International Business and Trade

Question 1

a business that is
carried out across national borders.

Answer 1

INTERNATIONAL BUSINESS

Question 2

the operations of a
company outside its home or domestic market.

Answer 2

FOREIGN BUSINESS

Question 3

a company with
operations in multiple nations.

Answer 3

INTERNATIONAL COMPANY

Question 4

Differentiate International Business and International Companies

Answer 4

International companies have multiple operations in multiple nations while an international business only refers to a business that operates on a foreign environment.

Question 5

External Forces in environment of international business

Answer 5

1. Competitive
2. Distributive
3. Economic
4. Socioeconomic
5. Financial
6. Legal
7. Physical
8. Political
9. SOciocultural
10. Labor
11. Technology

Question 6

Internal Forces in environment of international business

Answer 6

1. Factors of Production (Land, labor, capital)
2. Activities of Orgs

Question 7

-is all the uncontrollable forces
originating in the home country that
surround and influence the life and
development of the firm.

Answer 7

THE DOMESTIC ENVIRONMENT

Question 8

-refers to all the uncontrollable forces
originating outside the home country
that surround and influence the firm.

Answer 8

THE FOREIGN ENVIRONMENT

Question 9

FORCES IN THE FOREIGN ENVIRONMENT:

Answer 9

1. Forces have different values
2. Forces can be difficult to assess
3. The forces are interrelated

Question 10

-interaction between domestic and foreign environmental forces, as well as interactions between the foreign environmental forces of two countries.

Answer 10

THE INTERNATIONAL ENVIRONMENT

Question 11

FORCES IN THE INTERNATIONAL ENVIRONMENT:

Answer 11

1. Decision making is more complex
2. Self- reference criterion

Question 12

IS INTERNATIONALIZATION OF
BUSINESS A NEW TREND, AND WILL IT CONTINUE?

Answer 12

Secret

Question 13

an enterprise made
up of entities in more than one nation, operating under a
decision- making system that allows a common strategy
and coherent policies.

Answer 13

TRANSNATIONAL CORPORATION

Question 14

direct investments in
equipment, structures, and organizations in a foreign country at a
level sufficient to obtain significant management control; does not
include mere foreign investment markets.

Answer 14

FOREIGN DIRECT INVESTMENT (FDI)

Question 15

the transportation of any domestic good or service
to a destination outside a country or region.

Answer 15

EXPORTING

Question 16

the transportation of any good or service into a
country or region, from a foreign origination point.

Answer 16

IMPORTING

Question 17

WHAT IS DRIVING THE
INTERNATIONALIZATION OF BUSINESS?

Answer 17

1. Political Drivers
2. Technological Drivers
3. Market Drivers
4. Cost Drivers
5. Competitive Drivers

Question 18

Selling product worldwide

Answer 18

Globalization

Question 19

Application of innovation available worldwide to local products

Answer 19

Internationalization

Question 20

MAJOR TRADING PARTNERS: THEIR RELEVANCE FOR MANAGERS

Answer 20

1. Favorable business climate
2. Surmountable regulations
3. No cultural objections
4. Satisfactory Transport Facilities
5. Experience import channel members
6. Good currency
7. Good government (Sa trading partner)

Question 21

the amount by which the
value of imports into a nation exceeds the
value of its exports.

Answer 21

Trade Deficit-

Question 22

the amount by which the
value of a nation’s exports exceeds the
value of its imports.

Answer 22

Trade Surplus-

Question 23

A nation’s wealth depends on accumulated
treasure, usually precious metals such as gold and
silver; and

Answer 23

MERCANTILISM

Question 24

How to increase wealth according to mercantilism?

Answer 24

• increase export and decrease imports

Question 25

A nation’s ability to produce more of a good or service than another country for the same or lower cost of inputs.

Answer 25

THEORY OF ABSOLUTE ADVANTAGE

Question 26

When one nation is less efficient than another nation in the production of each of two goods, the less efficient nation has a comparative advantage in the production of that good for which its absolute disadvantage is less.

Answer 26

THEORY OF COMPARATIVE ADVANTAGE

Question 27

CURRENCY DEVALUATION

Answer 27

A reduction in the value of a country’s currency relative to other currencies.

Question 28

the land, labor, capital, and related production factors a nation possesses.

Answer 28

Resource Endowment

Question 29

the existence of similar preferences and demand for products and services among nations with similar levels of per capita income.

Answer 29

Overlapping Demand

Question 30

unique differences producers build into their products with the intent of positively influencing demand.

Answer 30

Product Differentiation

Question 31

a theory explaining why a product that begins as a nation’s export eventually becomes its import.

Answer 31

International Product Life Cycle (IPLC)

Question 32

the purchase of stocks and bonds to obtain a return on the funds invested.

Answer 32

Portfolio investment

Question 33

the purchase of sufficient stock in a firm to obtain significant management control.

Answer 33

Direct investment

Question 34

the establishment of new facilities from the ground up.

Answer 34

Greenfield investment

Question 35

the purchase of an existing business in another nation.

Answer 35

Cross-border acquisition

Question 36

Theory that foreign direct investment is made by firms in industries with relatively few competitors, due to their possession of technical and indigenous firms.

Answer 36

MONOPOLISTIC ADVANTAGE THEORY

Question 37

Theory suggesting that strategic rivalry between firms in an oligopolistic industry will result in firms closely following and imitating each other’s international investments in order to keep a competitor from gaining an advantage.

Answer 37

STRATEGIC BEHAVIOR THEORY

Question 38

an industry with a limited number of competing firms.

Answer 38

STRATEGIC BEHAVIOR THEORY

Question 39

HOW EXCHANGE RATES CAN CHANGE THE DIRECTION OF TRADE?

Answer 39

Important points: 1. exchange rates varies depending on a country's buying capacity 2. high currency - high cost of products, vice versa 3. High currency countries prefer to trade with low currency countries in terms on exporting. Pero import kay dili kaayo kay lugi sila.

Question 40

International Product Life Cycle

Answer 40

Growth, Maturity, Decline, Death