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International markets and competition > question 1 > Flashcards

question 1 Flashcards

(45 cards)

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1
Q

perfect competition

A

Many sellers of identical products

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2
Q

Monopoly market definition

A

one major seller of single products

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3
Q

Monopolistic

A

many sellers with products that have minimum differences

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4
Q

Oligopoly

A

Few sellers with differentiated products

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5
Q

Fair competition aspects

A

producing quality goods

cost efficient

investment in research and development

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6
Q

unfair competition

A

fixing price with rivals

pricing lower than costs to eliminate competition

focused on market dominance

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7
Q

Forms of Anti competitive behaviour

A

Anti competitive agreements between firms (Collusion) i.e fixed pricing

Abuse of dominant market positions i.e predatory pricing

Anti competitive mergers and acquisitions i.e unification of companies

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8
Q

Why is competition important ? - policy perspective

A

intense competition means lower costs for consumers and higher consumer surplus.

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9
Q

meaning of competitive advantage of a firm

A

Ability to generate greater than the average profitability in the industry. it can be classed as sustained when it can be maintained over a couple of years

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10
Q

The four Rs

A 
Resources 
Roots 
Recombination 
Reach
(Datta et al 2021)
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11
Q

Two Sources of competitive advantage

A

Cost advantage- similar product at lower cost

Differentiation advantage - price premium for unique product

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12
Q

Porters 1985 generic strategies

A

cost leadership
cost focus
differentiation
differentiation focus

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13
Q

four sectors of Bartlett and Ghoshal matrix

A

Global
international
transnational
multi-domestic

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14
Q

Four sections of Porters 1998 Dimond model

A

Factor conditions.

Firm strategy, structure and rivalry.

related and supported industries

demand condition

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15
Q

Key players in international business

A

National states

Multinational corporations

Multilateral institutions (WTO, IMF)

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16
Q

Define a MNC

A

A Multinational corporations is a firm that has the power to coordinate and control operations in more than one country (Dicken, 2007)

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17
Q

Characteristics of MNC

A

Ability to co-ordinate various processes within transnational production networks

Ability to take advantage of geographical differences i.e resources, labour and Capital.

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18
Q

two Key Ability of MNC

A

Mobile resources

Immobile resources

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19
Q

Competitive advantages of MNCs

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A

Firm Specific advantages
Home Country advantages
Host Country conditions
(Datta et al, 2021)

20
Q

Meaning of Externality

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A

A benefit incurred by the party who did not agree to the action causing the cost or benefit.

21
Q

Positive Externality of MNCs

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A

Economic development

Higher wages

Knowledge spill overs

Adoption of best practices

22
Q

Negative externalities of MNCs

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A

Loss of local knowledge

Dependence on external knowledge

Undermining of national sovereignty

Alien culture

Degradation of ecology

23
Q

Example of Positive externalities of MNCs

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A

investment in Vietnam has meant increase in wages and a deduction of poverty from 58.2% in 1993 to 37.4% in 1998
(Glewwe, 2000)

24
Q

Negative example of MNCs externality

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A

Union Carbide corporation had a gas leak Bhopal where their leak killed 3800 people

25
Roles that States play in international business
Container Regulator Competitor Collaborator
26
State as Regulator
Trade Policies Foreign direct investment Policies Industry Policies Tariffs
27
How can the State promote economic growth
Protecting infant industries Developing an industrial base Preserving national identity Maintaining essential industries
28
State as Competitor
Use competitive advantage from Porters Diamond
29
State as collaborators
States collaborate with other states to achieve economic and welfare goals
30
types of reginal economic integration
Free trade area Customs Union Common Market Economic Union
31
Trade theories
``` Mercantilism Absolute advantage Comparative advantage Heckscher-Ohlin theory New trade theory national competitive advantage ```
32
Mercantilism theory
Nations should accumulate national financial wealth by encouraging exports and discouraging imports
33
Absolute advantage
A Country should produce goods where it is efficient, and should trade those goods for where the goods are not efficient. (Adam Smith, 1776)
34
Comparative Advantage (David Ricardo, 1817)
Countries should import even if more efficient in that production area that country buying from
35
Heckscher Ohlin theory
Explains that countries who trade with each other will achieve greater economic welfare if: - factors like labour and capital are proportional in both countries - labour and capital do not move between the countries - no costs when transporting goods between countries.
36
World trade organisations (WTO)
Deals with the rules of trade between countries
37
Multilateral WTO agreements
trade in goods General agreement on trade in services (GATS) Agreement on trade related aspects on intellectual property (TRIPS)
38
Role of WTO
Trade negotiations Implementation and monitoring Dispute settlement Building trade capacity
39
Multilateral
agreed upon or participated in by three or more parties, especially the governments of different countries. (WPO)
40
What is competitive business strategy about
creating value for the firm
41
Define Competitors
a person if your competitor if the customers values your product less when they have the other persons product
42
Define Complementor
A person is this when a customer values your product more when they have the other persons product
43
What is game theory
the study of mathematical models of conflict and corporation between intelligent rational decision makers
44
Benefits of globalisation
helped countries grow faster by opening up to international trade and capital . Reduced the sense of isolation
45
negatives of rise of MNCs
destruction of environment loss of national sovereignty loss of local knowledge income inequality

International markets and competition (1 decks)

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