Ferro Industries — Exporting Challenge in a Small Firm
(10 pages of text)
This case deals with an exporting challenge faced by Ferro Industries, a small enterprise within the steel industry in India. The company’s manufacturing facility was located in the National Capital Region of Delhi. Ferro’s main products were roll-forming machines, cut-to-length lines, and slitting lines; the company was one of only three firms in the Indian sub-continent catering to the market for such products. This case raises two basic questions in relation to Ferro’s role as an exporter. Firstly, at what stage should an importer have to pay an exporter? Secondly, should the exporter release consignment to the importer before receiving payment? The case illustrates the challenges of exporting and international entrepreneurship for a small firm, taking into account payment risk, product pricing, deal-making strategies, promotional strategy, and client-management strategies. It also addresses the complexities involved in the decision-making process while exporting, as well as outlining various conflict-resolution techniques for closing a deal effectively while considering the appropriateness of taking risks.
This case was developed to expose students to the challenges of exporting with reference to payment risk in small and medium enterprises. Accordingly, the case endeavours to educate students about topics relating to six general categories:
- Payment risk in export deals.
- Challenges of exporting by a small firm.
- Deal-making in international entrepreneurship
- International trade negotiation (need for letter of credit or not).
- Role of corporate communication in overseas business.
- Factors affecting corporate decision-making.
India, Saudi Arabia, Small, 2010
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