Lectures 4A and 4B (extra reading needed) Flashcards
(38 cards)
what are the 3 barriers to the political/legal environment
The political situation in the home country
The political situation in the host country
Third external country or market - united states put sanctions for the European companies that do business in Iran.
What are the promotional activities which occur in a home country environment
Promotional activities
Information Services
Export facilitating activities
Promotion by private organizations
state trading
what are the 3 threats in the host country
ownership threats
Operating threats
Transfer threats
what are political actions that may affect a businesses operations in a host country
Import restrictions
Local Content laws
Exchange control
Market Control
Price controls
Tax controls
Labor restrictions
Governmental Change
Nationalization
Domestication
What are the 2 types of trade barriers
Tariffs
Non-tariff barriers
What are trade laws designed to do
To protect domestic producers - provide local companies a comprehensive advantage
Generate revenue for the government.
what are tariffs
ask the company to pay for a specific period for operations in another country
what is ad valorem
only applicable for international trade. according to value of the imports you imports
How can Tariffs be discriminatory
tariffs can be discriminatory based on one country but not on the other one due to relationships with other countries.
What are all types of non-tariff barriers
Quotas
Embargos
Administrative delays
Local contents requirements
what’s an example of an embargo
The united states imposed a comprehensive trade embargo on Cuba in 1960. This embargo includes restrictions on trade financial transactions and travel between the two countries.
what are the 3 step process of political risk analysis
- Issues of relevance to the firm -not everything will be relevant to the firm
- Potential political events
- Probable impacts and responses
what model which should be used in step one of political risk analysis
BERI model
what are the factors whic h will need to be considered in phase 2 of potential political events
Determine the relevant political events
Determine their probability of occurring
Determine the cause and effect relationship
Determine the governments ability and willingness to respond.
What are the factors which need to be considered for step 3 for political risk analysis
Determine the initial impact of probable scenarios
Determine possible responses to initial impacts
Determine initial and ultimate political risk
What are the relationships which need to be built when operating in a host country
Government
Customers
Employees
Local communities
what are the main forms of economic integration in regional markets
Free Trade areas
Custom unions
Common Markets
Economic unions
what is the Law of one price
the amount of products that one products that one currency buys in one country should buy the same exact amount of currency from the different country.
What is the Big macs index
purchasing power implies that exchange rates are undermined by the value of goods is that currencies can be
- used to compare between two countries and determine whether the real exchange rate is equal to the official one or not
What are the advantages of regional integration
creates trade
Political cooperation between governments
Greater consensus
What are the disadvantages of regional integration
Trade diversification
Loss of sovereignty
Govern themselves in certain areas
Employment shifts
what are the three characteristics of culture
Shared
Interrelated
Shared
What is learned culture
The way he live, our parents, the community we are grew up in - learning things without intention can effect culture
what is Interrelated culture
related to ethnic groups, religion, community and where people grew up
