chapter 8

Question 1

What is globalization?

Answer 1

processes by which goods, services, capital, people, information, and ideas flow across national borders.

Question 2

Who are the BRIC countries?

Answer 2

• Brazil
• Russia
• India
• China

Question 3

What is the difference between trade surplus and trade deficit?

Answer 3

Trade surplus - country imports less goods than it exports

Trade deficit - country imports more goods than it exports

Question 4

What are the global entry strategies and how would you define them?

Answer 4

Export - Producing goods in one country and selling them in another

Franchising - A contractual agreement between a firm

Strategic alliance - A collaborative agreement between independent firms

Joint ventures - Formed when a firm entering a market pools its resources with those of a local firm

Direct Investment - Requires a firm to maintain 100% ownership of its products and facilities

Question 5

What is GDP, GNI, PPP, and tariffs?

Answer 5

GDP - market value of the goods and services
produced by a country in a year; most widely used metric

GNI - GDP plus net income earned from investments abroad

PPP - theory states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other if expressed in the same currency

Question 6

What is the focus of Hofstede’s cultural dimensions and what are the dimensions?

Answer 6

Hofstede’s cultural dimensions can be used to help explain why certain behaviors are more or less common in different cultures.

Demensions:
- Power Distance
- Uncertainty avoidance
- Individualism vs. Collectivism
- Masculinity vs. Femininity
- Time orientation
- Indulgence vs. Restraint

Question 7

What are the global product strategies discussed in the chapter? Hint: There are 3
strategies.

Answer 7

• Same product or service in both the home country market and host country
• Similar product or service with minor adaptations
• totally new product or service