Business Operations Terminology

Business Fundamentals

• The primary aim of business is to generate profit by providing goods or services to consumers.

Industry Insights

• The extraction industry involves obtaining natural resources such as minerals, oil, and gas.

Trade Agreements

• NAFTA stands for the North American Free Trade Agreement, which aimed to reduce trade barriers between Canada, Mexico, and the United States.

Investment Types

• Controlling investment refers to a type of investment where an investor oversees some or all business operations to maximize returns.

Trade Restrictions

• Import quotas limit the number or monetary value of goods a country can import, impacting trade volume and balance.

Economic Sanctions

• Economic penalties can include diplomatic measures and restrictions on trade, often employed to influence a country’s policies.

Currency Characteristics

• A soft currency is one that fluctuates in value and typically trades at lower values compared to stronger currencies.

Competitive Dynamics

• The race to the bottom occurs when companies compete to lower prices or standards, potentially sacrificing quality or ethics to remain competitive.

Outsourcing Practices

• Outsourcing is the business practice of hiring external parties to perform services that were traditionally handled in-house, aimed at cost reduction and efficiency.

Market Differences

• The key difference between domestic markets and foreign markets is that domestic markets involve transactions within a country, while foreign markets incorporate international trade and competition.

Globalization Impact

• One significant impact of globalization on businesses is increased access to international markets, providing opportunities for expansion and new customer bases.

Franchising Explained

• Franchising in a business context involves a company (the franchisor) allowing another party (the franchisee) to operate a business using its brand and operational model for a fee.

Benefits of International Trade

• International trade benefits businesses by providing access to larger markets, diverse consumer bases, and opportunities for economies of scale.

NAFTA Functions

• NAFTA primarily facilitates trade by eliminating tariffs and promoting economic cooperation between its member countries, encouraging cross-border business activities.