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International business exclusively involves trading finished goods across borders.
International business exclusively involves trading finished goods across borders.
False (B)
Operating a manufacturing plant in another country to leverage local resources is considered an international business activity.
Operating a manufacturing plant in another country to leverage local resources is considered an international business activity.
True (A)
International business transactions solely involve the exchange of goods between parties.
International business transactions solely involve the exchange of goods between parties.
False (B)
The term 'international business' is synonymous with 'globalization.'
The term 'international business' is synonymous with 'globalization.'
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Understanding international business is paramount for success in domestic markets, particularly in today's interconnected global economy.
Understanding international business is paramount for success in domestic markets, particularly in today's interconnected global economy.
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Small businesses cannot engage in international business activities due to limited resources.
Small businesses cannot engage in international business activities due to limited resources.
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Cultural literacy is essential for individuals working in international business, as it enables them to navigate diverse markets and cultures.
Cultural literacy is essential for individuals working in international business, as it enables them to navigate diverse markets and cultures.
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Understanding international business is solely relevant to those employed by foreign-owned companies.
Understanding international business is solely relevant to those employed by foreign-owned companies.
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International trade can be divided into two categories: trade in goods and trade in services.
International trade can be divided into two categories: trade in goods and trade in services.
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Foreign Direct Investment (FDI) is a type of international investment made for the purpose of actively controlling property assets or companies located in a foreign country.
Foreign Direct Investment (FDI) is a type of international investment made for the purpose of actively controlling property assets or companies located in a foreign country.
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Exports of goods and services are a percentage of the host country's gross domestic product (GDP).
Exports of goods and services are a percentage of the host country's gross domestic product (GDP).
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In an international licensing agreement, a firm in one country can use all or some of the intellectual property of a firm in another country for a royalty payment.
In an international licensing agreement, a firm in one country can use all or some of the intellectual property of a firm in another country for a royalty payment.
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A Multinational Organization (MNO) is a type of business that operates in multiple countries and can be referred to as a Multinational Corporation (MNC) or a Multinational Enterprise (MNE).
A Multinational Organization (MNO) is a type of business that operates in multiple countries and can be referred to as a Multinational Corporation (MNC) or a Multinational Enterprise (MNE).
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In 2017, Amazon's revenue was more than four times their revenue in 2007.
In 2017, Amazon's revenue was more than four times their revenue in 2007.
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Daimler's revenue in 2017 was approximately 10% higher than their revenue in 2007.
Daimler's revenue in 2017 was approximately 10% higher than their revenue in 2007.
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In 2017, Apple's revenue was more than double that of Samsung Electronics.
In 2017, Apple's revenue was more than double that of Samsung Electronics.
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The revenue ranking of the top 10 companies in 2017 is different from the revenue ranking of the top 10 companies in 2007.
The revenue ranking of the top 10 companies in 2017 is different from the revenue ranking of the top 10 companies in 2007.
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Only two companies experienced a decline in revenue between 2007 and 2017.
Only two companies experienced a decline in revenue between 2007 and 2017.
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Glencore's revenue was greater in 2017 compared to 2007.
Glencore's revenue was greater in 2017 compared to 2007.
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Exxon Mobil's revenue in 2017 was greater than BP's revenue in 2017.
Exxon Mobil's revenue in 2017 was greater than BP's revenue in 2017.
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Sinopec Group's revenue in 2017 was less than half of State Grid's revenue in 2017.
Sinopec Group's revenue in 2017 was less than half of State Grid's revenue in 2017.
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C VS Health's revenue in 2017 is approximately 10% higher than their revenue in 2007.
C VS Health's revenue in 2017 is approximately 10% higher than their revenue in 2007.
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The content indicates that the dissemination or sale of any part of the work is permitted.
The content indicates that the dissemination or sale of any part of the work is permitted.
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International business differs solely from domestic business in terms of geographic scope.
International business differs solely from domestic business in terms of geographic scope.
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The primary focus of the content is on the nuances of licensing and franchising in international business.
The primary focus of the content is on the nuances of licensing and franchising in international business.
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International licensing and franchising are completely identical in their operational frameworks.
International licensing and franchising are completely identical in their operational frameworks.
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The material emphasizes the significance of a global economy in individual lives.
The material emphasizes the significance of a global economy in individual lives.
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Merchandise imports and exports are not distinguishable from service imports and exports.
Merchandise imports and exports are not distinguishable from service imports and exports.
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The recent growth of international business activity can be attributed to a single factor.
The recent growth of international business activity can be attributed to a single factor.
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The content includes a question about the differences between visible and invisible trade.
The content includes a question about the differences between visible and invisible trade.
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International trade has a decreasing role in the economies of the world.
International trade has a decreasing role in the economies of the world.
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Foreign Direct Investment (FDI) is becoming less significant in the international economy.
Foreign Direct Investment (FDI) is becoming less significant in the international economy.
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The strategic imperatives for globalization include acquiring resources and seeking new markets.
The strategic imperatives for globalization include acquiring resources and seeking new markets.
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Technological changes do not influence the globalization process.
Technological changes do not influence the globalization process.
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The World Trade Organization (WTO) plays a role in reducing trade barriers.
The World Trade Organization (WTO) plays a role in reducing trade barriers.
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The BRIC countries refer to the largest developed nations worldwide.
The BRIC countries refer to the largest developed nations worldwide.
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The collapse of European Communism has transformed the global marketplace.
The collapse of European Communism has transformed the global marketplace.
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Emerging markets include both the BRIC countries and the Big Ten.
Emerging markets include both the BRIC countries and the Big Ten.
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Study Notes
Chapter 1: An Overview of International Business
- International business involves transactions between parties in multiple countries
- Activities include buying/selling raw materials, inputs, or finished goods across borders.
- Companies may set up operations in other countries to leverage local resources.
- Businesses may borrow money in one country to fund operations in another.
- Key terms: transactions across national borders
Learning Objectives
- Understand the meaning of international business.
- Learn the importance of understanding international business.
- Identify various forms of international business activities.
- Understand the causes of globalization.
Differences in Domestic and International Business
- Boundaries, currencies, legal systems differ between countries.
- Cultures, resources, skills and knowledge vary across countries.
- These differences impact the conduct of business in different markets.
Why Study International Business?
- Business skills for working in foreign-owned, globally-operating, or globally-affected companies
- Future competition from small businesses actively engaging internationally.
- Understanding modern business techniques (e.g., just-in-time systems).
- Cultural literacy for navigating global business.
- Other benefits include job opportunities, launching businesses, career development
International Business Activities
- Exporting and importing activities involve trading tangible goods and services across borders
- International Investments involve capital supplied by citizens of one country to citizens of another country for different purposes, such as Foreign Direct Investment and Foreign Portfolio Investment
- International Licensing entails an agreement allowing usage of intellectual property assets (e.g., brand names or tech) for a royalty.
- International Franchising is similar to licensing, but also provides brand and operational techniques to the franchisee.
- International Management Contracts involve one country contracting to handle management or operations for another.
International Business Activities: Multinational Business
- Multinational Corporations (MNCs), Multinational Enterprises (MNEs), and Multinational Organizations (MNOs) all represent a particular structure across multiple countries.
The World's Largest Corporations (2017)
- A table detailing the revenue in US dollars of the largest corporations in 2017
- Lists corporations like Walmart, State Grid, etc. and their revenue for that year.
- There is additional comparative data also.
Contemporary Causes of Globalization (Part 1)
- Globalization involves the intensification of international trade in a global economy.
- Globalization is manifested by the growing importance of Foreign Direct Investment (FDI)
Contemporary Causes of Globalization (Part 2)
- Strategic Imperatives (e.g., leveraging core competencies, acquiring resources) drive globalization.
- Environmental changes (e.g., political and technological changes) impact and facilitate globalization.
Contemporary Causes of Globalization: Political Environment
- Reduction of trade and investment barriers
- GATT & WTO roles
- Regional accords (between countries)
Contemporary Causes of Globalization: Technological Environment
- Advances in transportation technology
- Changes in communication technology
- Improvements in information processing
Contemporary Causes of Globalization: Globalization and Emerging Markets
- The collapse of European Communism, major ideological/policy changes by China and India, reduction of trade barriers contributed to the transformed global marketplace.
- Emphasis on emerging markets.
- Definition of emerging markets: BRIC countries, Big Ten, and Non-high-income countries
Table 1.2: Characteristics of Selected Emerging Markets (2017)
- A table listing characteristics (total population, total GDP, per capita GDP) of several selected emerging market countries, including BRIC and others.
Map 1.1: China's Regional Challenges
- A map highlighting the regional disparities (wealth/income differences) in China.
- A key factor that drives investment strategies.
Review Questions
- Questions regarding international business, the importance of the global economy, global trade types, and the reasons for the recent fast growth of international business activities.
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Description
Explore the key concepts of international business, including trade, globalization, and cultural literacy. This quiz covers important aspects like Foreign Direct Investment (FDI) and the difference between goods and services trade. Understand why international business is crucial for success in today's interconnected economy.
