Hnd采购outcome2.docx

Hnd采购outcome2.docx

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Hnd采购outcome2

Content

1.0Introduction

Thisreportisrequestedbyinternationalpurchasingandsupply.Itwillevaluatethekeychallengesinoverseassourcing.

Thereportwillassesstheculture,languageandcommunicationofoverseasprocurement.Atthesametime,itanalyzesthefactorsthataffectexchangerate.Inadditiontothis,inpdcurrencyfinancialriskwillalsobementioned.Ofcourse,thereportwilldiscusstradeandneedofIPD,inordertoachievethecontinuityofsupplyrequirementsandsafety.

2.0TheEffectsofCulture,LanguageandCommunication

Becauseofdifferencesinlanguageandculturalexchangeswith,leadingtodifferentbodylanguageandidiomofnegotiationsthetwosidestouse,itmakesthenegotiationsmoredifficult.SofortheIPDforenteringthemarketmustfirstinvestigatethedifferencesofcultureandlanguage,andtoovercometheimpactofdifferencesinlanguageandculturalcontextbrings.

Toavoidproblemscausedbythesedifferences,wecanuseHofstede'sfiveculturaldimensions（Hofstede,Geert,1984）tomeasurethedifferentcountriesandculturaldifferences.Thisfiveculturaldimensionsincludingpowerdistance,Individualism（IDV）vs.Collectivism,Uncertaintyavoidanceindex,Masculinity（MAS）,vs.Femininity,Long-termorientation（LTO）,vs.shorttermorientationandIndulgenceversusrestraint（IVR）.

Forexample,tounderstandacountry'smanagementculture,younotonlyhaveknowledgeofthiscountry,butalsoitsculturehaveacompleteconcept,cantakethehint.BMmakeChina'sprocurementandEuropearedifferent.InChina,thelong-termdirectionishigher,sowhenIBMmadethesigningofcontractswithChinesesuppliers,theyhavetomakealong-termcontract,becausetheChinesesuppliersconcernedaboutthefuture,butitisanothercaseinEurope.Inadditiontothis,differentcountrieshavedifferentlanguagesandcommunicationmode,itcancausesomeproblems.Forexample,IBMandChinesesupplierstocommunicateinEnglish,butbecauseofthelanguagedifference,suppliersneedtohireatranslator,itmayleadtomisunderstandings.CommunicationbetweenChinaandtheUnitedStatesintheUnitedStatesmaywishtoreachanagreementandsignedacontract,whileChinamaytakemoretimefornon-commercialactivities,intheformofminilecturesandhospitablepreferenceagreementtoestablisharelationshipfirst.Therefore,thesewillaffecttheoverseasprocurement.

3.0TheFactorsAffectingForeignExchangeRates

Therearemanyfactorsthatcanaffecttheexchangerate,asinflation,interestrates,thecurrentaccountdeficit,publicdebt,tradeandpoliticalstabilityandeconomicperformance.Thesefactorswillaffecttheexchangerateindifferentways.

Inflation（Ottawa:

JamesonBooks,1990）impliesariseinthedomesticpricelevel,whenamajorityoftheeconomyandlaborcommoditypricesgenerallyrosecontinuouslyoveraperiodoftime,itsaidthattheeconomyhasexperiencedsignificantinflation.Becausethepriceisthevalueofacountry'scommoditycurrencies,inflationmeansthatrepresentativesofthecountry'scurrencyValuedecrease.Inthecaseofdomesticandinternationalcommoditymarketsarecloselylinked,ingeneral,inflationanddomesticpriceswouldresultinadecreaseandincreaseexportsofimportedgoods,thusanimpactonsupplyanddemandontheforeignexchangemarket,resultinginthecountry'sexchangeratefluctuations.Atthesametime,adeclineinthevalueofdomesticcurrencywillcertainlyaffectitsexternalvalue,weakeningthecountry'screditstandingintheinternationalcurrencymarket,peoplewillexpecttheexchangerateduetoinflationandthecountry'sweakcurrencywilltendtoholdthehandsofthenationalcurrencyconvertedintoothercurrencies,causingthedollartofall.Inaccordancewiththelawofonepriceandpurchasingpowerparitytheory,whenthevalueofacountry'sinflationrateinflationrateinanothercountry,thatcountry'scurrencyrelativetoanotherrepresentativeoftheactualcurrencyinreducingthecountry'scurrencywilldecline.Onthecontrary,itwillrise.

Forexample,beforethe1990s,theJapaneseyenandthedeutschemarkexchangerateisverystrongoriginaloneimportantreasonisthattheinflationratehasbeenverylowinbothcountries.BritainandItaly'sinflationrateisoftenhigherthantheaverageofotherWesterncountries,sothatthetwocurrenciesattheexchangerateonadowntrend.

4.0EvaluatetheFinancialRiskonExchangeRateofIPD

4.1TheInfluenceoftheFluctuationonExchangeRatetoPayment

Toexchangeratefluctuationscouldaffectmanyaspects,suchasprocurementandcostcontrolofthecompany.Iftheexchangeratefluctuations,buyerscanpaymoremoneytobuythesameproduct,itwillincreasethepurchasecost,isnotconducivetocostcontrol.Therefore,intheexchangeratevolatilitywillaffectpayandleadtofinancialrisk.

Forexample,IBMhopestopurchasesomeelectroniccomponentsfromChina,however,iftheexchangerateisdown,thismeansthattheappreciationoftherenminbiis,sothecompanyneedtopaymoremoneytobuymaterial,thecostwillincrease.Therefore,exchangeratefluctuationswillinfluencethecostcontrol,eventuallyleadtofinancialrisks.Ofcourse,thereareseveralwaystoreducefinancialrisk.IBMcanuseofhedgingthefuturesmarketandthelimitationoftheset,itcanbeusedinthecurrentcurrencypaymenttransactions,thiswillreducethefinancialrisksofcurrencyfluctuations.

4.2TheBenefitofForwardBuyingtoanImporter

HedgemeansfortheinternationalsaleofgoodsinMatheson,importandexporttraders,aswellasthoseengagedininternationalinvestment,iftheexpectedfuturepaymentofacertainamountofforeignexchange,inordertoavoidlossesduetochangesproducedcanbeusedlong-terminordertoavoidtheriskofforeignexchangetransactions,suchhedgingoperation,knownaslong-termhedgingorforwardhedging.Itisastillprofitableatthesametimetoreducethebusinessriskintheinvestmentpractices.

Ifthecompanythinktheexchangeratewilldecline,andthecompanyhavethecontract.Inordertoavoidexchangeraterisk,thecompanycantakeadvantageofthelong-termpurchasetoreducerisk.Thereareseveralwaystoavoidfinancialrisk.Suchasmoneymarkethedge,theoptionsmarkethedge,theforwardmarkethedge,hedgeexposure,hedgerepeatedexposure,swaps,etc.ThroughtheInvoicecurrency,hedgingvialeadandlag,exposurenettingandcross-hedgingminorcurrencyexposure.

Forexample,in1997,Soros'sQuantumFundsoldalotofbahttobuyothercurrencies,theThaistockmarketfell,theThaigovernmentcannolongermaintainthepeg,theeconomiclosses.Andthefundisgreatlyprofit.InadditiontoThailand,HongKong,inordertomaintainthecurrencypegpricesaresubjecttonationalandregionalchallengesofhedgefunds.Governmenttoraiseinterestratessharply,up300percentovernightinterestrate,foreignexchangereservesofHK$120billionmoretospendlargequantitiesofHongKongstocks.Finallyrepelspeculators.

5.0TheEffectofCounter-TradeonOverseasTrading

Countertrade（Verzariu,P.,1992）isalooseconcept,thereisnotastandarddefinitionanddeterminationoftheboundaries,itisoutofthecombination,includingexportandimporttradereciprocalconditionsforavarietyofcommoncharacteristicsofcollectively.

 Counter-tradeismeansthatexchanginggoodsorserviceswhicharepaidfor,inwholeorpart,withothergoodsorservices,ratherthanwithmoney.Ithastochoosethetradeinsomesituation.Forexample,countertradealsooccurswhencountrieslacksufficienthardcurrency,orwhenothertypesofmarkettradeareimpossible.thisisbecausesuchtransactionsdonotneedmoney,itcansolvethisproblem.Insomecountries,othertypesofmarkettradeisimpossible,suchasNorthKorea,asthecountrysufferedablock,itcannotuseothertransactions.Meanwhile,insomecountries,verystrictexchangecontrols,thebuyercanusethistransactiontobuysomeproducts.Finally,insomedevelopingcountries,theyusetocontrolthetradeandcommerceasthedevelopmentoftechnology.

Wecansaythatthecancellationoftradegenerallyoccurredintradebetweenthematuremarketeconomiesandlessdevelopedmarketsystem.Inthiscase,thecancellationoftradeisgenerallybelievedthereareseveraladvantages:

⑴conductcountertradehelpsusdealwithanationalshortageofforeignexchange.⑵countertradecanpromoteexports.Tradeprotectionismisrampantincontemporary,throughcountertrade,helpbreakthebarrierstotradeinWesterncountriesfortheirproducts,especiallymanufacturedgoodsfromdevelopingcountriestoopenmarkets.⑶countertradecanbeusedtoreducetheuncertaintyofexportrevenue.⑷canavoidtheuseofcounter-tradeagreementsininternationalprices,suchastheOrganizationofPetroleumExportingCountries（OPEC）priceagreement.⑸countertradecanhelpheavilyindebtedcountriescontinuetoimportgoodsandexportrevenuesactuallyconcealfragrantcreditors.Tradeprotectionism,however,countertradecouldbeverydangerousbusiness.Duetoconcealtherealtransactionpricesandcosts,onthesaleandpromotionoftradecancoveracountrywithlowlong-termbenefitsinthemarket.Companiesbecausetheycannotgetridoflow-qualityproductswillsuffer.Finally,thecancellationoftrademightbeconsideredaformoftradeprotectionism.Extremelyunfavorablefactorsare:

（1）onthesalewithastrongbilateraltradeandclosed,whichisactuallybasedonrestrictivemeasuresagainstprotectionism,andtheresultsactuallyincreasedtradeprotectionismatmosphere.

（2）Intheabov