International Business Concepts

The performance of activities by firms across national borders.

<p>Multinational firms</p> Signup and view all the answers

<p>Global sourcing</p> Signup and view all the answers

<p>Both finished products and intermediate goods</p> Signup and view all the answers

<p>The transfer of assets to another country or the acquisition of assets in that country.</p> Signup and view all the answers

<p>Government regulations</p> Signup and view all the answers

<p>Cross-border purchase of stocks</p> Signup and view all the answers

<p>GDP (Gross Domestic Product)</p> Signup and view all the answers

<p>Advanced economies now source many of their consumable products from low-cost manufacturing nations.</p> Signup and view all the answers

<p>The increase in trade barriers</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>Entrepôt economies are countries that import a large volume of products, some of which they process into higher value-added products, while others they simply re-export to other destinations. Singapore is a major entrepôt for petroleum products received from the Middle East, which it then exports to China and other destinations in Asia.</p> Signup and view all the answers

<p>FDI has grown significantly since the 1980s, with a rapid increase in the dollar volume of FDI, especially in developed countries. FDI inflows to developing economies surpassed those to advanced economies around 2010. Although interrupted by events like the 2001 terrorist attacks and the 2008 global recession, the trend has continued to grow, particularly in developing economies, driven by their need for modernization and infrastructure development.</p> Signup and view all the answers

<p>Products are tangible goods, such as clothing, computers, and cars, while services are intangible deeds, performances, or efforts, such as advertising campaigns, financial services, and restaurant management. International trade in services, like tourism and transportation, has seen the greatest growth in recent years.</p> Signup and view all the answers

<p>The three sectors are: 1) Architectural, construction, and engineering: Services include construction, design, and engineering for infrastructure projects. Companies include Bechtel, Halliburton, and Kajima. 2) Banking, Finance, and Insurance: Services include financial management, risk evaluation, and insurance provision. Companies include HSBC, Morgan Stanley, and Allianz. 3) Education, training, and publication: Services include management training, technical training, and language training. Companies include Berlitz, Kumon, and Pearson.</p> Signup and view all the answers

<p>International trade is the exchange of products and services across national borders. It can occur through exporting, where goods are sold to customers located abroad from a base in the home country or third country, or importing, where goods are sourced from suppliers located abroad for consumption in the home country or third country. Both finished products and intermediate goods can be imported and exported.</p> Signup and view all the answers

<p>International business is the performance of trade and investment activities by firms across national borders. The key developments that have transformed the world economy are: 1) Increased international trade and investment: Global trade and FDI have experienced rapid growth in recent decades. 2) Rise of emerging markets: Countries like China, India, and Brazil have become major players in global trade and investment. 3) Advancements in technology: The internet, information technology, and communication technologies have facilitated international business and interconnectedness. 4) Globalization of markets: The world has become increasingly integrated, with companies operating across multiple countries.</p> Signup and view all the answers

<p>Country risk</p> Signup and view all the answers

<p>Costs of production</p> Signup and view all the answers

<p>Currency risk</p> Signup and view all the answers

<p>Currency risk</p> Signup and view all the answers

<p>The level of national debt</p> Signup and view all the answers

<p>Cross-cultural risk refers to a situation or event where a cultural miscommunication puts some human value at stake. It arises from differences in language, lifestyles, mind-sets, customs, and religion. Miscommunication due to cultural differences can lead to inappropriate business strategies and ineffective relations with customers.</p> Signup and view all the answers

<p>International firms routinely face four types of risk: 1) Cross-cultural risk: Misunderstandings due to cultural differences. 2) Country risk: Political, economic, and legal risks of a foreign country. 3) Currency risk: Fluctuations in exchange rates. 4) Commercial risk: Poorly developed business strategies. To manage these risks, firms conduct thorough research, develop contingency plans, and build strong relationships with local partners. For example, a firm entering a new market might invest in cultural training for its employees, analyze the political and economic risks of the country, and hedge against currency fluctuations.</p> Signup and view all the answers

<p>Focal firms</p> Signup and view all the answers

<p>Multinational enterprise</p> Signup and view all the answers

<p>A firm from Russia that is rapidly growing in the communications industry</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>MNEs are large companies with substantial resources operating across multiple countries through subsidiaries and affiliates. SMEs are smaller businesses with fewer employees that may not have as extensive global operations. Key differences include size, resources, and global reach. MNEs often engage in foreign direct investment (FDI), while SMEs may primarily focus on exporting.</p> Signup and view all the answers

<p>Firms internationalize for strategic and reactive reasons. 1) Strategic: Market diversification: Expanding into new markets to reduce risk. Example: A company selling tech products expands into a new country to reduce dependence on its home market. 2) Strategic: Increased margins and profits: Entering markets with less competition and high demand. Example: A company selling high-end furniture expands into a country with untapped demand. 3) Strategic: New ideas and efficiency: Gaining knowledge and experience from foreign markets. Example: A company adopts lean manufacturing practices after observing a successful Japanese manufacturer. 4) Strategic: Access to resources: Utilizing cheaper labor or raw materials. Example: Clothing manufacturer relocating to a country with lower labor costs. 5) Reactive: Responding to competitors: Expanding to compete with rivals in their home market. Example: A company enters a new market to prevent a competitor from gaining dominance.</p> Signup and view all the answers

<p>International trade and investment have experienced unprecedented decline</p> Signup and view all the answers