Business Test Chapter 3

ex. of trade surplus

China keeps its prices lower so they export more than they import.

ethical legal and political barriers

- a company that decides to enter international marketplace must contend with potentially complex relationships among the different laws of its own nation, international laws, and the laws of the nation with which it will be trading. various trade restrictions imposed on international trade, changing political climates, and different ethical values.

Multinational corporations

- a corporation that operates on a worldwide scale, without significant ties to any one nation or region.

Trading companies

- a firm that buys goods in one country and sells them to buyers in another country.

franchising

- a form of licensing in which a company- the franchisor- agrees to provide a franchisee a name, logo, method of operation, advertising, products, and other elements associated with a franchisor's business, in return for a financial commitment and the agreement to conduct business in accordance with the franchisor's standard of operation.

Cartel

- a group of firms or nations that agree to act as a monopoly and not compete with each other, in order to generate a competitive advantage in world market.

Multinational strategy

- a plan, used by international companies, that involves customizing products, promotion, and distribution according to cultural technological, regional, and national differences.

Embargo

- a prohibition on trade in a particular product.

Quota

- a restriction on the number of units of a particular product that can be imported into a country.

fixed tariff

- a specific amount of money levied on each unit of a product brought into the country.

Global strategy

- a strategy that involves standardizing products (and as much as possible, their promotion and distribution) for the whole world, as if it were a single entity.

import traffic

- a tax levied by a nation on goods imported into the country.

Licensing

- a trade agreement in which one company-the licensor- allows another company-the licensee- to use its company name, products, patents, brand, trademarks, raw materials, and/or production processes in exchange for a fee or royalties.

General agreement on tariffs and trade(GATT)

- a trade agreement, originally signed by 23 nations in 1947, that provided a forum for tariff negotiations and a place where international trade problems could be discussed and resolved.

European Union (EU)

- a union of european nations established in 1958 to promote trade among its members, one of the largest single markets today.

North American Free Trade Agreement (NAFTA)

- an agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among canada, the united states and mexico.

World trade organization (WTO)

- an international organization dealing with the rules of trade between nations.

Asia-Pacific Economic Cooperation (APEC)

- an international trade alliance that promotes open trade and economic and technical cooperation among member nations

ad valorem tariff

- based on the value of the item. Ex. diamonds, luxury cars, fine art.

Economic barriers

- economic development and infrastructure ( the physical facilities that support its economic activities.)

Absolute advantage

- exists when a country is the only source of an item, the only producer of any item, or the most efficient producer of an item.

Strategic alliance

- is a partnership formed to create competitive advantage on a worldwide basis.

Exporting and importing

- many countries first get involved in international trade when they import goods from other countries for resale in their own businesses. Exporting sometimes takes place through countertrade agreements, which involve bartering products for other products instead of for currency

comparative advantage

- occurs when a country specializes in products that it can supply more efficiently or at a lower cost then it can produce other items.

International monetary fund(IMF)

- organization established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation.

International business

- refers to the buying, selling, and trading of goods and services across national boundaries

Exchange controls

- regulations that restrict the amount of currency that can be bought or sold.

Dumping

- the act of a country or business selling products at less than what it cost to produce them.

Balance of trade

- the difference in value between its exports and imports.

contract manufacturing

- the hiring of a foreign company to produce a specified volume of the initiating company's product th specification, the final product product carries the domestic firm's name.

direct investments

- the ownership of overseas facilities

exchange rates

- the ratio at which one nation's currency can be exchanged for another nation's currency.

offshoring

- the relocation of business processes by a company or subsidiary to another country.

Joint venture

- the sharing of the costs and operation if a business between a foreign company and a local partner.

outsourcing

- transferring manufacturing and other tasks to countries where labor and supplies are less expensive

outsourcing

- transferring manufacturing or other tasks to companies in countries when labor and supplies are less expensive.

trade surplus

- when a nation exports more goods than it imports, causing a favorable balance of trade.

ex of balance of trade

10 pounds of oranges to 10 pounds of bananas, bananas are cheaper. Bananas are lighter, would have to be more bananas for a balance of trade since oranges are heavier, has to be equal value.

balance of trade, foreign investments, foreign aid, loans, military, expenditures and money spent by tourists

A country's: comprise its balance of payments.

ex. of outsourcing

AT&T uses foreigners for customer service because it is cheaper labor than it would be in the U.S.

challenges and competition

Along with opportunities, changing technologies also create new _________________________.

gestures, posture, and facial expressions.

Body language is nonverbal, usually conscious communication through:

ex. of international trade

Cars made international because plant failed in detroit for cars.

columbia

Coffee is made in __________, but our climate is not efficient enough to make it as good.

spoken and written language.

Cultural differences include differences in:

ex. of absolute advantage

Diamonds are found in africa, are "rare' keeps the price up because they are abundant in Africa, aren't very rare.

body language and personal space

Differences in____________________________ also affect international trade.

countertrade agreements

Exporting sometimes takes place through countertrade agreements, which involve bartering products for other products instead of for currency

why nations trade

Grow oranges more efficiently in florida than they would in louisiana

technological infrastructure

Many countries lack the _________________ found in the united states, and some marketers are viewing such barriers as opportunities.

social and cultural differences

Most business people engaged in international trade underestimate the importance of ______________________________, but these differences can derail and important transaction.

the company retains control

Offshoring is different than outsourcing because ______________________ of the offshored businesses.

roads, airports, runways, etc.

The U.S. builds: _______________________ to ship their product back to the U.S. from other countries that don't have those necessities, makes business easier.

exporting and importing

To obtain needed goods and services and the funds to pay for them, nations trade by :

terrorism, military

Tourism went down due to _________ in the city, people getting laid off because not making money, _______ went up because of it and it hurt the economy.

ex. of comparative advantage

Toys R' Us made toys, went bankrupt because amazon was competing with them and kids don't want toys.

failure of businesses, the loss of jobs, and a lowered standard of living.

Trade deficits are harmful because they can mean :

barriers to international trade

When a company decides to do business outside of its own country, it will encounter a number of:

Personal space

___________ is the distance at which one person feels comfortable talking to another.

family roles

____________ also influence marketing activities, such as use of children in advertising.

Political considerations

________________ are seldom written down and often change rapidly.

trade deficit-

a nation's negative balance of trade, which exists when that country imports more than it exports.

World bank-

an organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries, formally known as the international bank for reconstruction and development.

Multinational strategy and Global strategy

developing strategies :

ethical legal and political barriers

laws and regulations Tariffs and trade restrictions

Capital one Coca cola Dow chemical BMW General motors IBM McDonalds

multinational corporations include:

raw materials and goods

nations trade to obtain _______________ that are otherwise unavailable to them or are available at a lower price than that at which they themselves can produce.

national and religious holidays, local customs

ompanies engaged in foreign trade must observe the _______________________ and_____________ of the host country.

perception of time

the people of other nations quite often have a different ______________.

balance of payments-

the difference between the flow of money into and out of a country.

Importing-

the purchase of goods and services from foreign sources

Exporting-

the sale of goods and services to foreign markets.

why nations trade

to obtain raw materials and goods that are otherwise unavailable to them or are available at a lower price than that at which they themselves can produce.

international trade, changing political climates, and different ethical values.

various trade restrictions imposed on: