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Assignment on International Business (Solution)

   

Added on  2020-12-09

11 Pages2700 Words369 Views
INTERNATIONALBUSINESS

Table of ContentsINTRODUCTION ..........................................................................................................................4MAIN BODY...................................................................................................................................4Letter of credit..................................................................................................................................4Current structure- .......................................................................................................................4Example of working of letter of credit in retail industry-...........................................................6Importance of letter of credit in international business- ............................................................6Impact on financial and risk viability of the business- ..............................................................7Dispute Resolution...........................................................................................................................7Current structure of Dispute Resolution in International Business.............................................7Importance of Dispute Resolution for facilitating International Business..................................8Impact on financial and risk viability of Business......................................................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTION International business means performing buying and selling of goods and services, orconducting trading in technology, across the boundaries of a nation. It includes performing thebusiness at global level. International business involves the transaction by the business in morethan two countries. It also involves the transaction of resources such as skills of labour financeetc. with the objective of producing goods and services at international level(Alavi, 2016). TheReport will outline current structure of letter of credit and dispute resolution and importance ofthese in international business. The Report will also describe the choice of letter of credit anddispute resolution on the viability of the business related with retail industry. MAIN BODYLetter of creditLetter of credit is known by various other names such as documentary credit, letter ofundertaking etc. It is a process of making payment for conducting trade with other countries.Letter of credit helps to provide guarantee of payment to the exporter of goods by the bank ofimporter(Alavi, 2017).Current structure- The structure of letter of credit involves various steps that has to be followed by thebusiness for performing trading of goods at an international level. The steps in letter of credit areas follows-Firstly, exporter and importer that are residing in different countries will enter in acontract for performing business. The exporter of goods will require letter of credit fromimporter for securing the payment.Now, importer will apply to the bank of country in which they are residing for obtainingletter of credit in the favour of exporter.Bank of importer will analyse the credit risk of importer then, it will issue letter of creditto the advising bank of exporter.After receiving the letter, advising bank will approve it and then it will credit the amountto exporter(Meyer, 2016). Now, exporter will ship the products and develops the documents that are required byexporter from importer of the goods. The requirement of types of documents to be

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