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international business > globalization (final) > Flashcards

globalization (final) Flashcards

1
Q

define globalization

A

refers to the shift towards a more integrated and interdependent world economy OR the interconnectedness between countries

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2
Q

drivers of globalization

A
  1. lowering trade barriers
  2. transportation
  3. production techniques
  4. technological advancements
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3
Q

examples of technological advancements

A
  1. internet
  2. AI
  3. Social media
  4. E-commerce
  5. banking
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4
Q

what did technological advancements help in?

A
  1. communication
  2. payment
  3. education
  4. better production
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5
Q

what moves in/out of borders

A
  1. resources
  2. goods
  3. services
  4. investments
  5. culture
  6. politics
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6
Q

why do countries trade together?

A

to keep peace

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7
Q

what are aspects of globalization?

A
  1. globalization of market
  2. globalization of production
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8
Q

what is globalization of markets?

A

merging distinct and separate national markets into one large global market

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9
Q

what are the drivers of globalization of markets?

A
  1. lower trade barriers
  2. tastes and preferences of consumers are becoming more similar due to international trends
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10
Q

barriers of globalization of market

A
  1. different legal regulations
  2. different taste preferences
  3. different distribution channels
  4. different cultural norms
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11
Q

how do companies adapt to the differences/overcome the barriers of globalization of market

A
  1. marketing strategies
  2. product features
  3. operating practice
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12
Q

real-life examples of globalization of the market

A

Mcdonalds has a set menu for every country based on local taste and preference. ex. Mcfalafel

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13
Q

what do global markets focus on?

A

industrial goods (raw material) rather than consumer goods

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14
Q

why do global markets focus on industrial goods?

A
  1. standardization
  2. more stability and predictability because it’s B2B
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15
Q

what has the internet helped in?

A

helped hospitals outsource some radiology work to India. MRI scans done at night in the US are sent to india to be interpreted while it’s nighttime in USA

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16
Q

how is the lowering of trade barriers a driver of globalization?

A
  1. the reduction of tariffs and quotas make it easier and cheaper to trade between countries
  2. It encourages countries to specialize in what they’re good at, therefore having a competitive advantage
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17
Q

how is transportation a driver of globalization?

A

container shipping and air freight have significantly reduced costs and time to move goods across borders

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18
Q

how are production techniques a driver of globalization?

A

new production techniques like automation and JIT have improved efficiency and reduced costs

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19
Q

how are technological advancements a driver of globalization

A

improvement in technology, especially communication and IT, have changed how a business operates

20
Q

how did technological advancements change how businesses operate?

A
  1. help manage operations globally
  2. reach customers through e-commerce
  3. streamline logistics and supply chain
21
Q

define globalization of production

A

outsourcing goods/services from different countries to take advantage of lower costs and better factors of production

22
Q

advantages of globalization of production

A
  1. lower cost of production
  2. improved quality of functionality
  3. high efficiency
23
Q

real-life example of globalization of production

A

Apple designs phones in the U.S. but makes them in China, where it’s cheaper to build.

24
Q

Institutions that helped globalization

A
  1. UN
  2. GATT
  3. WTO
  4. WB
  5. IMF
25
Q

What is the UN

A

global insitution that helps promote international peace and security

26
Q

how did UN encourage globalization?

A
  1. create a stable environment to conduct international trade and investment
  2. created rules to ensure countries, governments, and people don’t misuse their power and act fairly
  3. provide a forum for exchange of views among member countries to share ideas and agree on actions that need be taken at a national, global, and regional level
27
Q

what is the GATT

A

legel agreement between many countries

28
Q

purpose of GATT

A

promote international trade and lowering of trade barriers

29
Q

features of the GATT

A
  1. helped boost economic recovery after WW2
  2. it’s a legal agreement but functions as an organization
  3. the WTO was created in this
30
Q

what is the WTO?

A
  1. The WTO replaced GATT
  2. it’s an international organization that helps countries trade with each other smoothly, fairly, and freely.
  3. It sets the rules for global trade and ensures everyone follows them.
  4. members need to apply for membership
31
Q

responsibilities of the WTO

A
  1. make sure nations follow rules written in trade agreements signed by members
  2. facilitates multinational agreements between members
32
Q

why was the WB made

A

to promote economic development

33
Q

what did the WB focus on

A

making low-interest loans to governments in poor countries that want to make significant infrastructure investments

34
Q

what is the IMF?

A

it’s referred to as a member of last resort. it provides financial support to nations with an economic crisis or currencies that are losing value against other nations

35
Q

what does IMF require?

A

nations to follow specific economic policies to re-stablize and grow their economy

36
Q

define international trade

A

when a firm exports goods/services to consumers in another country

37
Q

define FDI

A

when a firm invests resources in a business outside it’s home country

38
Q

what are the changing demographics of the global economy?

A
  1. changing world output
  2. change in investment patterns
  3. change in multinational companies
  4. change in new world order
39
Q

explain changing world output

A

increase in the amount of output exported

40
Q

how do emerging countries play a role in changing world output?

A
  1. BRIC countries are growing more rapidly
  2. developing nations may account for 60% of world economic activity by 2025
  3. emerging countries contribute more to world GDP
  4. economies shift towards more high-value/high-tech products
41
Q

explain change in investment patterns

A

Investment is increasing in emerging countries, which is driven by growth and higher returns.

42
Q

why are emerging nations more attractive to FDI?

A

they develop infrastructure and improve business requirements

43
Q

explain the change in multinational companies

A

more multinational companies are emerging from developing countries, bringing competition

44
Q
A
45
Q

explain the change in new world order

A

with emerging economies gaining power and influence in international organizations, there is a geopolitical shift

45
Q

advantages of globalization

A
  1. better and cheaper products
  2. increase in competition
  3. culture exchange
  4. international trade
  5. higher gdp, more economic growth
45
Q

disadvantages of globalization

A
  1. loss of jobs
  2. loss of identity
  3. income inequality
  4. small companies can’t compete with multinationals

international business (9 decks)

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