.

·        All beef is slaughtered in a humane way.

·        Domestic distribution is the fastest in the nation.

·        The company supplies 30% of all beef distributed in the United States.

·        Inclusion of any current overseas markets where there is distribution and the success of market penetration

Market Analysis and Potential

Evaluate the potential country(ies) as requested.  The analysis should include the following:

·        Country demographics that pertain to the distribution of your product, such as ports, roads, railroads and any logistical problems that might be present

·        Per capita income that would enable people to buy your product

·        Cultural issues that might impact the population’s decision to buy your product (religious, vegetarian, etc.)

·        Any marketing issues that may influence the purchase of your product, including the treatment of the animals through the growth and slaughtering process, the way the cattle were raised, the local competition and any product and/or packaging adjustments that may be required.

·        Any political issues between the United States and the country in question that would influence your ability to penetrate their markets.

·        The ability to convert their currency to US dollars and repatriate your profits

·        The ways you intend to distribute the product by contracting with a distributor or through direct sales with your own sales force.

Funding Rationale

Here build your case for the funding required to meet the objectives set forth in your market analysis and potential.  This section should include all entities from which the company can seek funding:  Ex-Im Bank, SBA and insurance programs.  Explain the ways to qualify for each.

Financial Statements

Global Meat Distributors, Inc.

Balance Sheet

December 31, 20XX

Current Assets                                                                             000’s omitted

      Cash                                                                                        $        150,000

      Inventory                                                                                       1,785,000

      Prepaid Income Taxes                                                                       35,000

      Deposits                                                                                                1,500

                  Total Current Assets                                      $    1,971,500      

Current Liabilities

      Accounts Payable                                                                  $        800,000

      Note Payable to Bank                                                                     400,000            

                  Total Current Liabilities                                            $     1,200,000

Long Term Liabilities

      Subordinated Debt                                                                $        150,000

Stockholders’ Equity

      Common Stock                                                                      $            3,000

      Retained Earnings    

                  Current Year                                                                        169,400            

                  Prior Year                                                                             449,100

                  Total Stockholders’ Equity                                       $        621,500

Global Meat Distributors, Inc.

Income Statement

December 31, 20XX

                                                                                                      000’s omitted

Sales                                                                                             $     7,700000

Cost of Sales                                                                                        7,000,000

      Gross Profit                                                                            $        700,000

Selling and Administrative Expenses                                                  440,000

      Operating Profit                                                                    $        260,000

Bank Interest                                                                               $          36,000

      Pretax Profit                                                                           $        242,000

Income Taxes                                                                                           72,600

      Net Profit                                                                               $        169,400

The following ratios should be calculated using the information provided on Global Meat Distributors, Inc.:

·        Current ratio

·        Quick ratio

·        Accounts receivable turnover

·        Average collection period

·        Debt to equity ratio (the subordinated debt listed on the balance sheet is a loan to the company by Anthony Masters and should be removed from the debt section and added to the equity for the calculation of this ratio)

·        Return on assets

Source Materials

Include in this section all research materials used.

Activity 2:  Internet Research

This is a much shorter activity and can be used in conjunction with the project above or as a separate assignment.

Have each student visit the websites for:

·        Ex-Im Bank

·        SBA

·        One Factoring Company (one the student finds)

·        One Private Bank (one each student finds, each selecting a different bank)

Identify the funding available from each organization and the requirements for funding.

Assessment

1.                     Export-Import (Ex-Im) Bank of the U.S. country limitation schedule indicates the term and availability for

a.      the private and public sector for terms of up to one year, one to seven years and over seven years.

b.      the public sector for terms of up to one year, one to seven years and over seven years.

c.       the private sector for terms of up to one year, one to seven years and over seven years.

d.      the private and public sector for terms of up to one year and one to seven years.

2.                     Ex-Im Bank has a minimum United States material content.  Which of the following percentages meets that requirement?

a.      50%

b.      49%

c.       15%

d.      30%

3.                     What best describes why export credit insurance is purchased?

a.      to provide a product warranty in the event there is a dispute about the product delivered

b.      to provide protection against political upheaval only

c.       to provide a guarantee that the product shipped will reach the final destination

d.      to provide financing options, protection of payment terms, to cover political and commercial risk

4.                     Ex-Im Bank’s mission is to expand employment and income opportunities through

a.      imports of goods, services and agricultural commodities for small and medium size businesses.

b.      imports and exports of goods, services and agricultural commodities for small and medium size businesses.

c.       exports of goods, services and agricultural commodities for small and medium size businesses.

d.      providing direct funding for all businesses that export products that are manufactured entirely in the United States.

5.                     All banks have different requirements for lending money to businesses, but their minimum requirements to support a loan when the collateral is exclusively tied to the business are

a.      minimum of two years in business, a positive net worth, and unprofitable annual income.

b.      minimum of two years in business, a negative net worth, and profitable annual income for the past two years.

c.       new business with a positive net worth.

d.      minimum of two years in business, a positive net worth and consistent annual profitability.

(Correct answers: 1=a, 2=b, 3=c, 4=c, 5=d)