International Business Overview

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is one primary purpose of protectionism in Canada?

To eliminate all forms of taxation on imports

To reduce the cost of imports for consumers

To protect domestic industries and consumers from global competition (correct)

To encourage foreign investment in Canadian industries

What are tariffs commonly referred to as?

Customs duties (correct)

Trade barriers

Import quotas

Subsidies

How do tariffs benefit Canadian businesses?

They lower production costs for Canadian manufacturers

They make imported goods more expensive, favoring local options (correct)

They eliminate competition from foreign markets

They provide direct financial support to exporters

What role does Finance Canada play concerning tariffs?

It monitors and develops tariff policies as needed Signup and view all the answers

What is a potential negative consequence of protectionism for consumers?

Higher prices due to reduced competition Signup and view all the answers

What defines an international transaction?

Selling items produced in other countries Signup and view all the answers

Which of the following is NOT considered a benefit of international business?

Increased consumer prices Signup and view all the answers

What is a characteristic of a global product?

It is standardized and offered in the same form everywhere Signup and view all the answers

What is offshore outsourcing primarily concerned with?

Hiring service providers from countries with lower labor costs Signup and view all the answers

Which factor is NOT part of the Five Ps of Production?

Partnership Signup and view all the answers

Which is a significant concern regarding offshore outsourcing?

Human rights issues and labor abuses Signup and view all the answers

What does environmental degradation refer to?

Overconsumption of natural resources Signup and view all the answers

How do consumer action groups help toward labor issues?

They seek to improve working conditions Signup and view all the answers

Which of the following examples illustrates a domestic transaction?

Visiting a local shop and buying a bike produced in Canada Signup and view all the answers

What must a company understand before selling internationally?

The wants and needs of international consumers Signup and view all the answers

Study Notes

International Business

International business involves creating, shipping, and selling goods and services across national borders.
This is often called international trade or foreign trade.
Participation contributes to the global economy.
Domestic transactions involve buying products made in the same country.
International transactions involve buying items from other countries, even if purchased at a local store.

Benefits of International Business

Access to markets: Understanding consumer needs and wants is essential before selling internationally.
Standardized products (global products) are offered the same way in all countries. (e.g., packaged food is NOT a global product)
Cheaper labor costs in other countries.
Improved product quality by utilizing resources globally (e.g., car manufacturing).
Increased potential for sales and increased production, as international markets grow.

The Five Ps of Production

Product: The good or service offered.
Price: The cost of the product, which can vary by country.
Promotion: Technology allows easy global promotion.
Proximity: Distance from the purchase location/production location.
Preference: Some countries specialize in quality goods.

The Cost of International Business and Tariffs

Costs of International Trade

International business has hidden costs (social costs).
Social costs include offshoring, outsourcing, human rights abuses, labor abuses, and environmental degradation.

Offshore Outsourcing

Offshoring outsourcing involves hiring providers in countries with lower labor costs.
This often moves jobs from a company's internal production to an external business specializing in the operation.

Human Rights Issues and Labor Abuses

Human rights issues and labor abuses are ethical concerns with offshoring.
Poorer countries sometimes experience widespread workplace abuses.
Child labor is a significant concern.
- Child labor is defined as employment under age 16.
- The International Labour Organization (ILO) promotes social justice and worker rights.
Consumer action groups aim to improve conditions.

Environmental Degradation

Sustainable development aims to meet present needs without harming future generations.
Environmental degradation occurs when nature consumes resources faster than they regenerate.

Protectionism

Governments (e.g., Canada) use barriers to protect domestic businesses and consumers.
Barriers protect local industries facing global competition.
Barriers protect against imports not meeting Canadian regulations.

Tariffs

Tariffs (customs duties) are taxes on imported goods.
Finance Canada develops tariff policies.
Tariffs make imported goods more expensive, boosting Canadian businesses.
Tariffs make Canadian goods more affordable for consumers.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Explore the fundamentals of international business, including its importance in the global economy and the benefits of engaging in international trade. Understand key concepts such as market access, standardized products, and the impact of production efficiencies. This quiz will test your knowledge of the Five Ps of Production and overall international business strategies.