INTERNATIONAL BUSINESS
What is international business?
Business activities involving transactions across national borders.
What are the four categories in the BCG Matrix?
Star, Cash Cow, Question Mark, and Dog.
What is an export?
A good produced in one country and sold to another country.
What do GATT and WTO stand for?
General Agreement on Tariffs and Trade and World Trade Organization.
A Jamaican company sells coffee to Canada. Is this importing or exporting for Jamaica?
Exporting, because the coffee is sold to another country.
A company in Barbados purchases machinery from China. Is this importing or exporting for Barbados?
Importing, because the machinery is purchased from another country.
A product has high market share in a fast-growing market. Which BCG category is it?
STAR
What is a trade deficit?
When a country imports more goods by value than it exports.
What is one major purpose of GATT?
To encourage international trade by reducing tariffs and other trade barriers.
A company's product has high market share in a slow-growing market. Which BCG category is it?
Cash Cow.
Give two reasons why a company might enter an international market.
To reach more customers, increase sales, access resources, or diversify markets. Any two.
A product has high market share in a slow-growing market. Which BCG category is it, and why is it valuable?
Cash Cow. It can generate cash to support other products.
A country exports goods worth $80 million and imports goods worth $100 million. What is its balance of trade?
−$20 million, meaning a trade deficit of $20 million.
What is the Most-Favoured-Nation (MFN) principle?
WTO members should generally give other members equal trade treatment, subject to permitted exceptions.
Jamaica imports more goods than it exports. What does this mean for its balance of trade?
Jamaica has a trade deficit.
A company begins selling overseas but faces different consumer preferences. Why should it study the foreign market?
To understand customer needs and adapt its products or marketing strategies.
A company has a new product with low market share in a fast-growing market. Identify its BCG category and suggest one strategy.
Question Mark. The company could invest in marketing and product development to increase market share.
A country's exports increase while its imports remain unchanged. What happens to its balance of trade?
Its balance of trade improves, all else being equal.
A company exports biscuits to another country. Explain how reducing import tariffs could help the company and consumers.
Lower tariffs could make the biscuits cheaper and more competitive, helping the company sell more. Consumers could benefit from lower prices and greater choice.
A Ghanaian company faces high tariffs when exporting biscuits to Germany. How might reducing tariffs help?
It could reduce the biscuits' cost in Germany, improve their competitiveness, and potentially increase sales.
A company exports its products overseas. Explain one benefit to the company and one benefit to consumers in the importing country.
The company may increase sales and profits. Consumers may gain more product choices and greater competition.
A company has a Star, Cash Cow, Question Mark, and Dog. Explain how management could use the BCG Matrix to allocate resources.
Invest in the Star, use cash from the Cash Cow to support promising products, assess whether to invest in the Question Mark, and consider repositioning or discontinuing the Dog.
A local company imports raw materials but exports finished products. Explain how both activities affect its country's balance of trade.
Imported raw materials increase the value of imports, while exported finished products increase the value of exports. The overall effect depends on their relative values and other trade flows.
A company wants to expand internationally. Explain two ways GATT/WTO principles could help it and one challenge it might still face.
Lower trade barriers and more predictable trading rules could make exporting easier. However, the company may face greater competition or need to meet foreign market requirements.
A company imports packaging materials, exports finished products, and wants to enter new markets. Explain how increasing exports could affect its country's balance of trade and how GATT/WTO principles could support expansion.
Increased exports could improve the country's balance of trade if other trade flows remain unchanged. Lower trade barriers and predictable rules could support expansion, although the company must still manage competition and costs.