Competency 1 OA Review C211 Econ

Actions taken in one market to hurt rivals in another related market.

A company's dependence on competing across multiple markets.

The degree to which companies compete in the same market areas.

Companies avoid aggressive actions in order to avoid retaliation in related markets.

Consumer perception of a product influenced by the country where it was made.

A strategy to manage risks associated with exchange rate fluctuations.

A fixed exchange rate is set between a country's currency and another currency or a basket of currencies.

Actions taken to minimize financial risk from exchange rate changes.

Exchanging one currency for another, often for a specific period.

The disadvantages to a home country from foreign direct investment.

This view emphasizes a company's internal strengths and weaknesses, focusing on how to leverage unique resources to achieve competitive advantage in global markets.

This view emphasizes external factors like formal institutions (laws, regulations) and informal institutions (culture, ethics) that shape how companies operate in global markets.

The resource-based view focuses on a company's internal strengths, while the institution-based view focuses on external factors influencing a company's success.

This is a company's superior ability to generate value and outperform competitors in global markets.

This refers to all factors, both internal and external, that shape how companies compete and succeed in the global marketplace.

This view suggests that the importance of resources varies over time, fluctuating like a pendulum between being a source of competitive advantage and being less important.

This perspective argues that companies entering foreign markets need to leverage their internal resources (assets, capabilities, and knowledge) to overcome challenges and gain a competitive edge.

Foreign companies entering new markets face various regulations, trade restrictions, and investment hurdles that can impact their success.

Companies seeking to succeed in foreign markets need to find ways to differentiate themselves and offer something unique that customers value.

The resource-based view emphasizes that companies must carefully assess their own strengths and weaknesses, and how these resources can be used to overcome challenges presented by foreign markets.

A currency's value is allowed to fluctuate freely based on market forces (supply and demand).

A country sets a fixed value for its currency against another currency or a basket of currencies.

A country allows its currency to fluctuate but intervenes to moderate fluctuations.

A system where a country's currency is backed by gold, with its value tied to the price of gold.

A flexible exchange rate allows a country's currency to adjust to market conditions, promoting trade and economic stability.

A fixed exchange rate can limit a country's ability to manage its own monetary policy, potentially hindering economic growth.

A managed float allows a country to control exchange rate fluctuations while maintaining some flexibility to adjust to economic conditions.

A managed float allows for some fluctuations, while a fixed exchange rate keeps the currency value stable.

The disadvantages faced by companies when entering foreign markets, stemming from their unfamiliarity with the local environment (e.g., culture, regulations, business practices).

Strategies companies use to minimize the disadvantages of operating in unfamiliar markets, such as adapting to local culture, building strong relationships with local partners, and demonstrating legitimacy.

A crucial aspect of overcoming the liability of foreignness; involves recognizing and adapting to the unique cultural norms, values, and beliefs of a new market.

Companies seeking to succeed in a foreign market need to gain legitimacy in the eyes of local stakeholders (e.g., government, consumers, businesses), ensuring their actions are perceived as ethical and appropriate.

The belief that the total wealth in the world is fixed, leading to a competitive mindset where one party's gain is another's loss.

Companies venturing into international markets face obstacles, including cultural differences, regulatory barriers, and competition from local players.

Companies can gain a competitive edge in global markets by utilizing their unique strengths and resources, adapting to local conditions, and building strong relationships.

Companies entering foreign markets need to understand and adapt to the differing formal (laws) and informal (culture, ethics) institutions that govern business practices.