international business test 3

Advantages of using trade shows to promote products in international markets

A trade show is an occurrence held to bring in conjunction members and people of a particular business org and industry to display, demonstrate, demo and discuss latest and newest goods, products, and services. They increase the awareness in the market, increase profiles, allows for face-to-face interactions and relationship building, promote networking, create long lasting impressions, create lead of customers and clients, allows the company to reach target audiences, and efficiently advertise.

Why companies need to research international markets

Companies need to research their international markets because it allows them to identify new opportunities for growth and expansion, formulate policies and strategies for marketing their product or service, establish strong communication, enable product forecasting and what may need to be changed or adjusted to make the product or service successful in that market, learn from other companies on what works and what doesn't, export planning, and cost estimate.

1) How does financial ratio analysis enable an investor to compare two companies?

Financial ratio analysis enables investors to compare two companies because it looks at price to earnings return on assets, dividend yield and payout, and many more that can influence investment decisions.

How does auditing contribute to better financial reporting

Financial reporting is vital for the management, stakeholders and other investors. Financial reporting reflects the current financial position, future planning and intrinsic value of a business or company. Management, stakeholders and investors take the relevant decisions on the basis of financial reporting. Companies disclose it on quarterly and yearly basis. Because it is very important so, maintaining accuracy of information, transparency, standardized format, right information, required information as per the GAAP etc. are very important for the better financial reporting. A wrong information in financial reporting or improper format of financial reporting can misguide the government, stakeholders, management and other investors and it leads to the wrong decision making that becomes the reason of losses. Third party auditing ensure the reliability and accuracy of the financial reporting and it is legally compulsory also. Third party auditor checks the following things: 1. Accuracy of data: Auditor ensure that the all the information of financial reporting is accurate or have some misrepresentation. 2. Error checking: Auditor checks errors by cross checking of all the record transactions and invoices used to prepare financial statements by the company. 3. Used words: Auditor check the words that is used in financial information. is it a standard word or company has used some fancy words to confuse the management, government, stakeholders and investors to get the benefits. Because financial report is audited by the independent third-party auditor which has no any monetary or non-monetary interest in the company and does own work honestly so, it is reliable for management, government, stakeholders and investors. So, it is vital and contribute to better financial reporting.

Derivatives securities used to hedge the fluctuation in currency values on the cash flows of firms and investors

Forward contracts, options, swaps, money market hedging, and futures can be used.

Advantages of freight forwarders

Freight forwarders are very useful in transportation. They act as an agent for companies to ship products internationally. They also perform negotiations with airlines and ports to transport products, expedite clearing customs in both countries involved. They are price efficient, have uniqueness, have fast service, and they help in the overall process of globalization. Through all of these things, it allows counties to grow and expand and create a name in the global market.

Potential problems global businesses face when outsourcing or subcontracting

Global businesses can face potential problems when they outsource or subcontract their manufacturing work to companies in other countries. For example, they could deal with protective tariffs that are used to protect domestic firms. Secondly, the quality of outsourced goods can be less. They may also have to deal with different staffing policies, cultural differences, government differences, and more.

1) How should a parent firm evaluate investments in its international subsidiaries? How could an estimate of cost of capital for discounting purposes be estimated?

Multinational Companies (MNC) have to think about many things before making investments in their foreign subsidiary. In the case of making new investment like buying a new machinery or starting a new plant, they have to think about quite a few things. Most important thing which they to worry about is the foreign currency risk ( Forex Risk), i.e. the risk associated with the change in foreign currency rate. So, when making an investment companies have to be pretty sure about the returns and also how the forex movement may happen. No one will be very dure how to make predictions about the Forex but at least we will be able to make reasonable estimate about the same. Since investing in foreign subsidiary is bit more riskier than investing in the home country the rate of return expected will also be higher than the usual cost of capital. Also, by taking the risk in the foreign country & also the industry in which that subsidiary operates normally the discount factor used for that project will be higher than the one used in home country.

How can global operations management be used as a source of competitive advantage

Operations management is the management of the direct resources that are involved in the production system of a business organization. It has four functions: procurement, production, logistics, and r&d.

The factors a firm should consider when making an outsourcing decision

Outsourcing is when a firm has been making goods and services in-house, and then decides to buy these goods and services from suppliers. Firms should consider cost, resource and technology, performance, and competency for what they want outsourced.

Main sources of finance for international trade and investment. Short term and long term.

Some main sources of financing for international trade and investment include commercial banks that provide loans, syndicates that make a loan to a firm, payment in advance, and international agencies that help with set up and raising of money. Short term finance sources. Short-term finance sources are usually associated with start-up and long-term goes in depth and is costly.

Standardization vs adaptation

Standardization is the market strategies used in international markets that are the same as those used in domestic markets. Adaptation is the marketing strategies used in international markets that are different from those used in the domestic market.

How a business should choose a location for production facilities

The location should be picked based on security, potential for growth, and fit the current needs of the organization such as cost, size, type of location, etc.

Do you think that supply chain mgmt and ERP systems have helped both businesses and consumers

The merging of supply chain management and ERP systems have helped majorly both businesses and consumers. The benefits are as following: Good visibility of the supply chain metrics such as Time to Ship, Cost to serve the customer, etc. Simplification of the complex supply chain processes such as warehousing, logistics, etc. Immediate resolution of the issues in supply chain. Good customer service. Lowering of the supply chain costs.

Product life cycle assisting international marketers

The product life cycle is the depiction of the sales and profits for a new product over its lifetime. It has four stages, introduction, growth, maturity, and decline. This can help international marketers through the management of a product and helps them determine whether or not any changes or additions should be made to enable product success.

Three major markets that exist in all foreign markets

The three major markets that exist in all foreign markets are the consumer market, the industrial market, and the government market. The consumer market allows consumers to buy products, goods and services. Industrial markets are where companies buy products to further production of other goods. The government market emphasizes infrastructure, health care, and government work.

1) Why evaluate a country's tax system before locating operations.

They should evaluate the tax system because there are so many levels of tax that may be implemented when the firm begins operations in the location, such as property taxes, income tax, etc. Therefore, it is smart to know how much they will be, which tax bracket they would be in, and more to see if they can afford it.

1) Benefits of every country using the same GAAP.

This would allow for bookkeeping and accounting rules and regulations to be standardized across the world and make financial statements preparation and reading/ use easier. However, countries may not adopt IFRS because they like doing things their own way and those rules may be stricter than what they do.

The difference between foreign exchange risk arising from translation, transaction, and economic risk

Translation risk is based on translating assets in foreign currency to the domestic currency on financial statements and has short term effects. Transaction risk is how short-term changes in exchange rates affect operating costs and revenues of firms engaging in international business. Economic risk is the ways in which long term exchange rate movements affect firms.

Describe U.S. GAAP and why it differs from GAAP in other countries.

US GAAP - These are generally the accepted accounting practices in the united states of America. This refers to the accounting rules and regulations used in the united states to organize, present and report the financial statements of the entities which include the privately held or publicly traded companies, the non-profit organization, and government. DIFFERENCE BETWEEN US GAAP AND GAAP OF OTHER COUNTRIES (1) PRINCIPLE VS RULES - The major difference between US GAAP AND IFRS (international financial reporting standards) are IFRS accounting regulations reflect the principles-based approach having more qualitative guidance whereas US GAAP reflects the rules-based approach where companies classify transaction based upon numerical cutoff. (2) INVENTORY - Last in first out (LIFO) is commonly used by the US companies very frequently to lower the tax liabilities. by expensing inventory that is purchased most recently first, as price rise companies reduced net income. On the other hand, (LIFO) inventories are not allowed in the (IFRS) accounting system. (3) DEVELOPMENT COST - in case of small business Under US GAAP the cost of research and development generally expensed as incurred, however, under IFRS system certain research and development cost may be capitalized. (4) LONG-LIVED ASSETS - US GAAP doesn't allow revaluation of assets. IFRS allows some revaluation based on fair value as long as it is completed regularly. The impairment loss for long-lived assets under GAAP is calculated as the amount exceeding fair value on the other hand Under IFRS, such assets are calculated as the amount an asset exceeds "recoverable amount

Financial vs Managerial accounting

Financial accounting focuses on financial statements and their accuracy and managerial focuses on management within the company in order to run firms effectively and correctly.

Disadvantages of using channels of distribution

Some disadvantages that can result from companies using channels of distribution to market products overseas include lack of control in communication, language and cultural barriers, rules and regulation barriers, higher expenses, and time consuming.

Negotiate provisions for NAFTA

I would negotiate for harassment protection, gender equality, closing the wage gap, environment and health regulations, and better benefit plans.

Why is it often difficult for supervisors, in any culture, to give employees a negative performance appraisal?

Because it can lead to bias and prejudice.

Argue why some companies should pursue global production and other companies should not

I think that companies that can achieve high levels of competitive advantage and also have the ability to take their product internationally should pursue global production. The company should only pursue global production if the cost is less than producing locally. These companies need size and resources as well, especially in order to be sustainable and profitable.

Pros and Cons of using the internet for virtual staffing

I think two big issues with virtual staffing could be productivity and engagement. I think it is easier to slack on work and responsibilities when you are not in an im-person setting. Engagement would be low because you don't have the in-person relationships that build trust. Without trust, it is hard for a company to run effectively and have high productivity.