International Business Chapter 8 Part 2
8%
Suppose Country A has its real GDP growth at 6% in the year of 2016 as compared to 2015, and its inflation rate in 2016 is 2%. What is its nominal GDP growth rate from 2015 to 2016?
False
The "cookie-cutter" strategies that MNEs developed decades ago are considered most suitable for achieving success in emerging markets.
10,248; 30,744
The median household income in Brazil is estimated to $15,372 in 2015. According to the middle class definition, the household having the annual income between ______ and _____ is considered as a middle class household.
median
The middle income class is identified as having the income that fall into between the two-thirds of and twice the _______ income of the nation.
South Korea
Which of the following countries is home to the Hyundai Group?
governments
______ in emerging markets as well as developing countries often formulate economic development plans and annual programs to build or improve national infrastructure
successful firms, emerging markets
___________ develop a deep understanding of the distinctive characteristics of buyers, local suppliers, and distribution channels in __________
new capabilities
acquire _____ that improve the firm's competitive advantages
PPP
an adjustment for prices that reflects the number of goods that consumers can buy in their home country, using their own currency and consistent with their own standard of living
governments
buy enormous quantities of products and services
discretionary consumption
buying goods beyond simple necessities
FC
by collaborating w/ an _________ -reduce the risks, time and capital requirements of entering the market -develop helpful relationships with governments and other key local players -target market opportunities more rapidly and effectively -overcome infrastructure-related hurdles -leverage FC resources and local contracts
FC
control the majority of economic activity and employment in emerging markets
middle class households, emerging markets
demographic trends suggest that, in the coming 2 decades, the proportion of _________ in __________ will continue to grow, representing enormous spending power
cyclical poverty
despite strong growth in emerging markets, many of these nations face ______ that reduces access to basic social infrastructure
purchasing power parity (PPP)
economists estimate real buying power by calculating GDP statistics based on __________
tenders
emerging market governments regularly announce ________
FC
enjoy various competitive advantages in their home countries, including government protection and support, extensive networks in various industries, superior market knowledge, and access to capital
tenders
formal offers made by a buyer to purchase certain products or services
FC
heavily supported by governments, provide huge tax revenues and facilitate national economic development
emerging markets
in _______, the size and growth rate of the middle class are signals of a dynamic market economy
state enterprises
in areas such as railways, airlines, banking, oil, chemicals, and steel buy goods and services from foreign companies
government agencies and state-owned enterprises
in emerging markets and developing economies, _______ are an important customer group
middle class
in emerging markets, have access to substantial disposable income, this allows them to engage in discretionary consumption
development
in emerging markets, such basic infrastructure is still in _______
Asia
in population terms, ______ esp China, is expected to account for about half the world's middle class by the year 2020
microfinance
increasingly, mainstream banks view ______ as a source of future growth
political instability
is associated with corruption and weak legal frameworks that discourage inward investment and the development of a reliable business environment
excessive bureaucracy
is usually associated with a lack of transparency, suggesting that legal and political systems may not be open and accountable to the poublic
family conglomerate (FC)
large, highly diversified company that is privately owned
market potential
managers examine 3 important statistics to estimate ________ : per capita income, size of the middle class, and market potential indicators
FC
may hold the largest market share in each of several industries in its home country
substantial price differences
per-capita GDP converted at market exchange rates paints an inaccurate picture of market potential because it overlooks the ________ between advanced economies and emerging markets
FC
possess extensive distribution channels throughout their home countries, deep understanding of local markets and customers, have political influence
lower
prices are usually _____ for most products and services in emerging markets compared to advanced economies
microfinance
provides small-scale financial services, such as microcredit and microloans, that assist entrepreneurs to start businesses in poor countries
tenders
request for proposals (RFPs)
middle class consumers
tend to be better educated, hold professional jobs, take holidays, own a car
public sector
the _____ influences the procurement activities of various private or semiprivate corporations
middle class
the _____ makes up the largest proportion of households in advanced economies
PPP concept
the ______ suggests that in the long run, exchange rates should move toward levels that would equalize the prices of an identical basket of goods and services in any 2 countries
middle class in emerging markets
the _______________ are also distinguished by unique values, attitudes, and expectations toward the future, active in politics, tolerant of alternative lifestyles
flexibility
the ability to customize offerings and devise innovative business models depends largely on the firm's ______ and entrepreneurial orientation
reliable or consistent
the absence of ____________ governance from recognized government authorities adds to business costs, increases risks, and reduces managers' ability to forecast business conditions
local market knowledge, establish supplier and distributor networks, develop key government contacts
through partnering with well qualified local companies MNEs can access: (3 things)
research
to counter competition, managers must initially conduct _____ to develop an understanding of the new challengers
infrastructure
where suppliers and distribution channels are lacking they develop their own _____ to obtain needed raw materials and components or move finished goods to local buyers
$1 million
According to the "How BRICS consumers behave" report by Euromonitor International, China had the greatest number of High Net Worth Individual (HNWI) in 2011 among the four BRIC countries. HNWI refers to the people having at least a total of _________ investable assets, not including primary residence, collectibles, consumables and consumer durables.
The income inequality is greater in South Africa than in India.
According to the reports of Euromonitor International, the Gini coefficient is 0.636 in South Africa in 2013, and 0.406 in India in the same year. Which of the following is true?
14%
Advanced economies account for about ________ percent of the world population.
constructive relationships
MNEs build _______ with emerging market communities where they operate, partly to understand local conditions better and partly to earn customer respect and loyalty
prices appropriate
MNEs must set ______ for local conditions
local companies
MNEs often seek alliances with well-qualified ______ in countries characterized by inadequate legal and political frameworks