International Business
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
"Intellectual property" refers to creations of the mind. These creations can take many different forms, such as artistic expressions, signs, symbols and names used in commerce, designs and inventions. Governments grant creators the right to prevent others from using their inventions, designs or other creations — and to use that right to negotiate payment in return for others using them.
Multiplier
"Investment multiplier is the ratio of change in equilibrium income and change in investment that causes it. The multiplier is the number by which the change in investment must be multiplied in order to determine the resulting changes in total income.
Global Pricing
- Very critical, only marketing mix which generates revenue all others cost. - Must be low enough to generate sales and high enough to gain profits.
Fourth stage of PLC, decline, is characterized by:
- a concentration of production in developing countries - an innovating country becoming a net importer
Third stage of PLC, maturity is characterized by:
- a decline in export from the innovating country - more product standardization - more capital intensity - increased competitiveness of price (longer production run reduce per unit cost) - production start-ups in emerging economies
the objectives of Foreign trade policy
1. Foreign trade regulation 2. Implementation and augmentation of export volume and managing the imports of the country. 3. Creating a favorable impact on the country's BOP.
official Reserve account and it's components
1. Gold 2. Foreign Exchange 3. Reserve position in IMF 4. Special Drawing rights
Exceptions of GATT
1. Government services, those which are neither supplied on commercial basis nor in competition with other suppliers. 2. Air transport services.
BOP why is it vital?
1. Reveals financial and economic status 2. Reveals whether the currency is appreciating or depreciating. 3. Helps decide on fiscal and trade policies. 4. helps understand economic dealings with other countries.
Laissez-faire approach
1. one that allows market forces to determine trading relations because some countries believe government programs lead to inefficiency. 2. Restricts government intervention in the economy. 3. The only role of government in a laissez-faire economy is to prevent any coercion against individuals (price control). 4. Free trade theories (absolute advantage and comparative advantage) which prescribed that government should not intervene directly to affect trade.
International trade allows a country
1. to specialize in the manufacture and export of products that it can produce efficiently. 2. to import products that can be produced more efficiently in other countries. 3. create jobs and boost economic growth. 4. companies gain a competitive advantage in global trade.
Properties of Global segments
1.Identifiable (capable of being identified) 2.Sizable (large in amount) 3.Accessible (capable of being reached) 4.Stable (subject to little fluctuation) 5.Responsive (the quality of being responsive) 6.Actionable (affording grounds for action)
Bill of landing
A bill of lading is a receipt for goods delivered to the common carrier as a means for transportation, a contract for the series rendered by the carrier, and a document of title.
Certificate of Origin
A certificate of origin indicates where the products originate and is usually validated by an external source, such as the chamber of commerce. It helps countries determine the specific tariff schedule for imports.
pro forma invoice
A pro forma invoice is an invoice like a letter of intent from the exporter to the importer that outlines the selling terms, price, and delivery if the goods are actually shipped. If the importer likes the terms and conditions, it will send a purchase order an arrange for payment. At that point, the exporter can issue a commercial invoice.
Traditional Economy
An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. is an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rules and manner of their distribution. - Rural and farm based.
Export packing list
An export packing list itemizes the material in each individual package, indicates the type of package, and it attached to the outside of the package. The shipper or freight forwarder and sometimes custom officials, use the packing list to determine the nature of the cargo and whether the correct cargo is being shipped.
Human Development Index (HDI)
An indicator of the level of development for each country, constructed by the United Nations, that is based on income, literacy, education, and life expectancy.
Origin of WTO
The GATT mainly dealt with trade in goods, where as the WTO and its agreements also cover trade in services and intellectual property. • The World Trade Organization (WTO) came into being on January 1st 1995. It was the outcome of the lengthy (1986- 1994) Uruguay round of GATT negotiations. The WTO was essentially an extension of GATT.
Role of IMF: Financial Lending
The IMF assists countries hit by crises by providing them financial support to create breathing room as they implement adjustment policies to restore economic stability and growth. It also provides precautionary financing to help prevent and insure against crises. • The IMF provides financial support for balance of payments needs upon request by its member countries.
Role of IMF: Capacity development
The IMF provides technical assistance and training to help member countries build better economic institutions and strengthen related human capacities.
ICSID (International center for the settlement of investment disputes)
The International Centre for Settlement of Investment Disputes: The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes
IDA
The International Development Association (IDA) provides interest-free loans — called credits — and grants to governments of the poorest countries. IDA complements the World Bank's original lending arm—the International Bank for Reconstruction and Development (IBRD). IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.
Multifibre Agreement (MFA)
The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 1994, imposing quotas on the amount developing countries could export to developed countries.
Rapid Financing Instrument (RFI)
The Rapid Financing Instrument (RFI) provides rapid financial assistance, which is available to all member countries facing an urgent balance of payments need arising from commodity price shocks, natural disasters, post-conflict situations and emergencies resulting from fragility. The RFI replaced the IMF's previous policy that covered Emergency Natural Disaster Assistance (ENDA) and Emergency Post-Conflict Assistance (EPCA).
trade surplus/deficit
The difference between the value of a country's exports and the value of its imports, where the value of exports is greater. • A trade surplus is also called a favorable balance of trade. The difference between the value of a country's exports and the value of its imports such that imports exceed exports. • An unfavorable balance of trade is also called a trade deficit
Foreign Trade Multiplier formula
The foreign trade multiplier is equal to the reciprocal of marginal propensity to save plus marginal propensity to import Kf= Foreign trade multiplier Kf = 1 /MPS + MPM Where, MPS = Δ S/ Δ Y and MPM = Δ M/ Δ Y
unemployement rate
UR(%) = (Persons unemployed / Labour force )*100 UR(%) = (Persons unemployed/Persons employed + persons unemployed)*100
World bank group comprises of?
World Bank Group comprises three more viz. International Finance Corporation (IFC-1956), Multilateral Investment Guarantee Agency (MIGA-1988), and International Centre for Settlement of Investment Disputes (ICSID1966).
Agreement on Textiles and Clothing (ATC)
a 1995-2004 World Trade Organization (WTO) trade agreement that replaced the Multifiber Arrangement (MFA)
parallel translation
a committee of translators, each of whom is fluent in at least two of the languages in which the questionnaire will be administered, discusses alternative versions of the questionnaire and makes modifications until consensus is reached.
make or buy decision
a decision concerning whether an item should be produced internally or purchased from an outside supplier
Copyright
a document granting exclusive right to publish and sell literary or musical or artistic work Copyright (or author's right) is a legal term used to describe the rights that creators have over their literary and artistic works. works commonly protected by copyright.
Common Market
a group of countries that acts as a single market, without trade barriers between member countries. No restrictions on Factors of Production like labor, technology, and capital. No restriction on immigration etc. Higher level of integration than customs union. Eg: GCC
World Trade Organization (WTO)
a permanent global institution to promote international trade and to settle international trade disputes. The goal is to help producers of goods and services, exporters, and importers conduct their business. It replaced the General Agreement on Tariffs and Trade(GATT) 1947. It is a forum for governments to negotiate trade agreements. • It is a place for them to settle trade disputes. • It operates a system of trade rules. • Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other. The World Trade Organization deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Ad Valorem Tariff
a tariff levied as a proportion of the value of an imported good A fixed percentage of the value. for eg property tax on houses.
revenue tariff
a tax on imports for the purpose of raising money
Capital Inflow/Outflow
Capital Inflow: loan borrowed, selling of assets or foreign securities, FDI inflows etc . Capital Outflow: repayment, buying of foreign securities or assets, FDI outflows, etc.
First Pillar: Market access
Developed countries to reduce import tariffs by 36% (across the board) over a six year period with a minimum 15% tariff reduction for any one product. • Developing countries to reduce import tariffs by 24% (across the board) over a ten year period with a minimum 10% tariff reduction for any one product. • Least developed countries (LDCs) were exempt from tariff reductions, but they either had to convert non-tariff barriers to tariffs, creating a ceiling that could not be increased in future.
Standardization
Developing same product for multiple countries • Premise: consumers share some common values, beliefs, and consumption patterns. • Advantages: Economies of scale and scope, Price competitiveness, Uniform Image. Examples: Sony TV, levi's jeans
International segmentation
Identifying countries and/or consumers that are similar with regard to key traits, such as product-related needs and wants, that would respond to a product and related marketing mix.
industrial design
Industrial design is generally understood to refer to the ornamental or aesthetic aspect of an article rather than its technical features. • An industrial design may consist of three dimensional features, such as the shape of an article, or two dimensional features, such as patterns, lines or color.
intellectual property
Intellectual property refers to creative ideas, expertise, or intangible insights that grant its owner a competitive advantage.
intellectual property rights
Intellectual property rights refer to the right to control and derive the benefits from writing (copyrights), inventions (patents), processes (trade secrets), and identifiers(trademarks).
Mixed Economy
It combines elements of the market and command economic system, whereby both the government and private enterprise influence production, consumption, investment and saving. * Market + Command = Mixed
Size of Multiplier
It depends on the Marginal propensity to save or consume(MPS or MPC) if MPC is larger, multiplier is larger if MPS is larger multiplier is smaller.
Duty Drawback Scheme
It enables exporter to obtain a refund of custom duty and excise duty that are chargeable on imported material used in the manufacturing of exported goods by showing a proof of exports of these goods to the concerned authorities. It is done for improving competitiveness of exports. For example:- Gold is imported and duty is paid. It is converted into jewel and exported at a higher value and the import duty is refunded. The duty paid at the time of import is refunded which is called duty drawback
Mercantilism
It is a trade theory holding that a country's wealth is measured by its holding of "treasure" which usually means it's gold(1500-1800). Countries should export more than they import (favorable balance of trade) and, if successful, receive gold from countries that run deficit.
Leontief Paradox
Leontief reached a paradoxical conclusion that the US—the most capital abundant country in the world by any criterion— exported labor-intensive commodities and imported capital- intensive commodities. The empirical finding that, in contrast to the predictions of the Heckscher-Ohlin theory, US exports are less capital intensive than US imports.
Leontief Paradox- Aim:
Leontief's objectives were: • to prove that the H-O Model was correct • to show that the U.S. exports were capital intensive
Low-context and high context cultures
Low-context cultures rely on having explicit and complete information; high-context cultures provide little overt information but rather expect members to gather information from context.
Freer/More open
Lowering trade barriers is one of the most obvious ways of encouraging trade; these barriers include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively.
Free Trade Area
Lowest level of integration. All barriers to the trade of goods and services among member countries are removed but members determine their own trade policies with regard to non-member countries.
PESTEL Analysis
Political Economic Social Technological Environmental Legal An important and widely used tool that helps present the big picture of a firm's external environment in political, economic, sociocultural, technological, environmental, and legal contexts, particularly as related to foreign markets; analyzes for market growth or decline and, therefore, the position, potential, and direction for a business
Predatory pricing
Predatory pricing is the use of price as a competitive weapon to drive weaker competitors out of a national market. Once the competitors have left the market, the firm can raise prices and enjoy high profits. selling a product below cost to drive competitors out of the market
Productivity
Productivity measures the efficiency with which goods and services are produced. In terms of labor, it is the quantity produced per person per labor hour. It is a ratio of gross domestic product (GDP) to hours worked
Polycentrism
business units abroad should act like local companies
Economic Freedom Index
define as the " the absence of government coercion or constraint on the production, distribution, or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself. - higher the degree of economic freedom, the stronger the performance of economy
National Treatment
equal treatment for imported and local goods in a domestic market
functional equivalence
examines whether a given concept or behavior serves the same role or function in different countries, e.g., bicycles. your intervention must match the function of the behavior
patent
exclusive rights over an invention. Two kinds: 1.Product Patent 2.Process Patent
Berne Convention
international treaty that protects copyrights
transfer pricing
prices charged in sales between an organization's units
Individualism/Collectivism
primacy of the rights and role of the individual (United States) primacy of the rights and role of the community (Japan)
IMF Quota
the share of money that each country provides to the International Monetary Fund for lending, which determines its voting power. Quotas are the building blocks of the IMF's financial and governance structure. An individual member country's quota broadly reflects its relative position in the world economy. Quotas are denominated in Special Drawing Rights (SDRs), the IMF's unit of account.
polychronic cultures
time is used to accomplish many different things at once
Import procedure
1. File bill of entry with business identification number. 2.Determine rate of duty for clearance from warehouse. 3. File requisite documents from custom department 4. Submit the import report. 5. Receive permission to import goods
GATTS obligations:
(a) General obligations • Most Favored Nation treatment • Transparency (b) Specific Commitments • Market Access • National Treatment
IMF (International Monetary Fund)
(grants the short term loans to develop the cyclical disturbance in economy.) promote international monetary co-operative.
Dynamic effects of integration
- Ability of companies to achieve economies of scale - Due to more competition, increase in efficiency -Dynamic effects are the overall growth in the market
Second Stage of PLC, growth, is characterized by:
- increase in export by the innovative country - more competition - increased capital intensity - some foreign production
long term vs short term orientation
-Countries with a long-term orientation tend to be pragmatic, modest, and more cautious and encourage thrift and efforts in modern education as a way to prepare for the future. (for example: China, Japan) - In short-term oriented countries, people tend to place more emphasis on principles, consistency and truth, and are typically religious and nationalistic. (example: Pakistan, Nigeria, Philippines) (normative)
types of copyright
-economic rights, which allow the rights owner to derive financial reward from the use of their works by others; and - moral rights, which protect the non-economic interests of the author. • protected for a minimum period of 50 years after the death of the author.
First stage of PLC, introduction ,is characterized by
-innovation in response to observed need -exporting by the innovating country -evolving product characteristics
Financial Account and its subsections(Capital account)
1. Domestic ownership of foreign assets: Subtracts from financial account as money is flowing out of the country. 2. Foreign ownership of domestic assets: Adds to the financial account as money is flowing into the country.
Import Export Business Plan
1. Executive Summary 2. Company Description 3. Market Research 4. Marketing Decisions 5. Legal Decisions 6. Manufacturing and operations 7. Personal strategies 8. Financial decisions 9. Implementation Schedule
Totalitarianism Types
1. Authoritarianism: Does not tolerate deviation from the state ideology 2. Fascism: Control of people's mind and soul as well as their daily lives for eg Hitler. 3. Secular totalitarianism - It grants individual freedoms only so long as ensuring activities threaten neither social stability nor political power. For eg China 4. Theocratic totalitarianism: Religious groups are the leaders. For eg: Vatican city.
Why do we need to import?
1. Can buy at lower prices from foreign suppliers. 2. High quality products 3. The goods required for production may not be available in our country.
The trade policies are formulated by _______ and they are regulated by ___________.
1. Commerce ministry of India. 2. Foreign trade development and regulation act.
Types of Legal Systems
1. Common Law: based on traditions, precedent and customs. Common law originated from England and it is followed in most of the former British colonies. 2. Civil Law: based on detailed set of laws organized in to codes and have less flexibility than common law 3. Theocratic Law: Theocratic law is the legal system based on religious doctrine, precepts, and beliefs. 4. Mixed law
BArriers to global communication
1. Cultural barriers: message in one country means something else in other country. 2. Source and country effect: This plays a negative role when the target country's population does not favor outside goods. It can also have a positive effect like the french wine and italian clothes. 3. Noise levels: When there are too many companies competing with each other.
four major economic reforms under new economic policy of India since 1991.
1. De-Reservation of Industries of the Public Sector 2. Liberalisation:- Abolition of Industrial Licensing System 3. Privatisation of Public Sector Enterprise 4. Globalisation
Privatization can be of three prominent types
1. Delegation: Government keeps hold of responsibility and private enterprise handles fully or partly the delivery of product and services. 2. Divestment: Government surrenders the responsibility, i.e. transfer of public sector enterprise to private sector. 3. Displacement: The private enterprise expands and gradually displaces the government entity.
Steps to start an export import business.
1. Have a business Setup, open a sole proprietorship in the initial stage by taking a service tax registration/vat registration. 2. Obtain a PAN card for the business. 3. Open a current account with any of the commercial banks. 4. Get the Import Export Code (IEC ) issued, this can be done on the DGFT website. 5. Membership of Export Promotion council (EPG) or Commodity board(CB) should be obtained. 6. one needs to obtain a registration cum membership certificate(RCMC) granted by the concerned export promotion councils.
Objectives of REI
1. Increase cross border trade 2. Raise standard of living 3. To ensure security of smaller countries by forming ROC with larger countries.
Causes of dis-equilibrium in BOP
1. Inflation: As cost of production increases and decreases exports. 2. Exchange fluctuation 3. population growth: Uncontrolled growth of population leads to fall in aggregate demand(C+I+GE+NX) 4. Demand reduction 5. Cost of Public relations function 6. Social Factors 7. Political aspects
Non tariff barriers :examples
1. Intellectual property laws 2. Technical barriers 3. Preferential state procurement policies 4. Domestic subsidies 5. Financial protectionism 6. hidden protectionism 7. managed exchange rates
Approaches to exports and imports
1. Laissez-faire approach 2. Interventionist approach
Approaches to environmental analysis
1. Macro(outside-in): long-term perspective, develops alternative scenarios for the future. 2.Micro(inside-out): Short-term perspective, immediate future is analysed using current ongoing scenarios.
Interventionist approach theories
1. Mercantilism 2. neo-mercantilism
External factors affecting business
1. Physical factors like climate, geography etc 2. Competitive factors like company's supplier, rival companies etc.
Stages of Export
1. Pre-engagement stage: Currently only in the domestic market, companies planning on exporting. 2. Initial exporting: Sporadic exporting, still new, unable to cope with exporting demands. 3. Advanced: Big companies who are already well established exporters
Key Documents
1. Pro forma Invoice 2. Commercial Invoice 3. Bill of lading 4. Consular invoice 5. Certificate of Origin 6.Shipper's export 7. Export packing list
Marketing Orientation
1. Production: The more you produce, the better. 2. Sales: Product is same, market is different. 3. Customer: Depends the needs and wants of the customer, localizing the product if required (Netflix). 4. Social marketing: Consideration of environmental, health and other issues.
Importance of International marketing
1. Saturation of Domestic market 2. Unfavorable economy of domestic market 3. Emerging markets 4. Global Competition 5. Digital revolution
Effects of REI
1. Static effects 2. Dynamic effects
Import quotas are:
1. Tariff/Customs Quota: Certain specified quantity of imports is allowed at duty free or at a reduced rate of import duty. Additional imports beyond the specified quantity are permitted only at increased rate of duty. A tariff quota combines the features of a tariff and an import quota. 2. Unilateral Quota: The total import quantity is fixed without prior consultations with the exporting countries. 3. Bilateral Quota: In this case, quotas are fixed after negotiations between the quota fixing importing country and the exporting country. 4. Multilateral Quota: A group of countries can come together and fix quotas for exports as well as imports for each country
Modes of entry into International business
1. Trade related - exporting ( direct and indirect ), piggy-backing, countertrade 2. Contractual - franchising, turn key projects, management contracts, licensing, contract manufacturing, strategic alliance
Types of Economy
1. Traditional Economy 2. Command/Planned Economy 3. Market Economy (Capitalism) 4.Mixed Economy
Totalitarianism
A political system in which the government has total control over the lives of individual citizens. In a totalitarian system, a single agent- whether an individual or group or party-- monopolizes political power and try to mobilize the population
Commercial Invoice
A commercial invoice is a bill for the goods from the buyer to the seller. It contains a description of the goods, the address of buyer and seller, and delivery and payment terms. Many government use this form to assess duties.
Consular invoice
A consular invoice is sometimes required by countries as a means of monitoring imports. Government can use the consular invoice to monitor prices of imports and to generate revenue for the embassies that issue the consular invoice.
Non discrimatory
A country should not discriminate between its trading partners(MFN) and it should not discriminate between its own and foreign products, services or nationals(National treatment policy). The only exceptions are developing countries, regional trade areas, and customs unions.
Neomercantilism
A country that practices neomercantilism attempt to run an export surplus to achieve a social or political objective.
The meaning of a deficit and a surplus on the capital account.
A deficit in the capital account means that money is flowing out of the country indicating that the nation is increasing its ownership in foreign assets and vice-versa in case of a surplus.
Specific Duty
A fixed sum tariff levied on a physical unit of an imported good. The unit can be different for different goods.
Tariff
A government tax on imports or exports There are two types of Tariffs: 1. Unit tariff: Tariff consists of a fixed amount per unit traded. 2. Value tariff: Tariff changes proportionately with the value of the traded goods.
Customs Union
A group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy.
Market Economy (Capitalism)
A market economy encourages open exchange of goods and services between producers and consumers and in which individuals, rather than government, make the majority of economic decisions.
Gross Domestic Product (GDP)
A measurement of the total goods and services produced within a country.
Voluntary Export Restraint (VER)
A restriction set by a government on the quantity of goods that can be exported out of a country during a specified period of time
Shipper's export
A shipper's export declaration is used by the exporter's government to monitor exports and to compile trade statistics.
What is Free trade ?
A situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country
GINI Index/Coefficient
A statistical formula that measures the amount of inequality in a society; its scale ranges from 0 to 100, where 0 corresponds to perfect equality and 100 to perfect inequality
Trademarks
A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.
unilateral transfers
A unilateral transfer is a one-way transfer of money, goods or services from one country to another. e.g. International aids, grants, donations, gifts, remittances etc.
The major aspects of liberalization in India
Abolition of licensing Liberalization of Foreign Investment Relaxation of Locational Restrictions Liberalization of Foreign Technology imports Phased Manufacturing Programmes Public Sector Reforms MRTP Act
Theory of Comparative Advantage
According to David Ricardo's theory of comparative advantage, it makes sense for a country to specialize in the production of those goods that it produces most efficiently and to buy the goods that it produces less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself. Alternative Definition: A theory which states that countries benefit from specializing in (and exporting) goods and services in which they have a relative advantage, and they benefit from importing goods and services in which they have a relative disadvantage
Theory of absolute advantage- short note.
Adam Smith argued that a country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it. Countries should specialize in the production of goods for which they have an absolute advantage and then trade these goods for the goods produced by other countries Countries' advantages can be natural or acquired. This theory supports positive sum gain.
Command Economy (Communism)
An economic system in which the government controls a country's economy. Basically Communism.
Economic systems
An economic system is a set of structures and processes that guide the allocation of resources and shapes the conduct of business activities in a country.
Political Union
All features of EU+ common government. An ideal state.
Second Pillar: Domestic support
All forms of domestic support are subject to rules. The WTO classifies domestic subsidies into three categories known as the Amber, Blue and Green Boxes . Only the Amber Box is subject to reduction commitments.
Exchange rate systems
Also known as currency system , establishes the way in which the exchange rate is determined, i.e., the value of the domestic currency with respect to other currencies. Exchange rate systems can be classified according to the degree to which the rates are controlled by the government: fixed, pegged, freely/pure floating, managed float.
Amber Box
Amber means slow(be reduced) (All domestic subsidies that are considered to distort production and trade. E.g. Market price support) - One more box Blue means subsidies that are tied to programs that limit production (Amber box with conditions)
bill of entry
An account of goods entered at a customhouse, of imports and exports, detailing the merchant, quantity of goods, their type, and place of origin or destination.
non-tariff barriers
Barriers to trade that discourage imports in non-tax ways, such as quotas and government import restrictions.
Freedom in the World Index
Annual evaluation by Freedom Home of the state of freedom in countries around the world, measured according to political rights and civil liberties. India got 75/100 points
General agreement on trade in services (GATT)
Basic Purpose: As stated in its Preamble, the GATS is intended to contribute to trade expansion "under conditions of transparency and progressive liberalization and as a means of promoting the economic growth of all trading partners and the development of developing countries".
balance of payments
Balance of Payment (BOP) is a statement which records all the monetary transactions made between residents of a country and the rest of the world in a particular period of time. It is the accounting of all the financial inflows and outflows of a nation. BOP is similar to the double entry system of accounting means all the transaction will have debit entry with corresponding to credit entry.
is BOP always balanced
Balance of trade may or may not be balanced but BOP is always balanced.
Ethnocentrism
Belief in the superiority of one's nation or ethnic group.
How to improve GNI?
By adjusting it with number of people, growth rate and cost of living. Rate of Change: Generally we say, GNI indicates economic potential if GNI is growing at a rate higher than the population.(i.e standard of living is rising) Purchasing power parity: When GNI is adjusted wrt to the country's local purchasing power parity(cost of living in simple words ig?)
Economic Union (EU)
CM + common economic policies and institutions+ common currency
CURRENT ACCOUNT
CURRENT ACCOUNT = BALANCE OF TRADE IN GOODS AND SERVICES + NET FACTOR RECEIPTS + UNILATERAL TRANSFER Current account surplus -> assets have grown Current account deficit -> liabilities have grown
Employment Multiplier
Change in total employment per additional export job The employment multiplier is the ratio of increase in total employment to the increase in primary or original employment . Employment Multiplier can be expressed by an equation as follows. K1=N2/N1 (Here k1=employment multiplier; N2= Total employment; N1= Primary employment.)
closed economy equation
Closed economy is when the total expenditure of a country is equal to private expenditure +govt expenditure. Y=C+I+G C=consumption expenditure I=investment expenditure G=government expenditure.
Commercial policy/International trade policy
Commercial policy is an umbrella term that describes the regulations and policies that dictate how companies and individuals in one country conduct commerce with companies and individuals in another country. It is also referred to as trade policy or international trade policy. In simple terms it can be understood as the government's policy related to the international trade. It can be either free trade or protectionist policy
Construct equivalence
Construct equivalence deals with the question of whether the marketing constructs have the same meaning and significance in different countries. - Construct equivalence is comprised of conceptual equivalence, functional equivalence, and category equivalence.
Four ways for trade in services according to GATT
Cross-border supply: is defined to cover services flows from the territory of one Member into the territory of another Member (e.g. banking or architectural services transmitted via telecommunications or mail); • Consumption abroad: refers to situations where a service consumer (e.g. tourist or patient) moves into another Member's territory to obtain a service; • Commercial presence: implies that a service supplier of one Member establishes a territorial presence, including through ownership or lease of premises, in another Member's territory to provide a service (e.g. domestic subsidiaries of foreign insurance companies or hotel chains); and • Presence of natural persons: consists of persons of one Member entering the territory of another Member to supply a service (e.g. accountants, doctors or teachers)
Culture and the Nation-State
Cultures consist of people who share attitudes, values and beliefs. Cultures are dynamic; they evolve over time. The nation is a useful definition of society because similarity among people is a cause and an effect of national boundaries. Laws apply primarily along national lines. Language and values are shared within borders. Rites and symbols are shared along national lines.
Basis for Micro Segmentation
Demographic, psychographic, hostede's cultural dimensions, global segments etc.
The export import(EXIM) policy/foreign trade policy is governed and managed by a specific govt department known as __________.
Directorate General of Foreign trade(DGFT)
More Competitive
Discouraging 'unfair' practices, such as export subsidies and dumping products at below cost to gain market share and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade.
Drawback
Drawback is the refund of certain duties, taxes, and certain fees collected upon the importation of merchandise.
united nations conference on trade and development UNCTAD
Functions Definitions on page 922 Thus, UNCTAD organization acts like a bridge between the developing and developed countries to increase their economy of the country .
FDI
FDI refers to long-term capital investment such as the purchase or construction of machinery, buildings, manufacturing plants, etc.
FPI, other investments
FPI refers to short-term capital investing in the financial assets of a foreign country such as stocks, bonds or other financial assets. Other investments include bank deposits, currency investment, etc.
Red box
Forbidden
Predictable and Transparent
Foreign companies and govts should make sure that the trade barriers shouldn't change suddenly. Investments with stability and predictability are encouraged, job opportunities are created and consumers can take full advantage of competition - choice and low prices
Financial account consists of
Foreign direct investments+ Foreign portfolio investments+ other investments.
Global Sourcing
Global sourcing refers to buying the raw materials or components that go into a company's products from around the world, not just from the headquarters' country. For example, Starbucks buys its coffee from locations like Colombia and Guatemala. • The advantages of global sourcing are quality and lower cost.
types of sourcing strategies
Global sourcing, sole sourcing, multi sourcing
Net Factor Receipts
Income received or paid in from dividends, interest, wages, etc. If money is going in or out from the country called Credit or Debit side entry in Balance of Payment Account.
Green Box
Green means permitted (Subsidies that are deemed not to distort trade, or atleast cause minimum distortion and are not subject to WTO reduction commitments )
Gross National Product (GNP)
Gross National Product is the market value of all final goods and services produced in a year. GNP includes net factor income from abroad.
Masculine-feminine indexAAsritha
High masculine nations: live to work high feminine nations value work life balance and quality of life
IBRB
IBRD: The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries. IBRD is the original World Bank institution. It works closely with the rest of the World Bank Group to help developing countries reduce poverty, promote economic growth, and build prosperity
IFA
IFC: The International Finance Corporation (IFC) is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments
Import broker
Import broker is also known as custom broker. • An import broker is a certified specialist who obtains required government permissions and other clearances before forwarding the necessary documents to the carrier(s) of the goods.
Errors and Omissions
in the balance of payments, an item that is included to account for possible omissions and error in items that have been included or excluded, in order to ensure that the balance of payments balances.
fixed exchange rate system
In a fixed exchange rate system, exchange rates are either held constant or allowed to fluctuate only within very narrow boundaries. • Devaluation refers to a downward adjustment of the exchange rate by the central bank. • Revaluation refers to an upward adjustment of the exchange rate by the central bank.
Multilateralism
In international business, multilateralism refers to an alliance of multiple countries pursuing a common goal.
Transparency
In order to guarantee transparency, governments must publish all relevant laws and regulations.
Protective Tariff
In order to protect domestic industries from stiff competition of imported goods, protective tariff is levied on imports. Normally, a very high duty is imposed leads to either discourage imports or to make the imports more expensive as that of domestic products. a tax on imported goods that is intended to protect a nation's businesses from foreign competition
voluntary import expansion
It is an agreement to increase the quantity of imports of a product over a specified period of time.
Subsidies
It is an amount of money given to the producer either as a lump sum or per unit payment. It is used to decrease imports or increase exports. Govt can decide which industries it wants to subsidize.
The Agreement on Agriculture (AoA)
It is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995. • The Agreement on Agriculture constitutes of three pillars— - domestic support, - market access, and - export subsidies
Flexible Credit Line
It is for countries with very strong fundamentals, policies, and track records of policy implementation. It has no ongoing conditions and no caps on the size of the credit line.
countervailing duties
It is imposed on certain imports where products are subsidized by exporting governments. additional import taxes levied on imports that have benefited from export subsidies
Marginal propensity to import (MPM)
It is the increase in imports per unit change in increase of disposable income. Disposable income: it is the income available to spend or save after the income taxes. Formula: MPM=ΔI/ΔY - Where, ΔI= Change in import; ΔY= Change in income
National Income
It is the sum of the wages, rent, interest and profits paid to factors for their contribution to the production of goods and services in a year. total income earned by everyone in the economy
Marginal propensity to save(MPS)
It refers to the increase in proportion of saving as a result of increase in the level of income. Always lies between 0 and 1 Formula: Symbolically, MPS=ΔS/ΔY - Where, ΔS= Change in saving; ΔY= Change in income
MIGA
MIGA: The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people's lives. MIGA fulfills this mandate by offering political risk insurance and credit enhancement products to investors and lenders
Role of IMF: Economic Surveillance
Maintain stability and prevent crisis in the international monetary system.
current account
in the balance of payments, records transactions involving the export or import of goods and services.
Market segmentation
Market Segmentation refers to identifying distinct groups of consumers whose purchasing behavior differs from others in important ways Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
market access
Market access is a negotiated commitment in specified sectors. It may be made subject to various types of limitations that are enumerated in Article XVI(2).
Masculinity vs. Femininity
Masculinity and femininity revolve around the emotional role distribution between genders. In masculine societies, gender roles overlap is less. Qualities are demonstrating success, being strong and fast. In feminine societies gender roles overlap is more. The qualities are caring ,modesty and quality of life.
scalar equivalence
Means that two respondents in different countries with the same value for a given variable receive equivalent scores on the same survey item
Degree of Human Development
Measure of quality of life
what is National competitive advantage or Porter's Diamond
Michael Porter theorizes that four broad attributes of a nation shape the environment in which local firms compete, and these attributes promote or impede the creation of competitive advantage Determinants of National Competitive Advantage -Factor Endowments -Demand conditions -Related and supporting industries -Firm Strategy, Structure and Rivalry
MRTP Act
Monopolies and Restrictive Trade Practises Act Regulations relating to concentration of economic power, pre-entry restrictions for setting up new enterprises, expansion of existing businesses, mergers and acquisitions have been abolished.
Principles of GATT/WTO
Multilateral trading should be: 1. Non discriminatory 2. Freer 3.Predicatable and transparent 4.Protecting against unfair trade 5.Development of all countries.
Formula of Multiplier effect?
Multiplier = Change in Income/Change in Initial Investment
Popular Regional economic integrations
NAFTA (North American Free Trade Agreement), EU (European Union), APEC (Asian Pacific Economic Cooperation), South Asian Association for Regional Cooperation (SAARC), Association of South East Asian Nations (ASEAN)
Bretten Woods System
Negotiated in 1944 July in Bretton Woods to establish a new international monetary system for creating an efficient foreign exchange system, preventing competitive devaluations of currencies, and promoting international economic growth.44 nations participated. It was decided that the US dollar would be pegged to the value of gold and the rest of the currencies would be pegged to the US dollar. This came to an end in the early 1970s
Net National Product
Net National Product at market price is the market value of all final goods and services after providing for depreciation.
Paris Convention of 1883
Paris Convention for the Protection of Industrial Property: The Paris Convention, adopted in 1883, applies to industrial property in the widest sense, including patents, trademarks, industrial designs, utility models, service marks, trade names, geographical indications and the repression of unfair competition.
unemployment rate
People who don't have a job but are currently looking for one.
Operational equivalence
Operational equivalence concerns how theoretical constructs are operationalized to make measurements, e.g., leisure.
Foreign Trade Multiplier
Ratio of change in income to change in exports or investment. - Foreign Trade Multiplier is the amount by which the national income of a country will be raised, by a unit increase in domestic investment on exports. - It is also known as the export multiplier.
Regional Economic integrations
Regional Economic Integration refers to agreement between groups of countries in geographical region, to reduce and remove tariff and non tariff barriers to the free flow of goods, services and factors of production between each other countries.
Regionalism
Regionalism is the expression of a common sense of identity and purpose combined with the creation and implementation of institutions that express a particular identity and shape collective action within a geographical region.
World Bank
Role: To provide Financial assistance, advice and research to developing countries.
Geographical indications
Signs used on goods that have a specific geographical origin and possess qualities, a reputation or characteristics that are essentially attributable to that place of origin (most commonly a name of the place or origin of the goods). Examples: Swiss Watches, Egyptian cotton etc
Hostede's Dimensions of Culture
Small Power distance vs big power distance Individualism vs collectivism Masculinity vs femininity High uncertainty avoidance vs low uncertainty avoidance long term orientation vs short term orientation indulgence vs restraint
idealism vs pragmatism
Some cultures prefer to establish overall principles before they try to resolve small issues- an approach labelled as idealism. Cultures in which people focus more on details that on abstract principles are said to be - pragmatism
Static effects of economic integration
Static effect are the shifting of resources from inefficient to efficient companies as trade barriers fall. Static effects apply primarily to trade barriers themselves: For member countries, they go down and for non-member countries, they go up. includes the trade-creation effect and the trade-diversion effect
Supply Chain Management (SCM)
Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products.
Inflation
Sustained rise in prices measured against a standard level of purchasing power. It results when aggregate demand grow faster than aggregate supply. A general increase in prices and fall in the purchasing value of money.
Appellate Body
The Appellate Body consists of 7 individuals that hear the appeals of reports brought to the DSU. The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel.
Competition Act 2002
The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969.
Stand-By Arrangement (SBA):
The SBA framework allows the Fund to respond quickly to countries' external financing needs, and to support policies designed to help them emerge from crisis and restore sustainable growth. All member countries facing external financing needs are eligible for SBAs subject to IMF policies. The country repays the money it has borrowed over 3¼ to 5 years.
Special Drawing Right (SDR)
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. A world currency created by the International Monetary Fund (IMF) to replace gold as a world standard. Valued by a "basket" of national currencies, the SDR has been called "paper gold." The currencies included are US dollar, British Pound, Japanese Yen,chinese yuan, the euro. 1 Special Drawing Rights equals to 98.16 Indian Rupee.
The Trade Integration Mechanism
The Trade Integration Mechanism allows the IMF to provide loans under one of its facilities to a developing country whose balance of payments is suffering because of multilateral trade liberalization. When the country loses preferential statuses.
Protect the environment:
The WTO's agreements permit members to take measures to protect not only the environment but also public health, animal health and plant health.
Business cycle
The business cycle is the natural rise and fall of economic growth that occurs over time. The business cycle is the natural fluctuation of the economy between periods of expansion (growth) and contraction (recession).
capital account
The capital account records all international purchases and sales of assets such as money, stocks, bonds, etc. We note that any transaction resulting in a payment to foreigners is entered as a debit and is given a negative sign. Any transaction resulting in a receipt from foreigners is entered as a credit and is given a positive sign.
pegged exchange rate system
The currency's value is pegged to a foreign currency or to some unit of account, and thus moves in line with that currency or unit against other currencies. Some governments peg their currency's value to that of a stable currency, such as the dollar, because that forces the value of their currency to be stable. exists when a country fixes the value of its currency relative to a reference currency
BOP components
The current account, capital account, official reserve account and net omissions and errors. BOP=current account balance+capital acc balance+ reserve acc balance+ errors.
Components of an Economy
inflation, income distribution, debt, unemployment, poverty, labor costs, productivity, balance of payments.
Product Life Cycle Theory of Trade (PLC Theory)
The international product life cycle theory (Raymond Vernon) of trade state that the location of production of certain kinds of products shifts as they go through their life cycles which consists of four stages: introduction, growth, maturity, and decline
International Marketing
The performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.
back translation
The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.
Marginal Propensity to Consume (MPC)
The ratio of change in consumption over change in income. It lies between 0 and 1 assuming the amount consumed cannot be more than the income. Formula: MPC=∆C/∆Y When entire income is consumed MPC is 1 and MPS is 0.
Political Risk
The risk that political decisions, events or conditions in a country negatively affect the profitability or sustainability of an investment. Risk associated with political changes that may negatively impact domestic and foreign firms.
conceptual equivalence
The similarity of linguistic terms and meanings across cultures.
Misery Index
The sum of the unemployment and inflation rates.
Heckscher-Ohlin Theory
The theory is that a country will export goods that make intensive use of the factors of production in which it is well endowed. Thus, a labor-rich country will export goods that make intensive use of labor. And a capital-intensive company will export those goods which make use of capital. For eg: Bangladesh exports labor-intense goods like woolen wear,knitwear etc whereas the USA exports aircrafts,iron,steel, machinery etc.
Debt
The total of government's financial obligations. Types: Internal debt and external debt.
What are the two theories supporting free trade?
Theory of absolute advantage and theory of comparative advantage. Both theories are based on specialization.
Trade Pattern Theories
Theory of country size(how much does a country trade), factor proportions theory(what does the country trade), country similarity theory(with whom does the country trade).
Trade in goods
These are movable and physical in nature and "trade in goods" means a change of ownership from resident (of the local country) to non-resident (in a foreign country) and vice versa. An export is marked as a credit (money coming in) and an import is noted as a debit (money going out).
Sliding scale duties
These tariffs change with the prices of the product. The tax can either be specific or ad valo
Trade in services(invisible balance)
These transactions includes an intangible action such as transportation, business services, insurance, tourism, royalties and licensing. If money is being paid for a service, it is recorded as an import (a debit). If money is received, it is recorded as an export (credit).
Combined or compound duty
This describes the total tax rate where specific rate and ad valorem duties are both charged.
Power Distance Index
This dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally. The fundamental issue here is how a society handles inequalities among people. In countries with High PDI, there is a hierarchical order and people do not ask for any justification. For eg: Malaysia In countries with Low PDI, people strive for equal power distribution and demand justice for inequalities.
Export Manufacturing under bond scheme
This facility entitles firms to produce goods without payment of excise and other duties. The firms desirous of availing such facility have to give an undertaking (i.e., bond) that they are manufacturing goods for export purposes.
TRIPs TRIMs AOA
Trade Related Intellectual Property Rights Trade Related Investment Measures Agreement On Agriculture
Trade Creation Effect
Trade creation occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area. It may also occur when higher-cost external producers are replaced by lower-cost external producers within the free trade area. more goods are produced and traded that have been produced at lower costs.
Export Promotion
Trade promotion is also sometimes known as export promotion. "The export promotion is basically promoting, supporting and assisting firms in entering international markets and achieving optimum opportunities from their international business activities and thereby encouraging exports in India".
Trade Promotion
Trade promotion is an umbrella term for economic policies, development interventions and private initiatives aimed at improving the trade performance of the country or a region within a country, or a group of countries involved in an economic trade area (NAFTA, SAFTA, ASEAN, EU, etc).
most favored nation
Trade status granting a nation the same trading privileges as other nations.
Types of Intellectual Property
Trademarks Copyrights Patents Trade Secrets
transition economies
Transition economies are involved in a process of moving from a centrally planned economy to a mixed or free market economy. a subset of emerging markets that evolved from centrally planned economies into liberalized markets
Uncertainty Avoidance Index (UAI)
Uncertainty avoidance (UAI) is the extent to which the members belonging to society are capable of coping with future uncertainty without going through stress. Strong UAI: people try to make life as controllable as possible, maintain rigid codes of behavior and beliefs. eg: greece, uruguay etc. Weak UAI: people in these countries are more relaxed, open and inclusive. eg: Denmark, Singapore.
sourcing configurations
Vertical integration, industrial clusters
TRIMS (Trade Related Investment Measures)
WTO agreement imposed on foreign firms so they don't hurt trade in goods/services
When will Free trade agreement benefit the world
When Trade creation is more than trade diversion.
Extended Fund Facility (EFF):
When a country faces serious medium-term balance of payments problems because of structural weaknesses that require time to address, the IMF can assist with the adjustment process under an Extended Fund Facility (EFF). Compared to assistance provided under the Stand-by Arrangement, assistance under an extended arrangement features longer program engagement—to help countries implement medium-term structural reforms—and a longer repayment period (4 ½ to 10 years).
Anti-dumping Duty
When exporters attempt to capture foreign markets by selling goods at rock bottom prices, such practice is called dumping. - As a result of dumping, domestic industries find it difficult to compete with imported goods. - To offset dumping effects, duties are levied in addition to normal duties called Anti-dumping Duty.
Hyperinflation
When inflation rate exceeds 50% per month. Cause include heavy money spending and deficit spending.
trade diversion effect
a welfare loss resulting from the formation of a regional trade bloc; it occurs when imports from a low-cost supplier outside the trade bloc are replaced by purchases from a higher-cost supplier within the trade bloc.
Product adaption
adapting a product to meet local conditions or wants in foreign markets. Advantage: Improved fit between product and consumer, Expanded penetration. Example: McD veg burgers
Functions of WTO
administering WTO trade agreements, forum for trade negotiations, handling trade disputes, monitoring national trade policies, technical assistance and training for developing countries, cooperation with other international organizations
Abolition of licensing: New Industrial Policy, 1991 abolished licensing for most industries except for 6 industries of strategic significance.
alcohol, cigarettes, industrial explosives, defense products, drugs and pharmaceuticals, hazardous chemicals and certain others reserved for the public sector.
Embargo
an official ban on trade or other commercial activity with a particular country. An embargo is a government order that restricts commerce with a specified country or the exchange of specific goods
income distribution
how the nation's total income is distributed among its population
Poverty
it is condition in which a person or community is deprived of, or lack of essential for, a minimum standard of well being and life. - extreme poverty: less than $1.25 per day - moderate poverty: less than $2.00 per day
Item equivalence
items used must have the same meaning to each culture
Consumer Protection Act
laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace.
Dispute Settlement Body
means, provided by the World Trade Organization, for member countries to resolve trade disputes rather than engage in unilateral trade sanctions or a trade war.
monochronic cultures
people tend to do one thing at a time
Individualism vs collectivism
refer to the relationship between the individual and the larger society. A high IDV score indicates people do not take responsibility for the society and have weak interpersonal connections with family and friends. For eg USA, Canada. In a collectivist society, people tend to be loyal to the group they belong and this group will also defend their interests. They care about other's well being. For eg: Pakistan and Panama.
Geocentrism
requires companies to balance knowledge of their own organizational cultures with both home and host country needs, capabilities, and constraints
Dimensions of Economic Freedom Index
rule of law, limited government, regulatory efficiency, open markets. (Read about all 12 in pdf page 466)
Types of Political Risk
systemic, procedural, distributive, catastrophic
World Bank comprises of ?
the International Bank for Reconstruction and Development (IBRD1946) and the International Development Association (IDA-1960).
Indulgence vs. Restraint
the degree to which a society allows relatively free gratification of basic and natural human drives related to enjoying life and having fun or suppresses gratification of needs and regulates it by means of strict social norms.
balance of trade
the difference between a country's total exports and total imports
factor mobility theory
the movement of factors of production such as labor and capital from one location to another Factor mobility concerns the free movement of factors of production, such as labor and capital, across national borders
Price Descrimination
the practice of charging different prices to different buyers for goods of like grade and quality.
Tarrification
the process by which a country agrees to "convert" its quotas, import licenses, and other non-tariff barriers on specific items to tariffs.
Objectives of IMF
to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world
Push vs. Pull Strategy
• A push strategy emphasizes personal selling rather than mass media advertising in the promotional mix. Although effective as a promotional tool, personal selling requires intensive use of a sales force and is relatively costly. • A pull strategy depends more on mass media advertising to communicate the marketing message to potential consumers.
Business Approaches
• Ethnocentric: key positions filled by nationals of parent company • Polycentric: host country nationals recruited to manage subsidiary in their own country • Geocentric: best people recruited, whatever their nationality • Regiocentric: best people recruited within region in which the subsidiary operates (e.g. EU, USA)
Macro segmentation Indicators
• Gross domestic product (GDP) per capita • Industrial and agricultural sector statistics • Market size and potential • Consumer buying power • Investment figures (FDI, other trade statistics) and many more.
Global Logistics
• Materials management refers to the inflow of raw material, parts, and supplies through the firm. • Physical distribution refers to the movement of the firm's finished products to its customers, consisting of transportation, warehousing, inventory, customer service/order entry, and administration.
Global Firms Success Strategy
• Partnering with a local brand with a strong name as method of entry. • Adapting a meaningful, easily recognizable local name. • Hiring local leadership. • Launching a separate service based locally. • Giving local operations autonomy to build their own business model and operate independent of headquarters.
Five parts of the supply chain logistics
• The plan or strategy • The source (of raw materials or services) • Manufacturing (focused on productivity and efficiency) • Delivery and logistics • The return system (for defective or unwanted products)
