Chapter 2 Flashcards
Global Warming
A warming of the planet that will have disastrous effects on the planet
World Trade
The flow of goods and services among different countries—the value of all the exports and imports of the world’s nations
Foreign Exchange Rate (Forex Rate)
The price of a nation’s currency in terms of another currency
Protectionism
A policy adopted by a government to give domestic companies an advantage
Import Quotas
Limitations set by a government on the amount of a product allowed to enter a country
Embargo
A quota completely prohibiting specified goods from entering or leaving a country
Tariffs
Taxes on imported goods
Gross Domestic Product (GDP)
The total dollar value of goods and services produced by a nation within its borders in a year
Standard of Living
An indicator of the average quality and quantity of goods and services consumed in a country
Developing Countries
Countries in which the economy is shifting its emphasis from agriculture to industry
Developed Countries
A country that boasts sophisticated marketing systems, strong private enterprise, and bountiful market potential for many goods and services
Group of 7
An informal forum of the seven most economically developed countries that meets annually to discuss major economic and political issues facing the international community. Formerly the G8, Russia was excluded from the group as a result of its invasion of Crimea in 2014
Monopoly
A market situation in which one firm, the only supplier of a particular product, is able to control the price, quality, and supply of that product
Oligopoly
A market structure in which a relatively small number of sellers, each holding a substantial share of the market, compete in a market with many buyers
Monopolistic Competition
A market structure in which many firms, each having slightly different products, offer unique consumer benefits
Perfect Competition
A market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price, or supply of a product
Nationalization
When a domestic government reimburses a foreign company (often not for the full value) for its assets after taking it over
Expropriation
When a domestic government seizes a foreign company’s assets without any reimbursement
Local Context Rules
A form of protectionism stipulating that a certain proportion of a product must consist of components supplied by industries in the host country or economic community
Consumer Ethnocentrism
Consumers’ feeling that products from their own country are superior or that it is wrong to buy products produced in another country.
Export Merchants
Intermediaries a firm uses to represent it in other countries
Licensing Agreement
An agreement in which one firm gives another firm the right to produce and market its product in a specific country or region in return for royalties
Franchising
A form of licensing involving the right to adapt an entire system of doing business
Strategic Alliance
Relationship developed between a firm seeking a deeper commitment to a foreign market and a domestic firm in the target country
Joint Venture
A strategic alliance in which a new entity owned by two or more firms allows the partners to pool their resources for common goals
Straight Extension Strategy
Product strategy in which a firm offers the same product in both domestic and foreign markets
Product Adaption Strategy
Product strategy in which a firm offers a similar but modified product in foreign markets
Product Invention Strategy
Product strategy in which a firm develops a new product for foreign markets
Dumping
A company tries to get a toehold in a foreign market by pricing its products lower than it offers them at home
Ethical Relativism
Suggests that what is ethical in one culture is not necessarily the same as in another culture
Business Ethics
Basic values that guide a firm’s behavior
Code of Ethics
Written standards of behavior to which everyone in the organization must subscribe
Bribery
When someone voluntarily offers payment to get an illegal advantage
Extortion
When someone in authority extracts payment under duress
Green Customers
Those consumers who are most likely to actively look for and buy products that are eco-friendly
Fair Trade Suppliers
Companies that pledge to pay a fair price to producers in developing countries, to ensure that the workers who produce the goods receive a fair wage, and to ensure that these manufacturers rely where possible on environmentally sustainable production practices
Locavorism
The trend for shoppers to actively look for products that come from farms within 50 to 100 miles of where they live
Sustainability Metrics
Tools that measure the benefits an organization achieves through the implementation of sustainability
