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International Business > Unit #1 Good Copy > Flashcards

Unit #1 Good Copy Flashcards

1
Q

Define business.

A

The manufacturing and or sale of goods and services to satisfy the needs and wants of consumers and to make a profit.

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2
Q

Define transaction.

A

Exchange of things of value.

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3
Q

Define domestic business.

A

Transactions that happen within borders of a specific country.

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4
Q

Define international business.

A

Across border transactions.

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5
Q

Define domestic market.

A

Customers who live in your country.

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6
Q

Define foreign market.

A

Customers who live in another country.

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7
Q

Define trade.

A

The action of buying and selling goods and services.

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8
Q

Define trading partner.

A

A country or company that another country or company does business with regularly.

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9
Q

Define international/foreign trade.

A

Exchange of goods and services across international borders.

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10
Q

What is the difference between domestic transactions and foreign transactions?

A

Domestic transactions happen within the country and foreign transactions happen outside of the country.

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11
Q

Why is it difficult to be a totally domestic business?

A

There are many reasons. The quality standards are low, there is little competition, not a wide range of customers, not able to grow.

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12
Q

What are 7 ways for companies to participate in international business practices?

A
  1. Foreign Portfolio Investment - invest through stocks or bonds
  2. Importing - bring in products or services
  3. Exporting - sending goods and services elsewhere
  4. Licensing Agreements - give permission to use brand name, product, recipe
  5. Franchise - granted to a person or group by a company to use that company’s name, services products and marketing
  6. Joint Venture - two countries/companies work together to make a third company
  7. Foreign Subsidiaries - branch that is almost run as its own entity in another country
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13
Q

Why do businesses participate in international business?

A

There are more consumers, new markets, possible partnerships, it is a common thing to do.

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14
Q

Define globalization.

A

Economies and cultures are integrated. Technology, investment, trade, migration, transportation and money flow.

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15
Q

What is a primary industry? Examples.

A

The sector of economy characterized by the extraction of natural resources from earth or sea. They add value to products and countries depend on Canada.
Ex) fishing, forestry, mining, oil

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16
Q

What is a secondary industry? Examples.

A

Create a finished, usable product.

Ex) Ingersoll car plant.

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17
Q

What is a tertiary industry?

A

Provides services. Ex) BMO (retail, banking, construction)

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18
Q

Define branch plant.

A

A factory owned by a company based in another country.

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19
Q

Pros of Globalization.

A

Free trade, many markets, increase economic output, longer/happier people & lives, celebrate individualism, makes people richer.

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20
Q

Cons of Globalization.

A

Losing family time due to technology, lots of tree cutting, climate change, still violence, people who are working are sick and people who are working make very little money.

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21
Q

How does international business help Canadians?

A

Variety of products, new markets, more jobs, foreign investments and new processes/technology.

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22
Q

How does international business hurt Canadians?

A

Loss of culture/identity, increased foreign ownership, reduced exports and economic destabilization.

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23
Q

Is it important for Canada to protect its culture?

A

Of course it is important for Canada to protect its culture. Each culture is unique and it is important to embrace the differences and be proud to be Canadian.

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24
Q

Define importing.

A

Bring in products or services.

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25
Q

Define exporting.

A

Send goods and services elsewhere.

26
Q

Define MNE.

A

Multinational enterprises.

27
Q

Define trade surplus.

A

Exported more than imported.

28
Q

Define trade deficit.

A

Imported more than exported.

29
Q

Define value added.

A

Money/worth added to a product as it is processed.

30
Q

Define licensing.

A

Gives a company permission to use a product, service, brand name or patent in exchange for a fee or royalty.

31
Q

Define franchise.

A

Granted to a person or group by a company to use that company’s name, services, products and marketing.

32
Q

Define joint venture.

A

Two countries/companies that work together and then a third company is created.

33
Q

Define strategic alliance.

A

A strategic alliance is when there are 2 companies in a joint venture but no 3rd company is formed.

34
Q

Define foreign subsidiary.

A

A branch that is almost run as it’s own entity in another country.

35
Q

What are Canadian subsidiaries?

A

GM, Kraft

36
Q

What are Canadian franchises?

A

Boston Pizza, Casey’s, Kernels, Second Cup, Mr. Sub

37
Q

What are Canadian joint ventures?

A

Trade Winds Ventures (mining)

38
Q

Define protectionism.

A

The practice of shielding domestic industries from foreign competition.

39
Q

Define tarrif.

A

Common, taxes put on products, raise costs of imports, local products are less money and more appealing.

40
Q

Define trade quota.

A

Government imposed limit on the amount of product that can be imported in a certain period of time.

41
Q

Define sanction.

A

Action taken by a country to coerce another to conform to an international agreement or norms of conduct. Aim to hinder economy and restrict transactions.

42
Q

Define trade embargo.

A

Ban on a product or country. Pressure foreign governments to change policies.

43
Q

Define floating rate.

A

Not fixed in relation to other currencies.

44
Q

Define fixed rate.

A

Fixed against other currencies.

45
Q

Define hard currency.

A

Stable currencies.

46
Q

Define soft currency.

A

Small economies, weak, fluctuates often.

47
Q

Define currency revaluation.

A

The increase in value of a currency because the demand is greater than the supply.

48
Q

Define currency devaluation.

A

Decrease in value, supply is greater than demand.

49
Q

Low Canadian $’s are good and bad.

A

Win - Canadian exporters, tourism, retailers

Lose - Importers, Canadian’s do not shop in the US, MLB teams in Canada (pay players in US dollars)

50
Q

Why are time zones a trade barrier?

A

It could be difficult to communicate with people from all over the world.

51
Q

Key player and key event.

A

Sir Humphrey Gilbert.

Attempted to start a colony in Eastern North America and began taxing fishermen in St. John’s.

52
Q

What events could decrease the importance of globalization?

A

War. If countries are not getting along and it is unsafe to trade they are not going to.

53
Q

Canada is a branch plant economy because..

A

Over half of the processing and manufacturing businesses in Canada are owned by foreign companies including Procter and Gable and Kraft foods.

54
Q

What are exclusive distribution rights.

A

When only specific retailers are allowed to sell a particular product. Ex) Only Indigo is able to sell American Girl Dolls

55
Q

Who creates trade barriers?

A

The government.

56
Q

Example of a tariff.

A

A shirt has added tax from labour, shipping, mark up and selling price.

57
Q

Example of a trade quota.

A

Firearms, steel, clothing.

58
Q

Example of a trade embargo.

A

There was a trade embargo on beef exports because of the mad cow disease found in Alberta.

59
Q

Example of standards.

A

Hair dryers have different plugs.

60
Q

Why are currency fluctuations important for an international company to understand?

A

They need to understand the differences so they do not lose great amounts of money.

61
Q

What causes currency to fluctuate?

A

Currency fluctuates based on supply and demand.

International Business (2 decks)

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