Vocabulary
Global Business Strategies
Global Trade Forces
Indicators
100
What is an embargo?
A ban on the import or export of a good
100
Provide one advantage of franchising
•Allows companies to have a global presence without heavy investments
•Immediate competitive advantages for licensee/franchisee
•Quickly begin efficient and profitable operations
•Inexpensive access to a new market
100
Organizations that intend to sell products and services in different countries must be _________ to the cultural factors at work in their target markets such as
sensitive, aware, empathetic, etc
100
Why should nations trade with other nations?
No country is self-sufficient, natural resources, needs
200
What is a quota?
some form of limit on trade
200
In a licensing agreement the licensor agrees to let someone else (the licensee) use the __________ of the licensor in exchange for a fee.
property (logos)
License agreements usually cover property that is intangible, such as trademarks, images, patents, or production techniques.
200
Provide an example of Physical/Environmental differences (other than climate) that affect global trade
•Lack of roads, railways, and port systems needed to transport goods
•Inadequate storage facilities
•Limited access to electricity, clean water, and sanitation
200
A nation has more exports than imports. In terms of their balance of trade, what do they have?
Trade surplus
300
The purpose of a protective tariff
to protect domestic business, trade, and jobs
300
A trade deficit occurs when this happens...
nation imports more than it exports.
400
Devaluation refers to a decline in the value of a nation's ___________ relative to other currencies.
currency (money)
Exchange rate also accepted
400
The key difference between strategic alliance and a joint venture
a new company is formed with a joint venture as opposed to a strategic alliance which is an agreement to collaborate for a period of time
400
Businesses target the markets and countries where people have the highest incomes and the most disposable income. What is the total amount of money earned by a nation's people and businesses. (Hint: not gross domestic product GDP)
GNI Gross national income
400
Licensing and franchising are two options for gaining access to global markets. Licensing is generally used with _____; franchising is generally used to “export” _____.
Intangible goods; branded product or service.
500
Define Trade protectionism and give 2 DIFFERENT examples of a form of protectionism
Government regulations to limit the import of goods and services. Tariffs, Embargos, Quotas
500
Explain the difference between a joint venture and a strategic alliance.
A joint venture establishes a new business that is owned by two or more otherwise independent businesses.
A strategic alliance is formed between two or more corporations, each based in their home country, for a specified period of time.
500
The nature of a country’s political economy plays a big role in whether it is attractive to foreign business and entrepreneurship. •Businesses prefer to invest in countries with what types of governments?
Stable, Democracy, Freedom
500
Explain the difference between absolute and comparative advantage utilizing the term 'opportunity cost'.
Comparative Advantage
•When an entity can produce a particular good or service at a lower relative opportunity cost compared to another entity.
Absolute Advantage
•When an entity (country, region, company, or individual) OR is the only source of a particular product, good, or service (very rare) or is able to produce more of something than another entity while using the same amount of resources. (NO REFERENCE OF TRADE OR OPPORTUNITY COSTS)