Countertrade is the exchange of goods in barters and services in other ways in the place of money. Many countries are involved in countertrading because they cannot obtain the trade credit or financial assistance to pay for desired imports. But, countertrade can be an affective gain to enter into new markets. The country receiving the goods or services has the opportunity to become a new distributor, open up international market channels, and expand that market. To execute these opportunities, companies need strategies.

There are four types of countertrade strategies. First off are the defensive strategies, where companies do not countertrade at all. These companies will make countertrade-type arrangements with buyer countries, but these companies will avoid any contract countertrade obligation. These companies will make it clear to the country that they will reciprocate in some way for the sale, and will sell their product at a low price to help the countries with export development. The second strategy is passive countertrade strategies. This is where companies participate in countertrade at minimal level. Companies use this strategy because they have product leverage, where they little or no competition within the market. The third strategy is reactive, where companies will cooperate with the buyer country in countertrade requirements. These companies use this strategy as a competitive tool, in a sense they cannot make the sale unless they agree to countertrade. The fourth strategy is proactive, where companies have made a commitment to countertrade. These companies use countertrade aggressively as a marketing tool. These companies are interested in making trading an active and profitable part of their business. They use countertrade as an opportunity to make money through trading, rather than as an inconvenience.

In conclusion, a company’s strategy should come from the policy the company has developed when it plot out the goals. Sometimes the guidelines from company policy are not always specific. As a result, these companies will have multiple conflicting strategies within the company. Secondly, when a company has an unclear countertrade policy, the company will be left to interpret the policy as they see fit. The company will develop the strategies on a trial and error basis.

Sources:

Bowers, Barbara, and C.G. Alex. "The American Way To Countertrade." Barternews.com. Bizxchange,
1988. Web. 03 Dec. 2009. http://www.barternews.com/american_way.htm