Functions Foreign Trade
At its core trade is a certain kind of activity, whose task is the exchange of goods according to certain laws.There are two options exchange of goods - straight, otherwise it is called barter, and thus indirectly - with the use of money as a medium of exchange.Foreign trade (export) implies a kind of trade relations with other countries.No doubt, export plays a crucial role in the economic life of any country, as it provides three key features of his.First of all, effective and competent management of foreign trade enables the state as a business entity, to encourage economical use of national resources, including natural that lately is of great importance.Second, the positive dynamics of foreign trade, of course, provides the opening of new production facilities, which in turn increases the number of jobs in the state, thereby reducing a social indicator of unemployment.Third, the high efficiency of foreign trade allows a country to earn sufficient foreign exchange inflows, which in turn contributes to the development of industries, including import substitution, re-equipment of enterprises, purchase of new technologies, an increase in gold and currency reserves, finally, as a consequence, the creation offavorable conditions for the inflow of those or other investments.Thus, high-quality and responsible management of foreign trade is a top priority of any state in the face of his government, is not the exception, and Russia.
Factors successful foreign trade
Effective management of foreign trade implies an analysis and consideration of a certain set of factors that can dramatically influence the results obtained.The most common factor that affects the dynamics of foreign trade, is a different kind of risk.As is known, the risks appear already at the manufacturing stage of a product, more precisely even in the step of preliminary studies segment.As you know, there are cases of negative results of the research that is already providing non-payment of money invested in research.Worse may be a situation where the data are preliminary studies for one reason or another are wrong.Based on the above, the management of foreign trade should be oriented in such a way as to preclude such risks, or at least to compensate for them by others, mostly successful projects.You should not rule out the risk of so-called financial nature.We are talking about a possible non-return of investments related to the various types of force majeure, such as hurricanes, tsunamis, earthquakes, etc., changes in the political system in another country.
profit as a measure of quality
course, the effectiveness of foreign trade is determined by the amount of profit, however, as in all kinds of trade.As is known.Exaggerate saying Profit is the difference between the amount received from the sale and investment.At equal and stable prices in the international market can increase profits by cutting costs and expenses.But in this situation it is necessary to understand that the costs and expenses incurred in the implementation of the domestic market is less than for export options, as a result, profits will decline, reducing thus the profitability of production.By managing foreign trade, this aspect no doubt be taken into account.
