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Fund To Business > CH7- International Business > Flashcards

CH7- International Business Flashcards

1
Q

Why are businesses global

A

Resources are around the world
Smaller world because of technology
Customers are worldwide

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2
Q

Advantages of international trade

A
  • access to factors of production
  • reduced risk (interdependance=less conflits)
  • inflow of innovation
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3
Q

Disadvantages of international trade

A
  • loss of jobs (go to countries with less paid wages)
  • loss of industries
  • increase in foreign ownership
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4
Q

Free trade (definition)

A

Purchase, sale or exchange of goods and services across national borders

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5
Q

Free trade: what can we say about it

A
  • wasteful
  • increase in standard of living (low cost in products)
  • creates jobs+ opportunities
  • helps economic advancement
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6
Q

What are the types of competitive advantage

A

Absolute advantage and comparative advantage

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7
Q

Absolute advantage

A

Produce a good more efficiently than any other nation

Ex: china> canada

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8
Q

Comparative advantage

A

Produce at a lower opportunity cost than an other country

Ex: Germany in the car industry

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9
Q

What is national competitive advantage

A
  • gouvernment playing a critical role
  • ability of a nation industries to innovate and upgrade
  • four elements forming the basis of national competitveness
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10
Q

Porters diamond is composed of

A
  • company strategy, structure and rivalry
  • related and supporting industries
  • demand conditions
  • factor conditions
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11
Q

PD company strategy structure and rivalry

A

Competition is good

Allows for more strategy and innovation

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12
Q

PD demand conditions

A

Encourage business to make better goods

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13
Q

PD related and supporting industries

A

Good supporting the growth of the primary industries

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14
Q

PD factor conditions

A

Includes factor of production

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15
Q

What are the ways to measure global trade

A

Balance of trade (deficit/surplus)
Balance payement
Exchange rate
Countertrade

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16
Q

Balance of trade

A

Trade deficit: importing more than exporting

Trade surplus: exporting more that importing (makes more money)

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17
Q

Balance payement

A

Flow of money related to the sell of goods and services
Export: + balance
Import: - balance

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18
Q

Exchange rate

A

Cost of a currency in relation with another currency

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19
Q

Countertrade

A

Bantering one product for another (NO currency involved)

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20
Q

different levels of investment

A

FDI (joint venture, partnership, strategy alliance)

Market entry (global sourcing, exporting/importing, franchising, licensing agreement)

21
Q

What is FDi

A

Building or buying part ownership of a business in a foreign country

22
Q

FDI joint venture

A

Two company coming together (local + foreign )

23
Q

Partnership

A

Two people coming together

24
Q

FDI strategic alliance

A

Less formal, businesses never merge, help each other with resources and knowledge (ex : airlines)

25
Q

Market entry

A

Sale of goods or services to foreign markets, but do not require expensive investment

26
Q

ME global sourcing

A

Finding resources for ur product from different country

27
Q

ME export import

A

Buying or selling foreign product

28
Q

ME franchising

A

Franchise in a foreign market , less retail risk

29
Q

ME liscensing agreement

A

Manufacture issue a patent to create a product in a foreign market

30
Q

Ways to promote trade

A

Subsides
Export financing
Foreign trade zones
Special government agencies

31
Q

Subsidies

A

Financial asset to domestic producer for growth (low interest rate/ tax break)

32
Q

Export financing

A

Promoting export of local product to foreign market (financial or resource help)

33
Q

Foreign trade zone

A

Place that is exempted from normal taxes, customs : financial advantages (ex: internet city in Dubai)

34
Q

Special gouvernment agencies

A

Promote business, from partnerships, advertisement

35
Q

Trade restrictions/barriers

A

Sociocultural differences
Economic differences
Political and legal differences

36
Q

Sociocultural differences

A

Often prevents businesses to go into a foreign market (different style of communication, practices)

37
Q

Economic differences

A

State of the economy and how it affects the buying power of goods and services, the cost of going in a market .

They dont have the infrastructure to sells goods and services (telecom: internet/phone line)

38
Q

Political and legal differences

A

Challenging for businesses to go into a market (laws change from a country to another)

International trade restrictions on industries or products to make people not buy products from foreign markets

39
Q

Prevents trades

A 
Tariffs
Quotas
Embargoes
Local content requirements
Administrative delays
Currency control
40
Q

Tariffs

A

Tax on a foreign product
If the price point is higher it encourages local products
GVT makes money from it

41
Q

Quotas

A

Restriction on the amount of a product that can be put in the local market
(No financial benefits for the GVT)

42
Q

Embargoes

A

Ban on trades with a country

43
Q

Local content requirements

A

Tell us that there must be a local product that is included in the final foreign good or service

44
Q

Administrative delays

A

Prevent the product to come in the country (paperwork)

45
Q

Currency control

A

Restrict the ability to purchase a foreign currency (sometimes need foreign currency to buy a foreign product)

46
Q

Types of international organizations

A

GATT
WTO
World bank
International Monetary Fund

47
Q

Common markets

A

Group of countries who have eliminated tariffs and harmonized trading rules
Economy integration (Europe central bank)
Common currency
Flow of resources (4 factors)

48
Q

Trading blocks

A

Increase trade, very basic focus on trade, no common currency

Fund To Business (12 decks)

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