Topic 1 - Global Business Flashcards
Name the six dimensions of globalisation.
- Integration and interdependence of national economies
- Rise of regional economic integration blocs
- Growth of global investment and financial flows
- Convergence of buyer lifestyles and preferences
- Globalisation of production activities
- Globalisation of services
Name the five driving forces of globalisation
- Reduction of barriers to trade and investment
- Market liberalisation and adoption of free markets
- Industrialisation, economic development, and modernisation
- Integration of world financial markets
- Advances in technology
Define born global firm
A young entrepreneurial company that initiates international business activity early in its evolution, moving rapidly into foreign markets.
Define commercial risk
A firm’s potential loss or failure from poorly developed or executed business strategies, tactics, or procedures.
Define cross-cultural risk
A situation or event in which a cultural misunderstanding puts some human value at stake.
Define currency risk
Potential harm that arises from changes in the price of one currency relative to another.
Define distribution channel intermediary
A specialist firm that provides various logistics and marketing services for focal firms as part of international supply chains, both in the home country and abroad.
Define exporting
The sale of products and services to customers located abroad from a base in the home country or a third country.
Define facilitator
A firm or an individual with special expertise in banking, legal advice, customs clearance, or related support services that assists focal firms in the performance of international business transactions.
Define focal firm
The initiator of an international business transaction, which conceives, designs, and produces offerings intended for consumption by customers worldwide.
Define foreign direct investment (FDI)
An internationalisation strategy in which the firm establishes a physical presence abroad through acquisition of productive assets such as capital, technology, labour, land, plant and equipment (foreign entry strategy).
Define freight forwarder
A specialised logistics service provider that arranges international shipping on behalf of exporting firms.
Define globalisation of markets
Ongoing economic integration and growing interdependency of national economies.
Define importing/global sourcing
Procurement of products or services from suppliers located abroad for consumption in the home country or a third country.
Define International business
Performance of trade and investment activities by firms across national borders.
Define international investment
The transfer of assets to another country or the acquisition of assets in that country.
Define international portfolio investment
Passive ownership of foreign securities such as stocks and bonds to generate financial returns.
Define international trade
Exchange of products (merchandise) and services (intangibles) across national borders, typically through exporting and importing.
Define internationalisation
The tendency of companies to deepen their international business activity systematically.
Define multinational enterprise (MNE)
A large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries.
Define small and medium-sized enterprise (SMEs)
A company with 200 or fewer employees (Australia)
Define state-owned enterprise
A company that is founded and owned by a government in order to undertake commercial activities on the government’s behalf.
