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Essay / Research Paper Abstract
This 7 page paper looks at the implications of countertrade for businesses. The paper briefly outlines what is meant by countertrade, and then looks at why a company may want to participate in countertrade. The implications such as legal and accounting requirements are then considered before the different types of strategy that can be adopted are discussed. Points raised are illustrated with re life examples. The bibliography cites 10 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEcounter.rtf
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Unformatted sample text from the term paper:
trade where there is a reciprocal agreement of others goods or services rather than typical cash or financing deals. There are many types of countertrade, including barter, buyback, offset, tolling
and switching trade. However, whatever form of countertrade is used there are several issues that need consideration before deciding to enter into countertrade, such as whether this is really worth
entering into, the implications as far such as the legal status of these deals and the way that they should be accounted for as well as the types of strategy
that are available. It is assumed the student understands the different types of countertrade. The real level of countertrade is unknown, estimates
indicate that of world trade 10% - 15% may be made up of countertrade (UK Trade and Investment, 2003), other estimates place these as high as 50% in some areas
(Healy, 2001), there is little doubt it is a high level, but the difficulty in estimating it is hindered by the confidential nature if many of the deals (Forker, 1996).
The benefit of countertrade is the way it may be used to create value in a transaction, a well known example of countertrade tool place between
PepsiCo and the Soviet Union, PepsiCo supplied the country with the drink syrup and received Vodka in return. The country did not have the financial reserves to buy the goods
n the traditional way, but had a commodity that was valuable. PepsiCo then sold the Vodka under a new brand name, both parties were happy (Healy, 2001). There are
also other examples that demonstrate the way that these transaction may create value and can be used to demonstrate the differences that may result between this and traditional trade. Media
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