GM Micro-Challenge: Export Price

The GM Micro-Challenges are intended to help you appreciate the resources available and challenges associated with global marketing to another country.  For these assignments, you will assume the role of an employee at a company providing global marketing assistance.  You will engage in tasks and research related to the specific country and US state which you have been assigned (YOUR COUNTRY/YOUR STATE).  The GM Micro-Challenges will involve your responding to a selection of 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.YOUR COUNTRY/YOUR STATE ( Country Denmark, State Connecticut)Memo FormaUse a standard business memo format for your response.  Your memo should include all the pertinent parts of a business memo.  A sample memo can be found HERE (Links to an external site.).M6 – GM Micro-Challenge: Export PriceYour manager’s next memo to you is below.  In it your manager is giving you tasks to address regarding international trade.  You are not expected to be an expert, just willing and able to use the resources available to develop an accurate response.     Your memo should start with an intro statement that reminds the manager what questions you are responding to.  Next, respond to each question in sequence.  For each response, clearly state the question(s) you understand you are to address.  Then give a written answer to the question that summarizes your understanding of the source info and state what source you used.  Your written answer should then be supported with (1) an image that shows the specific source info you used, and (2) a weblink for that source in case your manager wants to get additional info. To: YouFrom: Your ManagerDate: June 27, 2021Subject: Export PriceNow that shipping details have been considered, clients need some additional information to estimate landed cost for export pricing purposes. They have contacted your company for help.       Consider each subject, examine sources, and provide a brief response. Screen clip and include an image of your source material.  That image should show the name of YOUR COUNTRY/YOUR STATE and the exact information that supports your response.  If you cannot find the exact information, use a port very close by to get a rough idea.         Some potential sources you might find helpful are provided. 1.  Collect the specific information needed to estimate the export price or “landed” cost for their product – roasted, decaffeinated instant coffee (in bulk) – which is to be exported from YOUR STATE in the US to YOUR COUNTRY.  To estimate landed cost for pricing purposes, the company will need the information below.  This video on how to determine total export price HERE (Links to an external site.) will help.A. Determine the US’ 6-Digit HS Code for that product.  (The Schedule B Search Engine is HERE (Links to an external site.).)B. Determine the tariff category used for imports into YOUR COUNTRY from the US (“General Rate,” “Most Favored Nation” (MFN) Rate, OR “United States of America Rate”).  MFN rates apply to WTO members.  A list of WTO members can be found HERE (Links to an external site.).  A list of countries with Free Trade Agreements with the US which would have a special rate is HERE (Links to an external site.). C. The US company will be shipping a 40′ standard Full Load Container (FCL) of the product to YOUR COUNTRY.  Invoice value of the shipment is $20,000.  Insurance is 10% of invoice value.2. Estimate the market rate for ocean freight from YOUR STATE to YOUR COUNTRY in US dollars. A. Using the two relevant maritime ports and the containerized shipping option, get the current market rate estimate in dollars between these two ports.  Use the higher end of the range for your calculations.  (Use the Freight Calculator tool available at World Freight Rates HERE (Links to an external site.))       3.  Calculate CIF.  Show all your calculations. 4.  Determine tariffs and taxes.A. Based on the tariff category, determine the tariff percentage and calculate the duty that would be associated with these imported products.  Access the US Country Commercial Guide for YOUR COUNTRY HERE (Links to an external site.) and look under the “Customs, Regulations & Standards” tab for Import Tariffs.  Use the average tariff rate and calculate it (CIF).   B.  Determine the value-added tax (VAT).  Access the US Country Commercial Guide for YOUR COUNTRY HERE (Links to an external site.) and look under the “Customs, Regulations & Standards” tab for Import Tariffs to get the value-added tax (VAT).  Use the average rate and calculate it (CIF+duty amount).5.  Estimate the landed cost.  Show your calculations. This video on how to determine total export price HERE (Links to an external site.) will help. 6.  What are the import requirements and documentation needed for YOUR COUNTRY?A. Access the US Country Commercial Guide for YOUR COUNTRY HERE and look under the “Customs, Regulations & Standards” tab for Import Requirements and Documentation. 7. Is there a customs broker that has an office in YOUR COUNTRY?A. Visit the website of two customs brokers with offices in YOUR COUNTRY.  Detail the services that each company provides.  Provide contact information for each.   

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