International Business: Key Concepts
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Questions and Answers

What is international business commonly defined as?

  • The exchange of goods or services only between non-profit organizations
  • The exchange of goods or services within a country
  • The exchange of goods, services, or something of value between businesses or organizations across national borders (correct)
  • The exchange of goods or services only through online platforms
  • What type of international business involves allowing a foreign company to use a company's intellectual property in exchange for royalties?

  • Franchising
  • Importing
  • Licensing (correct)
  • Exporting
  • What type of international business involves partnering with a foreign company to undertake a specific project or business activity?

  • Licensing
  • Foreign Direct Investment (FDI)
  • Joint Ventures (correct)
  • Franchising
  • What international trade theory states that a country specializes in producing goods for which it has a lower opportunity cost?

    <p>Absolute Advantage</p> Signup and view all the answers

    What type of international business strategy involves adapting products and business models to local markets?

    <p>Multidomestic Strategy</p> Signup and view all the answers

    What international business organization promotes free trade and resolves trade disputes?

    <p>World Trade Organization (WTO)</p> Signup and view all the answers

    Study Notes

    International Business: Key Concepts

    Definition

    International business refers to the exchange of goods, services, or something of value between businesses or organizations across national borders.

    Types of International Business

    • Importing: purchasing goods or services from another country
    • Exporting: selling goods or services to another country
    • Licensing: allowing a foreign company to use a company's intellectual property in exchange for royalties
    • Franchising: allowing a foreign company to use a company's business model and brand in exchange for fees
    • Joint Ventures: partnering with a foreign company to undertake a specific project or business activity
    • Foreign Direct Investment (FDI): investing in a foreign company or establishing a subsidiary in another country

    International Business Environment

    • Cultural Environment: cultural differences and nuances that affect business operations
    • Economic Environment: economic conditions, trade policies, and government regulations that affect business
    • Political Environment: political stability, government policies, and legal frameworks that affect business
    • Technological Environment: advancements and innovations that affect business operations and competitiveness

    International Trade Theories

    • Absolute Advantage: a country specializes in producing goods for which it has a lower opportunity cost
    • Comparative Advantage: a country specializes in producing goods for which it has a lower opportunity cost relative to other countries
    • Gains from Trade: countries benefit from trade by increasing efficiency and productivity

    International Business Strategies

    • Multidomestic Strategy: adapting products and business models to local markets
    • Global Strategy: using a standardized product and business model worldwide
    • Transnational Strategy: a combination of multidomestic and global strategies, balancing local adaptation and global efficiency

    International Business Challenges

    • Cultural and Language Barriers
    • Currency and Exchange Rate Fluctuations
    • Logistical and Supply Chain Challenges
    • Political and Economic Risks
    • Compliance with International Laws and Regulations

    International Business Organizations

    • World Trade Organization (WTO): promotes free trade and resolves trade disputes
    • International Monetary Fund (IMF): promotes global economic stability and provides financial assistance
    • United Nations Conference on Trade and Development (UNCTAD): promotes international trade and development

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    Description

    Test your understanding of international business concepts, including types of international business, international business environment, trade theories, business strategies, and challenges. Learn about cultural and language barriers, currency fluctuations, and compliance with international laws and regulations.

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