Chapter 3: Competing in Global Markets – Flashcards
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Free Trade • T? do th??ng mai
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Movement of goods and services among nations without political or economic barriers
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Comparative Advantage
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• Sell to other countries those products that it produces most effectively and efficiently • Buy from other countries those products that it cannot produce as effectively and efficiently trade
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Absolute Advantage
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Monopoly on producing a specific product Produce it more efficiently than all other countries
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Balance of Trade • Cán cân th??ng m?i
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Nation's ratio of exports to imports
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Trade Surplus
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Exports > Imports
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Trade Deficit
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Imports > Exports
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Licensing • C?p phép
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A firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty)
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Franchising • Nh??ng quy?n kinh doanh
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Contractual agreement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service in a given territory in a specified manner
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Contract Manufacturing (Outsourcing) • Gia công bên ngoài
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Foreign country's production of private-label goods to which a domestic company then attaches its brand name or trademark
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Offshore Outsourcing
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Purchase of goods and services from outside a firm rather than providing them inside the company
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Joint Venture • Liên doanh
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Partnership in which two or more companies (often from different countries) join to undertake a major project
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Strategic Alliance • Liên minh chi?n l??c lâu dài
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Long-term partnership between two or more companies established to help each company build competitive market advantages
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Foreign Direct Investment (FDI) • ??u t? tr?c ti?p ? n??c ngoài
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Buying of permanent property and businesses in foreign nations
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Foreign Subsidiary • Chi nhánh ? n??c ngoài
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Company owned in a foreign country by the parent company
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Multinational Corporation • Công ty ?a qu?c gia
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Organization that manufactures and markets products in many different countries
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Ethnocentricity
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An attitude that one's own culture is superior to all others
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Devaluation
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Lowering the value of a nation's currency relative to other currencies
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Countertrading • Th??ng m?i m?u d?ch
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A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services
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Trade Perfectionism
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Use of government regulations to limit the import of goods and services
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Dumping
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Selling products in a foreign country at lower prices than those charged in the producing country
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Tariff
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A tax imposed on imports
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Protective Tariffs
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Raise the price of foreign products
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Revenue Tariffs
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Raise money for the government
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Import Quota • Gi?i h?n hàng hóa nh?p kh?u
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Limit on the number of products in certain categories that a nation can import Example: The Canadian government has announced a $5-million annual limit on beef imported from Argentina.
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Embargo • L?nh c?m v?n
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A complete ban on the import or export of a certain product or the stopping of all trade with a particular country
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Common Market
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A region with no barriers between them
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World Trade Organization (WTO) • Dàn x?p tranh ch?p th??ng m?i gi?a các qu?c gia
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International organization that replaced the GATT, and was assigned the duty to mediate trade disputes among nations
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International Monetary Fund (IMF) • Cho vay ti?n
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International bank that makes short-term loans to countries experiencing problems with their balance of trade
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World Bank • Lá lành ?ùm lá rách
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An autonomous United Nations agency that borrows money from the more prosperous countries and lends it to less developed countries to develop their infrastucture
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Producers' Cartels • Bình ??nh/t?ng giá ?? t?i ?u hóa l?i nhu?n
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Organizations of commodity-producing countries that are formed to stabilize or increase prices to optimize overall profits in the long run
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Trading Bloc • European Union
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Regional group of countries that have a common external tariff, no international tariffs, and a coordination of laws to facilitate exchange (European Union)
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NAFTA • North America nations
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An agreement that created a free-trade area among Canada, the United States, and Mexico
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A major concern voiced by Canadian critics of NAFTA is that it would result in
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loss of jobs in the Canadian economy
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All of the following are recognized as being potential hurdles to be overcome in global trading, except
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lack of market opportunities - không ph?i rào c?n trong th??ng m?i toàn c?u
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Many economists and business experts contend that ________ will likely be the growth market of the future
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Asia
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Which of the following strategies for competing in the global markets involves the lowest profit potential?
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Licensing
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The difference between money coming into and leaving the country plus money flows from factors such as tourism and foreign aid is referred to as the
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balance of payments
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The value of goods imported into France exceeds the value of French exports. This indicates that France
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has a balance of trade deficit
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Companies such as McDonald's, Pizza Hut, and KFC, have entered the global market by offering investors the opportunity to set up
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franchises
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A Mexican firm has agreed to trade petroleum to an American importer in return for Canadian made computers. This arrangement is an example of
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countertrading
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U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to unfriendly" governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n)
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embargo
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Ford trades vehicles to Jamaica, which then trades them to China in exchange for computers. This is an example of
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countertrading
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Advocates of trade protectionism believe that it
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allows domestic producers to survive and grow, producing more jobs
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Nations should trade with other nations because
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• No country is self-sufficient • Other countries need products that prosperous countries produce • Natural resources and technological skills are not distributed evenly around the world
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Four forces affecting trade
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• Sociocultural forces (religion) • Economic forces (disposable income) • Legal and Regulatory forces (law on bribery) • Technological forces (Internet usage)
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All of the following are recognized as being potential hurdles to be overcome in global trading, except
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Different cultures - không ph?i rào c?n trong th??ng m?i toàn c?u
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The United States has stopped some Canadian goods from entering the country because it said that the information on the labels was too small. This is an example of a(n)
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Non-tariff barrier
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Floating Exchange Rate
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Currencies float according to supply and demand for them and the global market
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Global Currency Traders
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Value currencies based on how strong the current currency of the country is
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What is a problem with international law and business?
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Inconsistency
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How do companies ensure that they operate at a profit in the global market?
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They review their global operations frequently.
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Trade is so important because
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it enhances the life of the average Canadian and it boosts the economy
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Which industry is critical to the Canadian economy?
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Auto-industry
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Which one of Canada's industries is shrinking?
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Assembly industry
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Why is the Canadian assembly industry shrinking?
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Low wages and financial incentives
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Who can help Canadian firms establish foreign trading relationships?
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Export trading companies
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A major benefit of licensing is that
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organizations can access a new market
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What is a problem with foreign direct investment?
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If relations with the host company falter, the foreign government can take over the assets of the firm in their country
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What is the historical term for economics?
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Political economy
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Ethical behavior will result in which of the following?
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D) Improved self-esteem making us feel good about our decision
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_________________ differences such as insufficient electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets.
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A) Physical and environmental
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If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a
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C) foreign subsidiary
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When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of
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A) licensing
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Reviewing the recent experience of the United States in global markets reveals that the U.S. has
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B) a large trade deficit with China
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As a business strategy, the strategy behind "dumping" is to __________.
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A) gain a foothold in a new market
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Some critics of corporate social responsibility view spending money on CSR as
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B) stealing from investors
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Business is under pressure from society to be more socially responsible. However, even the strongest advocates for corporate responsibility can't seem to agree:
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A) on what social responsibility involves.
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While speaking with his sales force, the director of sales explains, "Anyone caught violating a sales law will be fired." After studying business ethics, you recognize this remark as a reference to the firm's __________ ethics.
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C) compliance-based
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A very critical last step in the process of establishing an ethics code is ________.
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C) enforcement
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When managers disregard ethical concerns, the likely result is
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D) a general mistrust between workers and management
