Overview
GM-Challenges are intended to help you appreciate the resources available and challenges associated with global marketing. These assignments have you assume the role of an assistant international trade specialist for a specific company. In this capacity, you will engage in research and evaluation of various global marketing topics. Your efforts will focus on a specific country (i.e., YOUR COUNTRY) and a specific US state (i.e., YOUR STATE) both of which are assigned to you for the course. In addition, you will have a specific company (i.e., YOUR COMPANY) and a specific product (i.e., YOUR PRODUCT) derived from the Journey Prep Assignment.
GM-Challenges involve your responding to memos from your manager. Your responses will require the collection, analysis, and concise provision of the information requested of you in a business memo format. The rubric for this assignment is provided.
YOUR COUNTRY/YOUR STATE/YOUR COMPANY/YOUR PRODUCT
The list with the country (YOUR COUNTRY) and US state (YOUR STATE) which you have been assigned for the course is in Module 1. YOUR COMPANY and YOUR PRODUCT were approved from the options in your Journey Prep Assignment.
GM-Challenge 3: Payment/Financing Considerations
Your managers memo to you is below. In it your manager is giving you tasks to perform. You are not expected to already know the answers, just be able to find and use the resources available to develop a thorough and accurate response.
Your response should use a standard business memo format. A standard business memo with its parts can be found in Module 1. An example of a partial GM-Challenge memo is provided HERE Download HERE.
To start, your memo should state its overall purpose. This reminds the manager what s/he requested you to do. Next, respond to the assigned tasks.
Each written response should briefly restate what you were asked to do. That should be followed with a thorough and accurate written response that summarizes the source information you found. Your written response should then be supported with (A) images that show the specific source info you used, and (B) a weblink directly to that info below the image(s) so your manager knows how to retrieve and review that info later. Number your responses and respond to the tasks in sequence. Finally, you may choose to provide a conclusion to your memo.
Details on how to insert a supporting image into your GM-Challenge using the screenshot or screen clipping tools can be found HERE.
Important notes regarding supporting images: Supporting images do not replace your written response, they only show the source info used. Supporting images should be visible, not be provided as files. Screen clip them and paste them into your response. Supporting images should be readable so stretch them to make them large enough to be legible.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
To: You
From: Your Manager
Date: February 18, 2024
Subject: Payment/Financing Considerations
YOUR COMPANY is trying to evaluate payment and financing options for a pending transaction. Below are some questions that have been raised. Cheryl was handling this effort but had to travel abroad again so you have been tasked with helping locate and provide the information. She did leave some of her initial sources.
The information you provide will help YOUR COMPANY consider which options might be appropriate.
Your efforts will focus on the specific tasks below. Respond using the numbers and sequence provided. As always, your responses should follow the Russian proverb, “Doveryay, no proveryay” translated, Trust, but verify.” Thus all your responses require supporting images with a weblink to each. A selection of sources you might find helpful are included. If they are not functioning correctly, seek another resource.
1. What is the currency of YOUR COUNTRY. What is the abbreviation for that currency. Provide the current exchange rate between the US dollar (USD) and that currency.
Use the xe.com website HERELinks to an external site. to determine the currencys abbreviation and current exchange rate for one USD.
2. The commercial invoice YOUR COMPANY is preparing for a customer in YOUR COUNTRY has a price quote of 100,000 USD (CIF) in 180 days on March 22, 2024. The company is trying to consider how much foreign exchange rate risk there may be with the sale. They want to know how the foreign exchange rate between the USD and the currency of YOUR COUNTRY has changed over the last year. Display and discuss that change.
The charts tool on the xe.com website HERELinks to an external site. can display exchange rate changes across various increments of time. Use that resource to get the image and for your discussion.
3. To help make the foreign exchange rate risk more real, provide an example. If an export sale valued at 100,000 USD had been completed 180 days ago with payment received today in the currency of YOUR COUNTRY, how many more (or less) USD would YOUR COMPANY have received?
Calculate the foreign exchange rates on the dates below. Then indicate how many more (or less) USD that YOUR COMPANY would have received.
NOTE: Hover over the date you want and a vertical line will show as you move among the dates to see the specific price.
Indicate the exchange rate between the USD and YOUR COUNTRYs currency 180 days ago.
USD __1_____ = __________ USD _100,000_ = __________
Indicate the exchange rate between the USD and YOUR COUNTRYs currency today.
USD __1_____ = __________ USD _100,000_ = __________
4. To help YOUR COMPANY assess company-specific risks, determine whether credit reports or other similar resources are available for companies in YOUR COUNTRY from the US Commercial Service local office? Any info on the cost and time involved for report delivery would be helpful. Discuss how/where to get the process started.
The US Department of Commerce has an International Company Profile service HERELinks to an external site. that can provide background check info on a specific foreign company to help a company assess its creditworthiness.
5. To help YOUR COMPANY assess company-specific risks, are credit reports or other similar resources available for firms in YOUR COUNTRY from private companies like Coface for Trade, GraydonCreditsafe, or FCIB? Any info on the cost and time involved for report delivery would be helpful.
Coface for Trade, GraydonCreditsafe, and FCIB are some of the firms offering US companies credit info on foreign buyers. Check whether the services are available for YOUR COUNTRY at the companies’ websites HERELinks to an external site., HERELinks to an external site. and HERELinks to an external site.. Discuss how/where to get the process started for ONE of the three sites (that you find info on your country).
6. YOUR COMPANY wants some info with regard to any export financing options that may be available.
Export-Import (Ex-Im) Bank of The United States has Bank Loan & Guarantee Programs, Export Credit Insurance, and a Working Capital Guarantee Program available for US exporters. Which ones of those three options are available for US companies exporting to YOUR COUNTRY?
Check the Ex-Im Banks Country Limitation Schedule to see if these programs are available for YOUR COUNTRY HERELinks to an external site..
7. If YOUR COMPANY is eligible for a Small Business Association (SBA) export loan program, identify an SBA approved lender in YOUR STATE (or a neighboring state) that participates in the SBAs export loan programs. Include an image of that financial institution’s website.
Info on the SBA’s participating export lenders is available HERELinks to an external site..
8. Identify one financial institution in YOUR STATE (or a neighboring state) that handles global trade finance. Export letters of credit are the payment method of specific interest. YOUR COMPANY is considering this option and would like to know what financial institution in YOUR STATE handles these. Provide the financial institution’s website and contact information for the institution and a person in it (if a specific person can be identified). Provide the SWIFT code for this financial institution.
A useful resource to identify institutions may be trade finance award winners at the weblink HERELinks to an external site..
When someone needs to transfer money between financial institutions internationally, a key piece of information is the SWIFT code. It is a standard code used to identify a specific bank. Use the financial institution in YOUR STATE you identified and the search tool HERELinks to an external site. to find its SWIFT Code.
9. Identify one financial institution in YOUR COUNTRY that handles global trade finance. Export letters of credit are the payment method of specific interest. YOUR COMPANY is considering this option and would like to know what financial institution handles these in YOUR COUNTRY. Provide the financial institution’s website and contact information for the institution and person in it (if a specific person can be identified).
Use the financial institution in YOUR COUNTRY you identified and the search tool HERELinks to an external site. to find its SWIFT Code.
10. YOUR COMPANY may choose to use forfaiting to handle export financing. YOUR COMPANY may choose to obtain cash by selling the letter of credit at a discount to a specialized finance company or bank. The company/bank (the forfeiter) will then assume the risk of non-payment by the importer. Identify one US-based company/bank that provides forfaiting services. Provide the organization’s website and contact information for the institution.
The International Trade and Forfaiting Association (ITFA) is a useful source for locating forfaiters willing to finance exports. It is the worldwide trade association for over 300 financial institutions engaged in forfaiting or receivables financing. US-based members of can be located at the organizations website HERELinks to an external site..
