Chapter 5- Business Markets and Globalization Flashcards
Define a market
a place where people go to buy and sell goods and services
Define a free market
a market that has limited government involvement.
What are the general market types?
- perfectly competitive market
- monopoly
- monopolistic competition
- oligopoly
Define a perfectly competitive market.
one where there are a large number of small firms selling identical products. everyone has perfect information and it’s easy for businesses to enter and leave the market.
Define a monopoly.
when one seller controls the quantity of the goods and service supplied. Prices for goods and services in a monopoly can be set as high as buyers are willing to pay since there’s no competition.
Define monopolistic competition
the type of market you find in the United States. There are a large number of businesses selling similar products. Businesses compete on price and different characteristic of their products and services.
Define an oligopoly.
when there is a small number of large businesses that produce the same or similar goods or services, such as a car.
What is power distance?
how the power is distributed in a culture and the view that this distribution is unequal
what is individualism?
the cultural desire to work alone.
what is collectivism?
the cultural willingness to work in teams.
What is meant by masculinity?
refers to a culture’s vies of material achievement.
what is meant by femininity?
refers to the cooperation and quality of life.
What is uncertainty avoidance?
some cultures are not good with uncertainty or ambiguity. this dimension relates to how a culture views uncertainty.
what is Long-Term Orientation?
when a culture looks for long-term solutions.
Define international business
conducted when either importing products and services or exporting products and services
Define licensing
a company giving another company the right to make their product.
Define Joint Venture
two companies come together to work as one to produce a product or service.
Define a wholly owned subsidiary
when a company owns a foreign company so that they can make sure quality is present.
What is strategic alliance?
A short-term venture where neither company invests any money to form a third company.
Define globalization
the process of moving to a global market.
what is the global market?
a market that spans the entire world where goods, services, capital and labor are freely traded.
Define absolute advantage
the production of goods or services for which the country has the best resources and specialized skills
define comparative advantage
the production of goods or services at a lower opportunity costs than other goods and services
Define Emerging markets
markets that provide new sources of customers and cheap labor for global companies.
