STT

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Advertages and
disadvantages of
Documentary credit.

Among many methods of payment in international trade, Documentary Credit, which is often
referred as L/C, is the most common one. However,...
- Safe and convenient - reduce the risk of non-performance by both sides.
+ International trade -> different countries -> difference of time btw dispatch & delivery.
Obviously, the Seller desires to be paid ASAP while the Buyer tend to delay payment till
receipt of goods.
-> L/C eliminate credit risk and importer can have its shipment assured.
+ Assurance from bank: check documents strictly upon terms.
- Cost and time-consuming:
+ Include issuing, negotiating and other fees
+ Complicated, have to meet all requirements to receive goods and payment
What are the advantages and Same above
disadvantages of letter of
credit?
What are the advantages and A method of payment in international trade. Means that goods are delivered before paymen is
disadvantages of open
due, usually 30 - 90 days...
account method of payment? - Liberalization to international transactions -> competitive in global market.This payment term
involves the fewest restrictions and the lowest cost for the Buyer.
- Saving time/ money for both exporter and importer as they deal directly with each other not
much involvement of banks.
- Highest risk for exporter:
+ Buyer defaults on payment obligation. Under an open account payment method, title to the
goods usually passes from the Seller to the Buyer prior to payment and subjects the Seller to
risk of default by the Buyer
+ there may be a time delay in payment, depending on how quickly documents are exchanged
between Seller and Buyer.
Open account is typically used between established and trusted traders
Advertising is a major component of any company's marketing plan. They are useful to both
consumers and producers. However,...
- To consumer: Information about products. people will know well the product.
To seller: Sell more goods -> increase sales.Help companies communicate their brand's value
- Cost: adding cost to products
Uncertainty in case of ineffective ads
To buyer: can be different to the real product -> cheated, wrong decision

Positive and negative of

advertising

Do you think that words of

Advertising... Marketers believe that WOM is the best method... Totally agree.
mouth is the best method of - More people tends to have a big trust in word of mouth than other method of advertising.
advertising?
Trust friends or relatives - ads always praise the products - friends or someone tried can know
the real quality of the product - follow their recommendations
- Spread quickly
- Cheap and more targeted/focused. No ones going to talk to you about a great baby clothes
website if you dont have a baby. People only tell you about things that they think are at least
somewhat relevant to your interests.
Today, the high sales of
Absolutely agree
popular consumer goods
- Advertisement is more attractive than reality:
reflect the power of
On the television screen, a product may look gorgeous and good quality. As a result of it,
advertising and not the real people often buy goods without enough
needs of the society in
consideration. Consumers may not actually need it but they buy goods impulsively soon after
which they are sole. To
they watch the advertising.
what extent do you agree or
disagree?
- Follow the trend:
Furthermore, as many customers buy a particular product due to its advertising campaign, the
other people may be affected by the trend, even if the product is not of the real needs of the
society.

Why do businesses insure

their goods against risks?

- Celebrities:
many advertising companies produce advertisements with famous and popular
actors or singers. People, especially youngsters, buy goods that their favorite
singer advertise, although they do not really need the products.
- Insurance helps to avoid losing or damaging the goods during shipping because of fire, nature
disasters, pandemics
Because: Difficult to protect your goods while being transported from a country to another for a
long distance
=> highly damaged by weather conditions, by fire, by humans faults....
- Ensure the liability claims: Exporters usually deliver their goods through a carrier, they will be
in charge of these cargoes
+ in case of damage, the compensation you receive will not be usually based on the value of
the goods,
but usually on their weight => lower than the real value
+ if you can not prove that its due to carriers fault, you will not be compensated
+ force majeure, seller get nothing
=> receive compensation to cover a part of damage or loss

Free trade is good for some Free trade means allowing international business to conduct themselves without barriers such
but bad for others. Discuss as tariffs, duties, quotas and others.
this statement
- Developed countries:
- Infant countries: The harm it can cause to economies at an early stage of development.
Infant industries cannot compete on equal terms against already developed countries that owed
huge capital, economies of scale, high technology, high standard labor and others. They can
easily be overshadowed and swallowed by giant corporations. Over time, the diversity of output
in an economy may diminish as local producers leave the market and only remains products of
others in the markets. It is obvious that, not only domestic producers but also consumers
cannot benefit from trading.
Free trade forces all countries to compete using an even playing field, which critics claim puts
smaller, less developed countries behind their more developed counterparts.
While a country as a whole Agree
will gain from trading with
Benefits: Free trade has numerous benefits for economies.
other nations, this does not
- Develop economy: Trade allows an expansion of the market for businesses beyond the limits
mean that all sections of the of the domestic economy. There will be more variety of goods having higher quality available
community within the country for consumers. This can enhance local producers to improve the quality of their products, so
will benefit. Discuss.
that they can have ability to compete with foreign producers. In addition, trade
contributes to generating thousands jobs for people in countries and have many people have
stable incomes.
- Free trade also allows nations and economies to specialize, producing higher quality goods at
better prices. If a country, for example, has large oil reserves but little land thats suitable for
farming, it can focus on oil production while importing fresh food from abroad.
Downsides:
- Polluted environment in host country -> affect local people
- More competition in workforce. FDI invest developing countries to take advantage of Cheap
labor

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Everyone benefits from free

trade. Discuss. (Ch cn M
bi)
What are the advantages of
international trade to
businesses?

International trade has flourished over the years due to the many benefits it has offered to
different countries across the globe. International trade has many benefits, some of which are
more obvious than others. Give more details:
Expand market and producing scale: First of all, when trading internationally, the universe of
potential clients and suppliers will increase significantly. In all likelihood, this will probably be
much easier than trying to expand your market place in your home country.
Save product: Second, the idea that a business relies solely on one market and directs all its
resources into a single currency may prove to be more risky than it may first seem. Your home
market could contract or even disappear, but your business may be saved by the business it
generates overseas. Products and services is introduced into the new markets, even if they
have become less popular in domestic markets -> Life cycle of product is extended
Reduce seasonal market fluctuation: Third, as well as seeing increased sales, you may well
enjoy better margins. Pricing pressure could be less and it could also reduce seasonal market
fluctuations.

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Globalization makes rich

countries richer and poor
countries poorer. Do you
agree? ( trn cha kha
FTU)

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Some people pay money for

the things they want or need.
Other people trade products
or goods for what they need.
Compare the advantages of
these two ways of obtaining
things. Which way do you
prefer? Explain why?

In conclusion, the international trade accounts for a good part of a countrys gross domestic
product. It is also one of important sources of revenue for a developing country.
As the world grows more connected through the Internet and greater international trade,
globalization is becoming more important and more controversial than at any other point in
history. Globalization brings opportunities but it also brings risks... Increase gap between the
rich and the poor
- Competitiveness - fair playing field but poor has no capital, technology and poor management
-> Harm to countries at early stage of development. Export cheap raw materials, then import
the goods at 10 times their cost
- Movement in workforce.
+ FDI invest developing countries to take advantage of Cheap labor.
+ High quality workforce move to developed countries. After receiving training in their home
countries, many people emigrate and spend their professional career in a more lucrative
economy at the expense of their home country.

There are many ways to own what you want. Some... other
Barter or Money trade? Money
- Convenient, easy to bring outside
- Value - easy to measure. Any product or good is always equal to amount of money. Apple - iP
- Easy to store for a long time without damage

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What are the advantages and

disadvantages of one of the
ways that multinational
companies use to break into
a new market?

Franchising is one of the ways that

Franchising is the method of doing business wherein a franchisor licenses trademarks and
methods of doing business to a franchisee in exchange for a recurring royalty fees
Advantages of Franchising:
- Franchisors can use franchising as a low-cost, low-risk mode of entry into new markets. It
allows them to maintain consistency by replicating the process for standardized products.
- It allows for rapid geographic expansion. Firms often gain a competitive advantage by being
first in seizing a market opportunities.
- Franchisors can profit from the cultural knowledge and know-how of local managers.
Disadvantages of Franchising:
-Franchisors may find it cumbersome to manage a large numbers of franchisees in a variety of
national markets.
-Franchisees can experience a loss of organizational flexibility in franchising agreements.

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What are the advantages and FDI: Establishment of a plant or distribution network abroad. Some people believe foreign
disadvantages of FDI in VN? investment brings huge benefits to Vietnam. Others think it causes serious consequences.
- More capital -> develop economy. Generate a huge number of jobs -> stable incomes -> poor
local people escape poverty. Worker training + Management experiennce + Technology
- Increase competitiveness -> Higher quality at lower price -> Good for consumers
- Challenges to domestic companies -> increase competitiveness -> Host country cannot
improve internal power -> dependent
- Bad impacts on environment: toxic chemicals & emission. Focus on investing and producing
only
What mode of transportation Air transport
do you like to use? Why?
- Time: Fast and modern
- Safe: because include passengers -> high technical standards
Why do businesses prefer
arbitration?

In the past few decades, arbitration has become a mainstay in resolving legal disputes.
However,...
- Faster and more Flexible than Litigation
+ Ex: the average time from filing to decision was about 475 days
in an arbitrated case, while a similar case took from 18 months to three years
to wend its way through the courts.
+ Unlike trials, which must be worked into overcrowded court calendars,
arbitration hearings can usually be scheduled around the needs and
availabilities of those involved, including weekends and evenings.
-> usually cheaper than litigation
- Private: Arbitration proceedings are generally held in private.
+ Some inner information that don't want to public such as a company's client list.
+ Keep reputation for both parties
+ Keep secret of business relationship
Sum up: Speed and Confidentiality

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What are ways of making

money on the foreign
exchange market?

Without foreign exchange trading, international trade itself could not exist.
- Spot transaction: currency bought or sold today with delivery two business days later
- Forward transaction:
to buy or sell a currency in the future, with payment and delivery at the future date.
Ex: VN exporter know they will receive an amount of USD in 6 months -> Sell dollars forward 6
months to bank in VN in return for VND
-> Protect against fluctuating exchange sales
- Hedging: to offset a buy contract with a sell contract and vice versa, matching the amounts
and the time span exactly
- Arbitrage:
the transfer of funds from one currency to another to benefit from currency differentials or
disparities in interest rates. In arbitraging, at least two
markets are entered.
Ex: buy USD at 20 000 VND/1 USD. When the exchange rate in the market increases to 21
000VND/ 1USD,
the investor decides to sell and he can get 1 VND/1USD as his profit.