Chapter 3 Flashcards
Which other economies will mature in the next few decades and have benefited from the significant foreign direct investment (FDI) currently underway within these countries, and from the overall development of their monetary banking systems, intermodal transportation facilities, and competitive business models and operating platforms
China India Brazil Romania Vietnam
Why go global? -> attractiveness of global markets (RENCC)
Resource base control Economies of scale New market opportunities Closeness to markets Cost reduction opportunity
What competitive advantage do countries get by producing in countries where labour costs are relatively low and occupational skills are relatively high?
cost reduction opportunity
transferring a component (operations, service, support) of a firm’s business system to another country for the purpose of reducing costs, improving efficiency or effectiveness, or developing a competitive advantage
offshoring
contracting out a portion of, or a component of, a firm’s business system for the purpose of reducing costs, improving efficiency or effectiveness, acquiring expertise, or developing a competitive advantage
outsourcing
The key fundamental in what strategies lies in seeking to control supply sources or influence the use of such sources, as well as being able to generate lower costs or better value by having more control over resource-based factors of production
resource base control
refers to the cash position of a company and its ability to meet its immediate debt and operational obligations, also the ability of a company to convert existing assets to cash in order to meet such obligations
liquidity
refers to the long-term stability of the company and its ability to meet its ongoing debt and operational obligations, and to fund future growth
solvency
fundamental building blocks of global market stability (6) BAROMA
○ Balanced economic development
○ Absence of protectionism
○ Responsible sovereign debt management
○ Ongoing commitment to international trade system
○ Market openness
○ Adherence to fundamentals of fair trade
a general term that describes the variety of loans that could be offered to a business or country
credit facilities
Refers to the need for countries to commit (and adhere) to the trade policies and agreements overseen by the WTO (World Trade Organization)
ongoing commitment to international trade system
Refers for need for developing economies to maintain a focus on the core elements of an open economy (law of supply and demand, encouragement of entrepreneurship and wealth creation, and willingness to encourage and support private ownership)
market openness
Relates directly to the commitment on the part of the governments to support and enforce labour practices, and commit to environmental standards agreed upon by the global marketplace
adherence to fundamentals of fair trade
the illegal market that arises within economies where goods are scarce, taxation on such goods is high, or the prices of legitimate goods are beyond the capacity of significant segments of the population to buy
black markets
The development of internal markets for goods and services result in a stronger economic base and expanded economic activity, which is essential to ensuring that nations create stability and growth in the standard of living for their citizens and residents
balanced economic development
