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What is the term used for the price fixed for export products or services in overseas markets?
What is the term used for the price fixed for export products or services in overseas markets?
What is the main objective of export pricing related to survival?
What is the main objective of export pricing related to survival?
Pricing helps exporters survive competition.
Export Promotion is only beneficial for the exporting country's economy.
Export Promotion is only beneficial for the exporting country's economy.
False
Export costing involves both fixed cost and __________ cost.
Export costing involves both fixed cost and __________ cost.
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Define international business.
Define international business.
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What are some advantages of international business?
What are some advantages of international business?
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Globalization is the shift toward a more integrated and interdependent ____ economy.
Globalization is the shift toward a more integrated and interdependent ____ economy.
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Mercantilism was an economic system that advocated free trade.
Mercantilism was an economic system that advocated free trade.
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Match the following: Countries involved in Mercantilism vs. Countries competing on economic and military fronts
Match the following: Countries involved in Mercantilism vs. Countries competing on economic and military fronts
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What are the 2 ways in which subsidies help domestic producers?
What are the 2 ways in which subsidies help domestic producers?
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What do anti-dumping duties aim to combat?
What do anti-dumping duties aim to combat?
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International Marketing aims to satisfy the needs of people residing across national borders.
International Marketing aims to satisfy the needs of people residing across national borders.
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Export packing refers to the proper way of protecting goods for a secured and safe travel to the ______ of destination.
Export packing refers to the proper way of protecting goods for a secured and safe travel to the ______ of destination.
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Match the following distribution channels with their descriptions:
Match the following distribution channels with their descriptions:
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According to the content, which industries are considered as the leader of a particular product and play a role in innovation?
According to the content, which industries are considered as the leader of a particular product and play a role in innovation?
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The growth of one industry has no impact on the growth of other industries. (True/False)
The growth of one industry has no impact on the growth of other industries. (True/False)
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What major organization was established in 1994 at the end of the Uruguay Round of trade negotiations?
What major organization was established in 1994 at the end of the Uruguay Round of trade negotiations?
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The ASEAN Economic Community (AEC) is aimed at integrating ten ASEAN Member States into a single _____ and production base.
The ASEAN Economic Community (AEC) is aimed at integrating ten ASEAN Member States into a single _____ and production base.
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Match the following market entry methods with their descriptions:
Match the following market entry methods with their descriptions:
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Study Notes
International Business and Global Trade
- International business: business transactions that take place across national borders
- Advantages of international business:
- Product flexibility: products that don't sell well in local markets may find greater demand abroad
- Minimized competition: international markets with less competition
- Protection from national trends and events: diversifying sales across multiple countries reduces vulnerability to events in one country
- Firm goals in international business:
- Expand sales to increase potential market
- Acquire resources (capital, technology, information) from foreign markets
- Minimize risk through diversification
Globalization
- Globalization: shift towards a more integrated and interdependent world economy
- Factors causing globalization:
- Trade negotiations
- Reduced transport costs
- Internet growth
- Development of trading blocks
- Globalization of production: sourcing goods and services from locations around the world to take advantage of national differences in production costs
Cultures, Ethics, and Norms
- Culture: a system of values and norms shared among a group of people
- Business ethics: accepted principles of right or wrong governing business conduct
- Norms: social rules and guidelines that prescribe appropriate behavior in particular situations
- Importance of understanding cultural differences in global business
International Trade
- International trade: exchange of goods and services between countries
- Foreign direct investment (FDI): investment in business operations in another country
- Multinational enterprise (MNE): a business with operations in multiple countries, integrated globally
- Mercantilism: an economic theory that advocates government regulation of international trade to generate wealth and strengthen national power
Comparative Advantage
- Absolute advantage: producing a good or service at lower cost than another country
- Comparative advantage: producing a good or service at lower opportunity cost than another country
- David Ricardo's theory of comparative advantage: countries should specialize in producing goods and services in which they have a comparative advantage
- Comparative advantage leads to increased productivity and economic growth
Porter's National Competitive Advantage
- Michael Porter's Diamond Theory of National Advantage: a model that explains the competitive advantage that nations or groups possess due to certain factors
- Four determinants of national advantage:
- Factors of production (inputs: natural resources, labor, infrastructure)
- Demand conditions (nature and size of customers in the home market)
- Related and supporting industries (industries that support innovation and growth)
- Organizational strategy, structure, and rivalry (companies' strategies, structures, and rivalry influence national advantage)
Product Life Cycle Theory
- Product life cycle: stages of a product's life, from introduction to decline
- International trade implications of product life cycle:
- Exporting to countries where demand is growing
- Setting up production facilities in countries with growing demand
- Facing competition from foreign producers
WTO and GATT
- World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT): organizations that aim to reduce tariffs and other trade barriers among member countries
- Timeline of GATT and WTO:
- 1944: Bretton Woods Conference establishes IMF and IBRD, and discusses ITO
- 1947: GATT treaty signed, creating a set of rules to govern trade among 23 member countries
- 1986-94: Uruguay Round of trade negotiations establishes WTO
- 1995: WTO replaces GATT as the world's primary international trade organization
ASEAN Economic Integration
- ASEAN Economic Community (AEC): a major milestone in regional economic integration in Southeast Asia
- AEC Blueprint 2025: a plan to create a highly integrated economy in ASEAN by 2025
- ASEAN Economic Integration Brief (AEIB): a regular update on ASEAN economic integration progress and outcomes
International Strategic Management
- International strategic management: an ongoing process of developing strategies to allow an organization to expand abroad and compete internationally
- Three strategic planning processes:
- Fluid decision process
- Constricted process
- Sporadic process
Entering Foreign Markets
- Scale of entry: entering a market on a large or small scale, depending on resources and risk tolerance
- Market entry methods:
- Importing and exporting
- Licensing and franchising
- Joint ventures and strategic alliances
- Direct investment (greenfield or acquisition)
- Trade restrictions:
- Tariffs
- Quotas
- Voluntary export restraints### International Trade and Marketing
- Exporting: direct sale of goods and/or services in another country
- Voluntary Export Restraint (VER): self-imposed trade restriction by an exporting country to limit the number of goods exported to a specific country or region
- Types of Export Restraints:
- Preset limit on the quantity of goods exported
- Reduction in the number of goods exported
- Complete restriction on the export of specific goods
- VERs have been used since the 1930s and were popular in the 1980s, but were eventually phased out under the WTO agreements
Foreign Direct Investment (FDI)
- Direct investment in facilities in a foreign market
- Wholly Owned Subsidiary (WOS): a foreign business owned entirely by a company
- Joint Venture: a jointly-owned business between two companies
- Franchising: selling intellectual property rights to a franchisee
- Licensing: allowing another company to use your property in a target country
Instruments of Trade Policies
- Tariff: a tax imposed on imported goods and services
- Subsidy: financial support to domestic producers to lower production costs
- Local Content Requirements: policies requiring firms to use domestically-manufactured goods or services
- Administrative Policies: rules and regulations governing trade
- Duties: taxes imposed on imported goods, including anti-dumping duties
- Anti-Dumping Duty: a tariff imposed on imports priced below fair market value
Alliances and International Cooperation
- Alliances: cooperative agreements between firms from different countries
- Benefits of Alliances:
- Facilitates entry into a foreign market
- Allows firms to share fixed costs and risks
- Enables firms to bring together complementary skills and assets
- Disadvantages of Alliances:
- Gives competitors access to new technology and markets
- High failure rates for international alliances
International Marketing
- Application of marketing principles to satisfy diverse needs and wants of people across national borders
- Benefits of International Marketing:
- Higher standard of living
- Rational and optimum utilization of resources
- Rapid growth and development
- Cultural exchange and world peace
New Product Development
- Process of bringing a new product or service to market
- Steps in New Product Development:
- Idea Generation
- Idea Screening
- Concept Development and Testing
- Market Strategy Development
- Product Development
- Test Marketing
- Commercialization
Export Packing, Marking, and Labeling
- Export Packing: proper way of protecting goods during transit
- Considerations for Packing:
- Nature of the Product
- Mode of Transportation
- Climactic Conditions
- Pilferage Susceptibility
- Customer Requirements
- Cost of Packing Materials
- Export Marking: identification for international movement of goods
- International Marking Systems for Packages and Pallets
Export Distribution Channels
- Includes all individuals and institutions involved in making goods reach consumers from producers
- Types of Distribution Channels:
- Manufacturer → Agent → Wholesaler → Retailer → Consumer
- Manufacturer → Agent → Retailer → Consumer
- Manufacturer → Agent → Consumer
- Manufacturer → Wholesaler → Retailer → Consumer
- Manufacturer → Retailer → Consumer
- Manufacturer → Consumer
Export Pricing and Costing
- Export Pricing: price fixed for export products or services
- Factors Affecting Export Pricing:
- Range of products offered
- Prompt deliveries and continuity in supply
- Objectives of Export Pricing:
- Maximum Sales Growth
- Maximum Current Profit
- Establishing Leadership### After-Sales Service and Product Differentiation
- After-sales service is crucial in products like machine tools and consumer durables.
- Charging a higher price and making a noticeable difference in price compared to competitors can fulfill this objective.
- Product differentiation and brand image are key to achieving this goal.
Export Costing
- Export costing is the responsibility of a Cost Accountant.
- It consists of fixed costs and variable costs, comprising various elements.
Objectives of Export Pricing
- Survival in competitive markets is the first objective of export pricing.
- Export pricing is a marketing tool used to overcome competition.
- The price of exported goods affects the trade balance and overall economy.
Export Promotions
- Export promotions are used by countries and regions to promote goods and services abroad.
- Benefits of export promotions include:
- Comparative advantage: resources are used more efficiently by replacing imports with domestic goods.
- Increased investment: outward-oriented policies may encourage inward investment and improve domestic productivity.
- Economies of scale: increased sales of exports may raise domestic production levels.
- Increased employment: increased production boosts domestic employment levels.
- Greater equality of income distribution: increased demand for labor boosts wages in a developing economy.
- Increased competition: outward-oriented strategies expose countries to international competition.
Note: These study notes focus on the key points and concepts mentioned in the original text, without repeating information or using introductory phrases.
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Description
This quiz covers the basics of international business and global trade, including the concepts of international business, pros and cons of globalization, and more.
