ch 1-5 Flashcards
(150 cards)
0
Q
Commercial risk
A
Result of poor execution
1
Q
Born global firm
A
Entrepreneurial firms that perform international business within 3 yrs of starting.
-Niche
2
Q
Country risk
A
Problems stem from the political, legal, and economic environment of a country
3
Q
Cross cultural risk
A
Cultural misunderstanding
- negotiation patterns- America is low context. Japan is high context.
- Canadians shoot from hip
4
Q
Currency risk
A
Adverse fluctuations in exchange rates
5
Q
Exporting
A
Selling abroad
6
Q
FDI
A
Investing abroad to accumulate technology land labor plant etc…
7
Q
Globalization of markets
A
Growing economic interdependency
8
Q
Importing/global sourcing
A
Purchasing from abroad
9
Q
International business
A
Trade across national borders
- value adding can be done abroad
- us leading in total merchandise trade
10
Q
International investment
A
Investment abroad
11
Q
International portfolio investment
A
Passive ownership of foreign stocks or bonds to make a return
12
Q
Multinational enterprise MNE
A
Large company with subsidiaries in multiple countries
13
Q
Small/medium enterprise SME
A
500 or fewer employees
Limited resources
- good at exporting licensing and franchising
14
Q
Contagion
A
The tendency for financial s in one country to spread to the other
15
Q
Value chain
A
Value adding activities
Market research-r&d-sourcing-production-distribution-after sales
16
Q
Globalization of markets
A
Reconstruction of value chains on a global scale
17
Q
WTO world trade organization
A
Multinational governing body for trade regulation
18
Q
Agent
A
Intermediary, handles orders for commodities. Doesn’t assume title of goods. Contracted for set time
19
Q
Customs brokers
A
Arrange customs imports for a hiring firm. Process documents. Freight forwarder from home country works with customs house broker in destination country.
20
Q
Four participants in international business
A
Focal firm- initiation of transaction, primarily MNE’s.
Distribution channel intermediary- logistics and marketing, independent distributors and reps. Based on contracts
Facilitator- firm with advice in logistics. Ex. Freight forwarder
Governments/public sector- Russia China Brazil growing
21
Q
EMC- EXPORT MGMNT COMPANY
A
Domestically based intermediary , acts as export agent.
22
Q
Foreign distributor
A
Distributes exporters products abroad. Ex independent wholesalers.
Stable committed market presence
23
Q
Entry strategies
A
Licensor- contract to use intellectual property
Franchisor- grant right to use entire business system for royalties
Turnkey contractor- firm that hand over business to foreign customer
Project based non equity venture- narrow scope, limited time
Joint venture partner- Joint ownership, Long term goals
Trading company- assumes marketing, imports and exports.
24
SWF- soverign wealth fund
State owned investment funds to generate income
| Ex. China swf invested in Europe to acquire debt ridden European firms
25
Phases of globalization
1. 1830-1880 - railroads - manufacturing- telephone
2. 1900-1930 electricity and steel - early MNES
3. 1948-1970 GAAT,WW2,- industrialization
4. 1980-now Internet and transportation - rise of SMES
26
Consequences of globalization
- contagion
- loss of national sovereignty (can't govern own affairs)
- outsourcing
- the poor, environment, and culture
27
How does the global economy move?
Peaks and valleys
| Bubbles and recessions
28
Tobin tax
Tax on all spot conversions from one currency to another
| James Tobin won Nobel prize
29
Political trilemma
- democracy
- national determination
- economic globalization
30
Economic freedom
10% freedom increase can raise gap per capita from 7.4- 13.6%
31
Gini coefficient
Measure degree of inequality
| - inequality on the rise
32
Mirror neurons
We can shape behavior because we are imitators
33
Centaurus culture
Unified global culture and individual domestic culture
34
Strategies
- lower price
- differentiated offer
- blue ocean creativity strategy- right brain
35
Who was the first American MNE
I .M. singer and co
36
Where are value chain activities performed?
In the country where it is most efficient
37
Value chain order
```
Market research➡️
R&d➡
️sourcing➡
️production➡
️marketing➡
️distribution➡
️after sales service➡️
```
38
4500 liters of water for One _______
Steak
39
Hollywood and American MNE's
Help create global culture
40
Adoption orders
- innovators
- early adopters
- early majority
- late majority
- laggards
41
Western (us, Japan, west europe) identical jobs can earn up to 4 times higher than the same jobs in ______________
- Eastern Europe
- Korea
- Brazil
42
Quasi globolization
Us promoted trade and provided aid during Cold War to keep nations on our side.
43
In which phase did the Soviet Union collapse and what was the result?
4 , increased globalization
44
Distribution channel intermediary
- physical distribution and marketing
- warrehousing & customer support
- important for exporters w/o foreign presence
- based either at home or abroad
45
Trading company
- based in home country
- high volume low margin
- many deal in commodities
46
Examples of facilitators
- banks
- trade lawyers
- freight forwarders
- brokers/agents
- consultants
- market researchers
- logistics service provider- DSL, FedEx
- customs brokers
47
The China price premise
USA can't compete with China based on price
48
Business model
Describes rationale of how a business creates delivers and captures value
49
How do developing economies often build projects?
Turnkey contractor
| -build-own-transfer
50
Greenfield investment
FDI where new facilities are made from ground up and create jobs in new country
51
Ethics
Moral principles or values regarding right and wrong
52
Corruption
Abuse of power for illegitimate gain
- over 30% of MNES view corruption as a severe concern
- grease payments expedite decisions and gain favors
53
Intellectual property rights
Intellectual property- ideas created by individuals. Ex. Inventions
- the legal claim through which assets are protected from unauthorized use
54
Which country has highest piracy levels?
China
55
Relativism
The belief that ethical truths are not absolute but differ from group to group. "When in Rome, do as the Romans do"
56
Normativism
Belief that ethical standards are universal, and firms and individuals should seek to uphold the consistently around the world
57
Who was the first American MNE
I .M. singer and co
58
Where are value chain activities performed?
In the country where it is most efficient
59
Value chain order
```
Market research➡️
R&d➡
️sourcing➡
️production➡
️marketing➡
️distribution➡
️after sales service➡️
```
60
4500 liters of water for One _______
Steak
61
Hollywood and American MNE's
Help create global culture
62
Adoption orders
- innovators
- early adopters
- early majority
- late majority
- laggards
63
Western (us, Japan, west europe) identical jobs can earn up to 4 times higher than the same jobs in ______________
- Eastern Europe
- Korea
- Brazil
64
Quasi globolization
Us promoted trade and provided aid during Cold War to keep nations on our side.
65
In which phase did the Soviet Union collapse and what was the result?
4 , increased globalization
66
Distribution channel intermediary
- physical distribution and marketing
- warrehousing & customer support
- important for exporters w/o foreign presence
- based either at home or abroad
67
Trading company
- based in home country
- high volume low margin
- many deal in commodities
68
Examples of facilitators
- banks
- trade lawyers
- freight forwarders
- brokers/agents
- consultants
- market researchers
- logistics service provider- DSL, FedEx
- customs brokers
69
The China price premise
USA can't compete with China based on price
70
Business model
Describes rationale of how a business creates delivers and captures value
71
How do developing economies often build projects?
Turnkey contractor
| -build-own-transfer
72
Greenfield investment
FDI where new facilities are made from ground up and create jobs in new country
73
Ethics
Moral principles or values regarding right and wrong
74
What kinds of goods are subject to importing?
Finished products and intermediary goods
75
Factors of production include all of the following except:
Gov regulations
Management talent
Capital
Gov regulations
76
What triggered the 3rd phase of globalization?
End of ww2
77
In which stage of globalization did MNE's arise?
2nd
78
For global industry, business is run with a
Reactive strategy
79
Regional economic blocks include which of the following?
Mercosur
Nafta
Wto
Wto (not between 2 nations)
80
All signaled the end of the cold wax except;
Collapse of Soviet Union
Berlin wall
China joining wto
China joining wto
81
4 types of hard currency (low risk)
Pound, usd, euro, yen
82
What role does a lawyer play I IB?
Facilitator
83
Dell makes computers in Malaysia, which value chain activity is it?
Sourcing
84
Corruption
Abuse of power for illegitimate gain
- over 30% of MNES view corruption as a severe concern
- grease payments expedite decisions and gain favors
85
Intellectual property rights
Intellectual property- ideas created by individuals. Ex. Inventions
- the legal claim through which assets are protected from unauthorized use
86
Which country has highest piracy levels?
China
87
Relativism
The belief that ethical truths are not absolute but differ from group to group. "When in Rome, do as the Romans do"
88
Normativism
Belief that ethical standards are universal, and firms and individuals should seek to uphold the consistently around the world
89
Who was the first American MNE
I .M. singer and co
90
Where are value chain activities performed?
In the country where it is most efficient
91
Value chain order
```
Market research➡️
R&d➡
️sourcing➡
️production➡
️marketing➡
️distribution➡
️after sales service➡️
```
92
4500 liters of water for One _______
Steak
93
Hollywood and American MNE's
Help create global culture
94
Adoption orders
- innovators
- early adopters
- early majority
- late majority
- laggards
95
Western (us, Japan, west europe) identical jobs can earn up to 4 times higher than the same jobs in ______________
- Eastern Europe
- Korea
- Brazil
96
Quasi globolization
Us promoted trade and provided aid during Cold War to keep nations on our side.
97
In which phase did the Soviet Union collapse and what was the result?
4 , increased globalization
98
Distribution channel intermediary
- physical distribution and marketing
- warrehousing & customer support
- important for exporters w/o foreign presence
- based either at home or abroad
99
Trading company
- based in home country
- high volume low margin
- many deal in commodities
100
Examples of facilitators
- banks
- trade lawyers
- freight forwarders
- brokers/agents
- consultants
- market researchers
- logistics service provider- DSL, FedEx
- customs brokers
101
The China price premise
USA can't compete with China based on price
102
Business model
Describes rationale of how a business creates delivers and captures value
103
How do developing economies often build projects?
Turnkey contractor
| -build-own-transfer
104
Greenfield investment
FDI where new facilities are made from ground up and create jobs in new country
105
Ethics
Moral principles or values regarding right and wrong
106
Corruption
Abuse of power for illegitimate gain
- over 30% of MNES view corruption as a severe concern
- grease payments expedite decisions and gain favors
107
Intellectual property rights
Intellectual property- ideas created by individuals. Ex. Inventions
- the legal claim through which assets are protected from unauthorized use
108
Which country has highest piracy levels?
China
109
Relativism
The belief that ethical truths are not absolute but differ from group to group. "When in Rome, do as the Romans do"
110
Normativism
Belief that ethical standards are universal, and firms and individuals should seek to uphold the consistently around the world
111
Who was the first American MNE
I .M. singer and co
112
Where are value chain activities performed?
In the country where it is most efficient
113
Value chain order
```
Market research➡️
R&d➡
️sourcing➡
️production➡
️marketing➡
️distribution➡
️after sales service➡️
```
114
4500 liters of water for One _______
Steak
115
Hollywood and American MNE's
Help create global culture
116
Adoption orders
- innovators
- early adopters
- early majority
- late majority
- laggards
117
Western (us, Japan, west europe) identical jobs can earn up to 4 times higher than the same jobs in ______________
- Eastern Europe
- Korea
- Brazil
118
Quasi globolization
Us promoted trade and provided aid during Cold War to keep nations on our side.
119
In which phase did the Soviet Union collapse and what was the result?
4 , increased globalization
120
Distribution channel intermediary
- physical distribution and marketing
- warrehousing & customer support
- important for exporters w/o foreign presence
- based either at home or abroad
121
Trading company
- based in home country
- high volume low margin
- many deal in commodities
122
Examples of facilitators
- banks
- trade lawyers
- freight forwarders
- brokers/agents
- consultants
- market researchers
- logistics service provider- DSL, FedEx
- customs brokers
123
The China price premise
USA can't compete with China based on price
124
Business model
Describes rationale of how a business creates delivers and captures value
125
How do developing economies often build projects?
Turnkey contractor
| -build-own-transfer
126
Greenfield investment
FDI where new facilities are made from ground up and create jobs in new country
127
Ethics
Moral principles or values regarding right and wrong
128
Corruption
Abuse of power for illegitimate gain
- over 30% of MNES view corruption as a severe concern
- grease payments expedite decisions and gain favors
129
Intellectual property rights
Intellectual property- ideas created by individuals. Ex. Inventions
- the legal claim through which assets are protected from unauthorized use
130
Which country has highest piracy levels?
China
131
Relativism
The belief that ethical truths are not absolute but differ from group to group. "When in Rome, do as the Romans do"
132
Normativism
Belief that ethical standards are universal, and firms and individuals should seek to uphold the consistently around the world
133
Who was the first American MNE
I .M. singer and co
134
Where are value chain activities performed?
In the country where it is most efficient
135
Value chain order
```
Market research➡️
R&d➡
️sourcing➡
️production➡
️marketing➡
️distribution➡
️after sales service➡️
```
136
4500 liters of water for One _______
Steak
137
Hollywood and American MNE's
Help create global culture
138
Adoption orders
- innovators
- early adopters
- early majority
- late majority
- laggards
139
Western (us, Japan, west europe) identical jobs can earn up to 4 times higher than the same jobs in ______________
- Eastern Europe
- Korea
- Brazil
140
In which phase did the Soviet Union collapse and what was the result?
4 , increased globalization
141
Examples of facilitators
- banks
- trade lawyers
- freight forwarders
- brokers/agents
- consultants
- market researchers
- logistics service provider- DSL, FedEx
- customs brokers
142
The China price premise
USA can't compete with China based on price
143
Greenfield investment
FDI where new facilities are made from ground up and create jobs in new country
144
Corruption
Abuse of power for illegitimate gain
- over 30% of MNES view corruption as a severe concern
- grease payments expedite decisions and gain favors
145
Intellectual property rights
Intellectual property- ideas created by individuals. Ex. Inventions
- the legal claim through which assets are protected from unauthorized use
146
Which country has highest piracy levels?
China
147
Who was the first American MNE
I .M. singer and co
148
Which country has highest piracy levels?
China
149
Where are value chain activities performed?
In the country where it is most efficient
