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International Business > INTERNATIONAL EXAM > Flashcards

INTERNATIONAL EXAM Flashcards

1
Q

Interdependence

A

Interdependence is the reliance of two or more groups on the actions of one another to fulfil certain wants or needs.

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2
Q

Self-sufficiency

A

Self-sufficiency is the ability to provide for all of your basic needs, such as food, clothing, shelter, and water without relying on anyone else.

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3
Q

Primary industries

A

Primary industries involve extracting natural resources (e.g., agriculture, mining).

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4
Q

Secondary industries

A

Secondary industries focus on manufacturing and processing these raw materials into finished goods.

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5
Q

Tertiary industries

A

Tertiary industries provide services rather than goods (e.g., retail, healthcare).

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6
Q

Imports

A

Imports are goods and services bought from other countries

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7
Q

Exports

A

Exports are goods and services sold to other countries.

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8
Q

trade surplus

A

A trade surplus occurs when a country exports more than it imports, resulting in a positive balance of trade. = More jobs domestically.

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9
Q

trade deficit

A

A trade deficit happens when a country imports more than it exports, leading to a negative balance of trade. = Not enough production in your country

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10
Q

Protectionism

A

Protectionism uses barriers to trade to protect domestic producers/industries from foreign competition.

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11
Q

tariff

A

A tariff is a tax imposed on imported goods to protect domestic industries.
- Winners = Domestic governments, local producers and local employees
- Losers = Foreign producers, consumers and foreign employees

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12
Q

trade quota

A

A trade quota limits the number of a particular good that can be imported or exported during a specific time period.

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13
Q

trade embargo

A

A trade embargo is a government-imposed ban on trade with a specific country.

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14
Q

trade sanction

A

A trade sanction is restrictions or penalties imposed by one country (or a group of countries) on another to influence its behaviour. This can include seizing or freezing assets, legally restricting trade and limitations on diplomatic travel and contact.

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15
Q

licensing agreement

A

A licensing agreement is an arrangement where a company allows another company to use its brand name, patents, or technology in exchange for a fee

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16
Q

exclusive distribution of rights

A

An exclusive distribution of rights is a contract that grants only specific distributors the right to sell a company’s product in a particular region.

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17
Q

Franchising

A

Franchising is a business model where a company (franchisor) allows another party (franchisee) to operate using its brand, products, and business methods, in exchange for fees and royalties

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18
Q

joint venture

A

A joint venture is a business arrangement where two or more companies combine resources and expertise to achieve a specific goal, sharing profits and risks

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19
Q

foreign subsidiary

A

A foreign subsidiary is a company in one country that is fully or partially owned by a parent company located in another country, operating as a separate legal entity

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20
Q

exchange rate

A

The exchange rate the amount of currency in relation to the currency of another country.

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21
Q

floating exchange rate

A

A floating exchange rate is a currency valuation system where the value of a country’s currency is determined by market forces of supply and demand relative to other currencies, without direct government or central bank intervention.
Canada has a floating exchange rate.

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22
Q

Theocracy

A

Theocracy is where it believes that a god is recognized as the state’s supreme civil ruler.

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23
Q

Monarchy

A

Monarchy is a form of government in which all political power is with an individual, known as a monarch, or king or queen.

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24
Q

Totalitarianism

A

Totalitarianism is an extreme form of autocracy where the government seeks to control all aspects of public and private life.

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25
Q

Democracy

A

Democracy is a state governed by all eligible members of the population through elected representatives.

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26
Q

Autocracy/authoritarianism

A

Autocracy/authoritarianism is a state governed by a single or a small group of people with unlimited power.

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27
Q

Developed Countries Characteristics

A

Industrialized/ first world countries.
High per capita income/GDP
Main focus is mostly on secondary and tertiary industries
High standard of living
Major advancements in healthcare and technology
Leaders in international business
Strong trade alliances, agreements, and organizations

28
Q

Economies in transition characteristics

A

Moving from a centrally planned economy towards a market economy
Transition involves; decreasing the role of government, privatising government assets, reducing tariffs, and liberalising markets
Some problems; inflation, unemployment and widening income gaps

29
Q

Developing country’s characteristics

A

Many people live in severe poverty and have substandard living conditions
The economies are mostly agricultural or dependent on natural resources
There is a significant lack of essential social services, including healthcare and education, and poor infrastructure

30
Q

Market economy/capitalism (3 components)

A

Private property: people and companies are encouraged to own things like land, buildings, cars and equipment. And they can buy, rent, trade, sell, or give their property to anyone they choose
Competition is critical in this system, as companies strive to outdo each other in quality, services, price, reputation and warranties, leading to better products and prices for consumers and a wider selection of new products.
Profit is the reward for taking risks, and profitable companies not only provide employment and create new products but also have the freedom to reinvest in the business or spend on personal goods, as the profit belongs to the business owners.

31
Q

Centrally planned economy/communism (3 components)

A

Private property: Ownership is restricted. Citizens may own small household items and furniture, but the government owns all housing and businesses. The government determines who will work in the businesses, sets wages, and decides where people will live.
Competition is limited. The government determines the price, quality, style, and amount of goods and services. Consumers have little choice in the products sold.
All Profit belongs to the government. The profit is reinvested into the business or used for social programs such as education and the military

32
Q

Mixed economy (3 components)

A

Private property: property is owned by individuals, corporations, or the government. The government owns schools, parks, and real estate, and sets regulations on ownership. Corporations run by the government are called Crown Corporations.
Strong Competition exists among corporations. However, the government may also be a competitor, as it owns and operates certain businesses and services
Profit is encouraged but taxed to support government projects and provide social assistance. Taxes are collect at the federal and provincial levels through sales tax, income tax, and corporate taxes. Municipal projects are funded through property taxes.

33
Q

4 stages of the business cycle (characteristics)

A

Recession, Trough, Expansion (Recovery, and Peak

34
Q

Recession

A

The economy slows down for two consecutive quarters
People buy less, causing businesses to cut back
Higher unemployment
Business closures

35
Q

Trough

A

The economy is at its weakest
Highest peak of unemployment
Start of recovery
People start buying again after delaying purchases

36
Q

Expansion (Recovery)

A

Economic growth
More spending
Job growth
New businesses

37
Q

Peak

A

The highest point of the economy
End of growth, contraction begins
Higher interest rates
Less demand

38
Q

Leading indicators

A

Predict where the economy is headed
These indicators adjust before the economy experiences a change
They help guide investors, businesses, and governments to act according to the upcoming economic trends

Example: Agreements for new construction projects. Significance: Indicates future construction activity and economic growth.

38
Q

Absolute advantage

A

The ability of one country to use its resources to make a product or service more efficiently than other countries
Countries export goods and services in which they have an absolute advantage, and import goods or services in which other countries have an absolute advantage

39
Q

Lagging indicators

A

Reflect changes after the economy has experienced a shift
These indicators do not adjust until after the economy has changed, often taking two or three quarters to reflect changes
Example: The earnings of companies after expenses. Significance: Profits typically increase after economic growth has occurred.

39
Q

Comparative advantage

A

The ability of a country to produce goods at a lower opportunity cost than another country

40
Q

Coincident indicator

A

Move in conjunction with the business cycle
These indicators change at the same time as the overall economy
Example: The volume of goods and services traded between countries. Significance: When economies are slumping, countries import fewer goods and services. When the economy is strong, countries import more goods.

41
Q

Culture

A

Culture is the collective knowledge, experience, beliefs, values, religion, symbols, and possessions acquired by a group of people who have lived in the same region or country for years. Transmitted from one generation to the next through education and example

42
Q

subculture

A

A subculture is a cultural group within a larger or predominant culture, distinguished by factors such as class, ethnic background, and religion, and unified by shared beliefs and interests. Many immigrant communities exist as subcultures in Canada

43
Q

counterculture

A

A counterculture is a culture that has values or lifestyles in opposition to those of the currently accepted culture. It opposes mainstream values and attitudes, usually to influence change

44
Q

impact of culture on foreign markets

A

The impact of culture on foreign markets refers to how cultural differences between countries influence business practices, consumer behaviour, and regulatory compliance. Canadian businesses operating internationally may encounter variations in child labour, discrimination, wage standards, workplace practices, and the treatment of indigenous cultures. Adapting to these differences is essential for ethical and effective operations

45
Q

Cultural determinants

A

History
Religion
Geography
Social structure
Political philosophy
Language
Economic philosophy
Education

46
Q

Monochronic time perception

A

Time view is linear and sequential
One task at a time, with a logical and orderly progression
High importance on punctuality and following schedules
European

47
Q

Polychronic time perception

A

Time view is non-linear, with multiple activities happening simultaneously
Flexible approach, handling many tasks at once
Less emphasis on strict schedules; results take precedence over timelines
Mediterranean, Latin, and African cultures

47
Q

3 decisions needed to be made with “Product” when selling internationally (PIS)

A
  1. Packaging
    Package weights and colours
    Legal Requirements
    Labelling requirements
    Language requirements
  2. Ingredients
  3. Style
48
Q

Demographics

A

Age
Stage in the family life cycle
Occupation
Economic circumstances
Lifestyle
Social influence variables (family background, reference groups, roles and status

49
Q

Logistics

A

Logistics consists of the flow of goods and services both into and out of an organization. It includes the following components:
- Transportation
- Inventory Management
- Warehousing and storage
- Packaging

49
Q

Forms of promotion

A

Advertising
Premiums (free goods offered with purchase)
Coupons
Contests
Personal selling
Social media

50
Q

Penetration pricing

A

Setting a low price to increase sales and market share

51
Q

Price skimming

A

Entering a market at a high price during the introduction stage

52
Q

Competition pricing

A

Setting a price based on competitors’ pricing

53
Q

Product line pricing

A

Pricing different products within the same range at different price points

54
Q

Premium pricing

A

Setting a high price to reflect the exclusiveness of the product

55
Q

Acquisition

A

An acquisition is when another company buys a competing company in a foreign market. Sometimes the most effective way for a company to handle competition in both foreign and domestic markets

56
Q

Psychological pricing

A

Considering the psychology and market positioning of the price (199$ instead 200$)

57
Q

Competitive advantage

A

The ability of one company to produce a product more cheaply or uniquely than another company.

58
Q

Lower production cost (Competitive advantage)

A

producing more products in one factory using the same labour and shared overhead costs makes each unit cheaper to produce

59
Q

Product differentiation (Competitive advantage)

A

differences in flavour, quality, packaging, scent, etc., that make a product stand out from competitors

59
Q

Lower distribution costs (Competitive advantage)

A

companies with factories located in their target market incur lower transportation and distribution costs

60
Q

Brand equity (Competitive advantage)

A

the number of consumers that can identify and prefer the brand, contributing to customer loyalty and higher sales

61
Q

What and who are stakeholders?

A

Stakeholders are individuals or groups that have an interest in the success and actions of a company

Primary stakeholders have a direct impact on the company’s operations and profitability. E.g. Customers, shareholders and suppliers

Secondary stakeholders have influence or are influenced by the company but do not directly affect its profitability. E.g. Media, local communities and government

62
Q

Ethical dilemma

A

An ethical dilemma is a situation in which a person or organization must choose between two conflicting moral principles or values, making it difficult to determine to right course of action.

International Business (1 decks)

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