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2nd Year - 1st Sem (Prelims) > International Business and Trade > Flashcards

International Business and Trade Flashcards

1
Q

a business that is
carried out across national borders.

A

INTERNATIONAL BUSINESS

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2
Q

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

A

FOREIGN BUSINESS

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3
Q

a company with
operations in multiple nations.

A

INTERNATIONAL COMPANY

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4
Q

Differentiate International Business and International Companies

A

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

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5
Q

External Forces in environment of international business

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

Internal Forces in environment of international business

A
  1. Factors of Production (Land, labor, capital)
  2. Activities of Orgs
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7
Q

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

A

THE DOMESTIC ENVIRONMENT

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8
Q

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

A

THE FOREIGN ENVIRONMENT

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9
Q

FORCES IN THE FOREIGN ENVIRONMENT:

A
  1. Forces have different values
  2. Forces can be difficult to assess
  3. The forces are interrelated
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10
Q

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

A

THE INTERNATIONAL ENVIRONMENT

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11
Q

FORCES IN THE INTERNATIONAL ENVIRONMENT:

A
  1. Decision making is more complex
  2. Self- reference criterion
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12
Q

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

A

Secret

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13
Q

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.

A

TRANSNATIONAL CORPORATION

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14
Q

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.

A

FOREIGN DIRECT INVESTMENT (FDI)

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15
Q

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

A

EXPORTING

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16
Q

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

A

IMPORTING

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17
Q

WHAT IS DRIVING THE
INTERNATIONALIZATION OF BUSINESS?

A
  1. Political Drivers
  2. Technological Drivers
  3. Market Drivers
  4. Cost Drivers
  5. Competitive Drivers
18
Q

Selling product worldwide

A

Globalization

19
Q

Application of innovation available worldwide to local products

A

Internationalization

20
Q

MAJOR TRADING PARTNERS: THEIR RELEVANCE FOR MANAGERS

A
  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)
21
Q

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

A

Trade Deficit-

22
Q

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

A

Trade Surplus-

23
Q

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

A

MERCANTILISM

24
Q

How to increase wealth according to mercantilism?

A
  • increase export and decrease imports
25
Q

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

A

THEORY OF ABSOLUTE ADVANTAGE

26
Q

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.

A

THEORY OF COMPARATIVE ADVANTAGE

27
Q

CURRENCY DEVALUATION

A

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

28
Q

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

A

Resource Endowment

29
Q

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

A

Overlapping Demand

30
Q

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

A

Product Differentiation

31
Q

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

A

International Product Life Cycle (IPLC)

32
Q

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

A

Portfolio investment

33
Q

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

A

Direct investment

34
Q

the establishment of new
facilities from the ground up.

A

Greenfield investment

35
Q

the purchase of an existing
business in another nation.

A

Cross-border acquisition

36
Q

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

A

MONOPOLISTIC ADVANTAGE THEORY

37
Q

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.

A

STRATEGIC BEHAVIOR THEORY

38
Q

an industry with a limited number of
competing firms.

A

STRATEGIC BEHAVIOR THEORY

39
Q

HOW EXCHANGE RATES CAN CHANGE THE DIRECTION OF TRADE?

A

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.

40
Q

International Product Life Cycle

A

Growth, Maturity, Decline, Death

2nd Year - 1st Sem (Prelims) (11 decks)

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