Ch 18 global opportunities

Question 1

globalization

Answer 1

expansion of international business

Question 2

born-global firms

Answer 2

small companies launched with cross border business activities in mind

Question 3

experience curve efficiencies

Answer 3

per-unit savings gained from the repeated production of the same product

Question 4

learning effects

Answer 4

insights gained from experience that lead to improved work performance

Question 5

economies of scale

Answer 5

efficiencies that result from expansion of production

Question 6

international outsourcing

Answer 6

strategy that involves accessing foreign business operations through independent providers

Question 7

offshoring

Answer 7

strategy that involves relocating operations abroad

Question 8

exporting

Answer 8

selling products that are produced in home country to customers in another country

Question 9

importing

Answer 9

selling products produced in another country to buyers in the home country

Question 10

foreign licensing

Answer 10

allowing a company in another country to purchase the rights to manufacture and sell a product in international markets

Question 11

licensee

Answer 11

the company buying licensing rights

Question 12

licensor

Answer 12

the company selling licensing rights

Question 13

royalties

Answer 13

fees paid by the licensee to licensor for each unit produced

Question 14

counterfeit activity

Answer 14

unauthorized used of a company’s intellectual property or product

Question 15

international franchising

Answer 15

selling a standard package of products.services. mgmt services, to a company in another country

Question 16

international strategic alliance

Answer 16

combination of efforts and/or assets of companies in different countries for the sake of pooling resources and sharing risks

Question 17

cross-border acquisition

Answer 17

purchase by a business in one country of a company located in another country

Question 18

greenfield venture

Answer 18

a wholly owned subsidiary formed from scratch in another country

Question 19

political risk

Answer 19

potential for political forces to negatively affect performance of business in that country

Question 20

economic risk

Answer 20

probability that a countrys Gov. will mismanage economy hindering performance of firms

Question 21

exchange rate

Answer 21

value of one countrys currency relative to that of another country

Question 22

trade mission

Answer 22

trip organized to see potential markets and establish strategic alliances

Question 23

trade intermediary

Answer 23

an agency that distributes a companys products to customers in another country

Question 24

letter of credit

Answer 24

an agreement issued by a bank to honor a draft, or other demand of payment when specific conditions are met

Question 25

bill of lading

Answer 25

a document indicating that a product has been shipped and the title to that product has been transferred