Chapter 3 Competing In Global Markets Flashcards Preview

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Flashcards in Chapter 3 Competing In Global Markets Deck (22):
1

Importing

Buying products from other countries

2

Free trade

Movement of goods and services among nations without political or economic barriers

3

Comparative advantage theory

Theory that states that a contest should sell to other countries those products that it products most effectively and efficiently

4

Absolute advantage

Advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than other countries

5

Balance of trade

Nations ratio of exports to imports

6

Trade surplus

A favourable balance of trade occurs when the values of a country's exports exceeds imports

7

Trade deficit

Unfavourable balance of trade occurs when the value of imports exceeds that of its exports

8

Licensing

Global strategy in which a firm allows a foreign company to produce its product in exchange for a fee(royalty)

9

Contract manufacturing

Foreign country's production of private label goods to which a domestic company than attaches it's brand name or trademark

10

Joint venture

A partnership in which 2 or more companies join to undertake a mouse project

11

Strategic alliance

Long term partnership between 2 or more companies established to help each company build competitive market advantages

12

Foreign direct investment

Buying of permanent property and businesses in foreign nations

13

Foreign subsidiary

Company owned in a foreign country by the parent company

14

Culture

Set of values, beliefs and rules and institutions held by a specific group of people

15

Ethnocentricity

Attitude that ones own culture is superior to all others

16

Devaluation

Lowering the value of a nations currency relative to other currency's

17

Counter trading

Complex form or bartering I which several countries may be involved, each trading goods for goods or services for services

18

Trade protectionism

The use of government laws to limit import of goods and services

19

Dumping

Selling products in another country at lower prices than the country producing the product

20

Tariff

A tax imposed on imports

21

Embargo

Complete ban on imports or exports of a certain product or stopping all trade with a country

22

Exporting

Selling products to other countries