Chapter 1 Flashcards
1
Q
Discuss the meaning of international business:
A
Business transactions between parties from more than one country.
2
Q
Explain the importance of understanding international business:
A
- It is critical to career success in the twenty-first century.
- Almost any large company is affected by the global economy.
- Keep pace to competitors.
- You might work for a firm owned and headquartered in another country.
3
Q
Identify and describe the basic forms of international business activities
A
- Importing, and Exporting: Selling or buying products made or to sale them in another country. ( Merchandise type and Services type).
- International Investments: Capital supplied by residents in another country.
Foreign direct investment
FDI: It purpose is to control the business located in HOST countries.
Foreign portfolio investment
FPI: Purchase of international assets for other purposes than control (Stocks, bonds, and deposits).
- International licensing, franchising, and management contract:
Patents, trademarks, brands name.
Licensing (Disney allowing a German manufacture to do shirts), Franchising ( Mcdonald).
Management (Marriot hotels sell their “names” to operate under management contract over the world. - Multinational Corporation: Firms that have extensive involvement in international business. Have, create, and sell goods and services in a variety of countries. ( Accounting partnerships Lloyd’s of London).
Wallmart, State Grid, Toyota, and Apple.
4
Q
Globalization
A
The inexorable integration of markets, nation, states, and technologies in a way that is enabling individuals, companies and Nations-states to reach around the world faster, farther, deeper and cheaper than ever before.
