International Commerce

This article discusses the DAFO analysis for exporting fashion wears from Spain to Deutschland, Poland and U.S. It covers logistics, supply chain strategy, financing, economic targets and turnover. The article also talks about taxes, barriers, and pros and cons per country. The personalized advantage to the proposed model is also discussed.

Running head: FINANCE/ INTERNATIONAL COMMERCE
International Commerce
Name of the Student
Name of the University
Author’s Note

1INTERNATIONAL COMMERCE
Table of Contents
Introduction..........................................................................................................................2
Global Sales strategy from Fashion from Spain..................................................................2
Taxes, barriers, to export, pros and cons per country......................................................2
Logistics and Supply Chain Strategy...............................................................................3
Guarantee service and payments.....................................................................................3
Supply Strategy of the company..........................................................................................3
Financing.............................................................................................................................3
Economic Targets and Turnover.........................................................................................3
Personalized advantage to the proposed model...................................................................4
Conclusion...........................................................................................................................4
References............................................................................................................................5
List of Appendix..................................................................................................................7

2INTERNATIONAL COMMERCE
Introduction
Fashion from Spain will export fashion wears from Spain to Deutschland and Poland in
Europe. The non-European nation selected for the study is U.S. The overall discussions of the
study will be based on developing a DAFO analysis. This analysis will compose of depicting the
strength, weakness, opportunities and threats of the selected countries.
Global Sales strategy from Fashion from Spain
Taxes, barriers, to export, pros and cons per country
The tax barriers in Germany is identified with few restrictions however the business is
well regulated by adherence to the legal requirement. In terms of taxes the country has a complex
tax laws for avoiding the critical errors. However, this business is seen with considering the
possible deductions and write-offs during the export. The main barriers need to be considered
with challenge relating to the tax and legal structures (World Business Culture 2018).
Poland on the other hand is depicted with dramatic transformation which are related to
the FDI and rapid globalization across the central European states. Between the period of 2004-
2013, the FDI in Poland was seen to be higher than three times in compare to 1989 to 2003. The
application of the tax barriers in the country is further depicted to be evident with retroactive
bank tax and a range of other levies.
The trade barriers in the U.S. are evident with the increase in the price and reduction in
the available quantities of the services and goods. Despite of this, the increasing measures of the
trade flows are the indicators of the positive economic health. In addition to this, production and
exchange with the country will be able to generate increased revenues. Moreover, the highest

3INTERNATIONAL COMMERCE
tariff in the country are evident with the products such as agriculture, textiles, and footwear.
Hence, in terms of the fashion wear the company has increased scope of operations.
Logistics and Supply Chain Strategy
The logistics requirement in Deutschland and Poland can be accommodated with Rail,
Road and Air transportation. However, the in the Non-European country the most suitable mode
of transportation is shipping. The available shipping options needs to be considered with the
United Parcel Service of America Inc., FedEx Corporation, Hapag-Lloyd., COSCO, Hanjin.,
NYK Line and CMA CGM (Austrade.gov.au 2018).
Guarantee service and payments
The guarantees pertaining to the EU rules needs to be identified with good or a service
online provided can be cancelled and returned within 14 days (Your Europe – Citizens 2018). On
the contrary, the guarantee for the service payment are more flexible in U.S., which may go up to
3 months in case payment is postponed (Tax Foundation 2018).
Supply Strategy of the company
The Lead time and possible cost for the individual countries are stated as follows:
 Deutschland- 30 Days, $ 190,000
 Poland-30 Days, $ 228,000
 U.S.- 45 Days, $ 120,000
Financing
Refer to appendix

4INTERNATIONAL COMMERCE
Economic Targets and Turnover
The economic targets for the for the increase in the performance is identified with 20%.
The overall turnover of the countries is presented as
Country Sales
Profit Before
tax
Pretax Net
Margin
Deutschland 950,000 21,800 2%
Poland 1,140,000 59,773 5%
U.S. 1,368,000 425,772 31%
Pretax Net Margin
0%
5%
10%
15%
20%
25%
30%
35%
2%
5%
31%
Pretax Net Margin
Deutschland Poland U.S.
Personalized advantage to the proposed model
The strategy by the company needs to be followed by expansion of business outside
Europe. Therefore, the business should proceed with buying and selling activities in the United
States.
Conclusion
It can be concluded that the trade barriers in the U.S. are evident with the increase in the
price and reduction in the available quantities of the services and goods. Despite of this, the

5INTERNATIONAL COMMERCE
increasing measures of the trade flows are the indicators of the positive economic health. In
addition to this, the expansion of the business in the U.S. will to higher customer and revenue.
The buying and selling of the fashion wears should be proceeded in the U.S.
References
Austrade.gov.au. (2018). Doing business - Tariffs and regulations – United States of America –
For Australian exporters - Austrade . [online] Available at:
https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/United-States-of-
America/Doing-business/Tariffs-and-regulations [Accessed 23 Nov. 2018].
Tax Foundation. (2018). The Impact of Trade and Tariffs on the United States | Tax Foundation.
[online] Available at: https://taxfoundation.org/impact-trade-tariffs-united-states/ [Accessed 23
Nov. 2018].
World Business Culture. 2018. Barriers to Entry in Germany | World Business Culture. [online]
Available at: https://www.worldbusinessculture.com/country-profiles/germany/market-entry/
barriers-to-entry/ [Accessed 23 Nov. 2018].
Your Europe - Citizens. 2018. Guarantees: repairs, replacements, refunds. [online] Available at:
https://europa.eu/youreurope/citizens/consumers/shopping/guarantees-returns/index_en.htm
[Accessed 23 Nov. 2018].

6INTERNATIONAL COMMERCE

7INTERNATIONAL COMMERCE
List of Appendix
(1) SALES FORECAST
Country 0 DeutschlandPoland U.S.
Projected Sales 950,000 1,140,000 1,368,000
(b) Cost of goods 190,000 228,000 120,000
(2) CASHFLOW FORECAST
Preop
Year 0 1 2 3
CASH INFLOWS
Cash from Sales 950,000 1,140,000 1,368,000
Directors loans 0 120,000 120,000 120,000
Capital Employed 0 500,000 500,000 500,000
Other cash inflows
TOTAL CASH INFLOW 0 1,570,000 1,760,000 1,988,000
CASH OUTFLOWS
Payments for materials 190,000 228,000 120,000
operating expenses ( ) 0
Premises (rent, rates) 0 125,000 150,000 180,000
Salaries 0 145,000 174,000 208,800
175,000 185,500 23,500
Interest and bank charges payable 0 12,000 12,000 12,000
Lease payments 0 6,500 6,500 6,500
Corporation Tax 6,540 17,932 127,732
Market survey costs 0 4,000 4,800 5,760
Other preliminary expenses 0 7,500 7,688 7,880
capital expenditure
financing repayments
Loan repayments 0 0
TOTAL CASH OUTFLOWS 0 671,540 786,419 692,171
Cash flow summary
NET CASHFLOW FOR PERIOD 0 898,460 973,581 1,295,829
OPENING CASH BALANCE 0 0 898,460 1,872,041
CLOSING CASH BALANCE 0 898,460 1,872,041 3,167,869
(3) DEPRECIATION SCHEDULE
Year 0 1 2 3
Fixed Assets
Plant&Machinery 250000 225,000 200,000 175,000
Total book values (i.e. net fixed assets) 0 225,000 200,000 175,000
Annual Depreciation
Land & Buildings-10% straight line 25,000 25,000 25,000
total annual depreciation 25,000 25,000 25,000
(4) PROFIT AND LOSS FORECAST
Preop
Year 0 1 2 3
Revenue 0 950,000 1,140,000 1,368,000
Cost of sales 0 190,000 228,000 120,000
Gross profit 0 760,000 912,000 1,248,000
Gross Margin 934,740 1,098,159 1,069,959
Expenses/overheads
Premises (RENT & RATES) 125,000 150,000 180,000
Salaries of Staff 145,000 174,000 208,800
General expenses 175,000 185,500 23,500
Accountant Fees 41,000 49,200 59,040
Register for Tax 2,200 2,640 3,168
Permits and Licenses 23,000 27,600 33,120
Site Survey 16,000 19,200 23,040
Sewing Machine 110,000 132,000 158,400
87,000 104,400 125,280
Preliminary expenses 7,500 7,688 7,880
Lease Payments 6,500 6,500 6,500
Total expenses/overheads 738,200 852,228 822,228
Profit before tax 21,800 59,773 425,772
Tax @ 30% 6,540 17,932 127,732
Before tax net margin 2% 5% 31%
Profit after tax 15,260 41,841 298,041
Transfer to reserves 21,800 59,773 425,772
Website
Knitting
Financial Plan for Fashion From Spain

8INTERNATIONAL COMMERCE
Assets Deutschland Poland U.S.
Current Assets
Cash $2,346,805 $2,640,815 $2,564,543
Accounts receivable $950,000 $1,140,000 $1,368,000
Total current assets $3,296,805 $3,780,815 $3,932,543
Fixed (Long-Term) Assets
Plant&Machinery $250,000 $262,500 $275,625
(Less accumulated depreciation) $25,000 $25,000 $25,000
Total fixed assets $225,000 $237,500 $250,625
Total Assets $3,521,805 $4,018,315 $4,183,168
Liabilities and Owner's Equity
Current Liabilities
Accounts payable $35,000 $25,000 $25,001
Accrued Rent $125,000 $150,000 $180,000
Bank Charges Payable $3,000 $3,000 $3,000
Short-term loans $10,000 $10,000 $10,000
Income taxes payable $6,540 $17,932 $127,732
Deferred income Tax $2,965,765 $3,401,383 $3,553,635
Accrued salaries and wages $145,000 $174,000 $208,800
Website Expenses $175,000 $185,500 $23,500
Lease Payment $6,500 $6,500 $6,500
Current portion of long-term debt $50,000 $45,000 $45,001
Total current liabilities $3,521,805 $4,018,315 $4,183,168
Long-Term Liabilities
Long-term debt $200,000 $200,000 $200,000
Less: Loan Repayment $0 $0
Total long-term liabilities $200,000 $200,000 $200,000
Total Liabilities $3,721,805 $4,218,315 $4,383,168
Owner's Equity
Owner's investment $500,000 $500,000 $500,000
Net Profits $15,260 $41,841 $298,041
Reserve and Surplus $21,800 $59,773 $425,772
Total owner's equity $537,060 $601,613 $1,223,813
Total Liabilities and Owner's Equity $4,258,865 $4,819,928 $5,606,981
Balance Sheet
Financial Plan for Fashion From Spain