Final: chapter 15, 16 + ADDITIONAL STUFF Flashcards
PROPERTIES OF MARKET ECONOMY?
- all productive activities are privately owned
-supply and demand determines price and production
command economy?
gov controls allocation of resources and prices
WHAT IS:
Deregulation
Privatization
Legal systems
Deregulation:
removing legal restrictions to free up the markets and help with establishing private firms.
Privatization;
Tranfsers of ownerships of state property INTO private hands
Legal systems:
the way we protect property rights be it state or privately owned.
IMFB: What is the “ATTRACTIVENESS” benefits of doing business in a country LONG TERM (3)
-size of the market
- present wealth (ppp) of the consumers in that market
- likely future wealth of the consumers
IMFB: Economic risk vs Political Risk
Ecnomic: likelihood of economic travesty within that business environment of that country
Political: Likelihood that political forces will cause some fuckshit with your business in that country like war or something
IMFB: How do you determine the overall attractiveness of a country as a potential market (what factors?)
balancing: Costs, risks, and benefits associated with doing business with that country
This includes all spheres evaluated like political or economic:
you dont wanna be doing business with chinese sweatshops if your firms policy is sustainability and american patriotism
Name one ethical dilemma in doing international business
Should international firms adhere to the same policies as home country or host country?
certain countries do fucked up shit like slave labour
*WHAT ARE THE 6 DETERMINANTS OF CULTURE (SLEd PEcR)
-social structure
-language
-education
political
economic
religion
*WHAT ARE THE 4 DETERMINANTS OF PORTER’S DIAMOND (COMPETATIVE ADVANTAGE)
porters diamond explains why some countries are better making and selling products than others (competative advantage)
- Factor Endowments
- When a country has a lot of skilled people to make stuff
- Firm Strategy, Structure and rivalry
- when companies have a rivalry, their forced to out innovate each other and create the best products
- Related and Supporting Industries
- strong network of supporting industries = better efficiency
- demand conditions
greater demand conditions= greater incentive for output
*Instruments of Trade Policy (9)
AdVIL TAnS
- AdMINISTRATIVE POLICIES
-VOLUNTARY EXPORT RESTRAINTS
- IMPORT QUOTAS
-LOCAL CONTENT REQUIREMENTS
-TARRIFS
-AnTI DUMPING POLICIES
-SUBSIDIES
what are the effects government intervention in trade?
TRADE BARRIERS AND FIRM STRATEGY;
- raise costs of exporting products to a country
- VERs limit ability to serve countries
- local content requirements suck
- subsidy requirements
POLICY IMPLICATIONS:
- Internations lobby for free trade
- government protection beckfire
-production activties in optimal locations
What are the 5 Determinants of Ethical Behaviour? (DOLUP)
- Decision Making Process
- Organization Culture
- Leadership
-Unrealistic performance Goals
- Personal Ethics
what 5 factors should be evaluated when deciding a market to enter
- International marketing objectives and policies
- goal volume of foreign sales
- how many countries/ markets to enter
-types of countries
evaluate each market
VERTICAL vs HORIZONTAL FDI
VERTICAL: business acquires a complementary business in another country
EX: APPLE; designed in California, manufactured in China, Batteries from Africa
HORIZONTAL:
establishing the same exact type of business and operations in another country:
EXAMPLE: McDonalds
Enterprise Valuation pyramid (top to bottom)
Enterprise Value
- Profitability
►reduce costs
► add value and raise prices
- Profit Growth
►see more in existing markets
►enter new markets
