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