International Commerce Overview
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What is a primary benefit of engaging in international trade?

  • Economic dependence on developed nations
  • Increased costs per unit of production
  • Environmental degradation
  • Reduction in the cost per unit of production (correct)

    • International commerce only has economic benefits and no cultural impact.

    False (B)

    Name one drawback of international commerce.

    Economic dependence on developed nations

    International trade agreements, like the EU and USMCA, help to ease ______ within member states.

    <p>cross-border flows</p> Signup and view all the answers

    Match the following trade agreements with their characteristics:

    <p>Unilateral Trade Preference Schemes = Allows duty-free access for developing countries' products Bilateral Trade Agreements = Reciprocal lowering of tariffs between countries Regional Trade Blocs = Integration of regulatory policies among member states Multilateral Trade Agreements = Involves multiple countries lowering tariffs together</p> Signup and view all the answers

    Which of the following is NOT a key player in international commerce?

    <p>Local NGOs (C)</p> Signup and view all the answers

    Trade imbalances can result from international commerce.

    <p>True (A)</p> Signup and view all the answers

    What is one employment opportunity created by international trade?

    <p>Jobs in the trade sector or supporting industries</p> Signup and view all the answers

    What is the term for selling a currency on the belief that its value will decrease?

    <p>Going short (A)</p> Signup and view all the answers

    The ask price is what a trader pays to sell a currency pair.

    <p>False (B)</p> Signup and view all the answers

    What does the term 'spread' refer to in Forex trading?

    <p>The difference between the buying price and the selling price.</p> Signup and view all the answers

    E-commerce is the buying and selling of goods and services over the _______.

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

    Match the currency pairs with their corresponding currencies:

    <p>EUR/USD = Euro and U.S. dollar GBP/USD = British pound and U.S. dollar USD/JPY = U.S. dollar and Japanese yen AUD/USD = Australian dollar and U.S. dollar</p> Signup and view all the answers

    Which of the following is an advantage of e-commerce?

    <p>Convenience (C)</p> Signup and view all the answers

    E-commerce can entirely replace brick-and-mortar stores.

    <p>False (B)</p> Signup and view all the answers

    Which company aims to use 100% renewable electricity at its U.S. sites by 2025?

    <p>General Motors (A)</p> Signup and view all the answers

    Name one type of market segment that e-commerce operates in.

    <p>Business-to-business, business-to-consumer, consumer-to-consumer, or consumer-to-business.</p> Signup and view all the answers

    ISO 26000 can be certified as a formal standard.

    <p>False (B)</p> Signup and view all the answers

    What is the goal of Home Depot in terms of spending with diverse suppliers by 2025?

    <p>$5 billion</p> Signup and view all the answers

    The three primary factors affecting a company's choice of international market entry strategy are marketing, sourcing, and _____ .

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

    Match the companies to their recognition or action:

    <p>Home Depot = Invested 1 million hours in employee training General Motors = Won the Sustainability Leadership Award ISO 26000 = Guidance for corporate social responsibility Hewlett-Packard Enterprise = Top-ranked CSR company in 2023</p> Signup and view all the answers

    What is the primary purpose of a market entry strategy?

    <p>To minimize risk while maximizing success (C)</p> Signup and view all the answers

    Accenture was recognized as a top-ranked company for corporate social responsibility in 2023.

    <p>True (A)</p> Signup and view all the answers

    How much did General Motors provide in grants to U.S. nonprofits?

    <p>$60 million</p> Signup and view all the answers

    Which of the following is an example of a B2C business?

    <p>Kylie Cosmetics (A)</p> Signup and view all the answers

    Alibaba is primarily a B2C ecommerce platform.

    <p>False (B)</p> Signup and view all the answers

    What type of ecommerce is Vinted classified as?

    <p>Consumer-to-Consumer (C2C)</p> Signup and view all the answers

    Allbirds is known for selling shoes directly to ______.

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

    Match the following companies with their respective ecommerce types:

    <p>Kylie Cosmetics = B2C Costco = B2B Vinted = C2C HubSpot = B2B</p> Signup and view all the answers

    Which of the following companies manufactures its own clothing and sells directly to consumers?

    <p>Bombas (B)</p> Signup and view all the answers

    Consumer-to-Consumer ecommerce platforms allow sellers to be businesses.

    <p>False (B)</p> Signup and view all the answers

    What type of ecommerce does HubSpot primarily engage in?

    <p>Business-to-Business (B2B)</p> Signup and view all the answers

    What is the primary purpose of outsourcing?

    <p>To hire a company for certain business operations (D)</p> Signup and view all the answers

    Greenfield investments always guarantee success for companies entering new markets.

    <p>False (B)</p> Signup and view all the answers

    What does the term 'turnkey' refer to in project management?

    <p>A fully operational facility ready for use.</p> Signup and view all the answers

    The _____ Forex Market involves an agreement to exchange currencies at a future date at an agreed-upon price.

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

    Which of the following is a primary function of the foreign exchange market?

    <p>Facilitating currency conversions (B)</p> Signup and view all the answers

    Match the Forex market types with their descriptions:

    <p>Spot Market = Immediate exchange of currencies Forward Market = Agreement to exchange currencies in the future Futures Market = Regulated market with agreements on exchange rates Options Market = Allows the right but not the obligation to exchange currencies</p> Signup and view all the answers

    Hedging is a way to speculate on future currency movements without any risk.

    <p>False (B)</p> Signup and view all the answers

    What does it mean to 'go long' in Forex trading?

    <p>Buying a currency believing its value will increase.</p> Signup and view all the answers

    Which of the following is NOT one of the five phases of workforce empowerment?

    <p>Organizing (A)</p> Signup and view all the answers

    Cultural distance refers to the similarities between your culture and the local culture of your foreign market.

    <p>False (B)</p> Signup and view all the answers

    What is corporate social responsibility (CSR)?

    <p>A self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public.</p> Signup and view all the answers

    The language barrier is the most common element that hinders __________ in international business.

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

    Match the types of corporate social responsibility (CSR) with their descriptions:

    <p>Environmental responsibility = Reducing negative environmental impact Ethical responsibility = Ensuring fairness and honesty in business practices Philanthropic responsibility = Supporting community initiatives and charitable causes Financial responsibility = Maintaining sound financial practices while benefiting society</p> Signup and view all the answers

    Which of the following cultural barriers refers to the belief that home rules apply abroad?

    <p>Parochialism (D)</p> Signup and view all the answers

    Emotionalism is not an important factor affecting international business.

    <p>False (B)</p> Signup and view all the answers

    Name one company that emphasizes corporate social responsibility as a priority.

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

    Study Notes

    International Commerce

    • International commerce involves the exchange of goods, services, capital, technology, and intellectual property across borders.
    • Challenges include inequalities, cultural differences, and legal complexities.
    • Key players include multinational corporations, governments, and international organizations.
    • Activities encompass imports/exports, foreign direct investment, cross-border logistics, trade finance, intellectual property licensing, and contract manufacturing.

    Benefits of International Commerce

    • Drives economic growth and development.
    • Provides access to a wider range of goods and services.
    • Encourages innovation and technology transfer.
    • Allows economies of scale by expanding operations.
    • Diversifies markets to reduce dependency on a single region or economy.

    Drawbacks of International Commerce

    • Economic dependence on developed nations.
    • Exploitation of labor.
    • Potential job losses in certain sectors.
    • Trade imbalances.
    • Cultural homogenization.
    • Environmental impact.
    • Vulnerability to global economic shifts.
    • Intellectual property risks.
    • Complex regulatory challenges.
    • Currency fluctuations.
    • Lax quality control and standards.

    International Trade Agreements

    • Types include unilateral trade preference schemes (allowing preferential duty-free or reduced duty access to imports from developing countries).
    • Regional trade blocs (increased integration on regulatory policies, product standards, and customs procedures between member states).
    • Bilateral/Multilateral trade agreements (reciprocal lowering of tariffs on traded goods).

    International Trade Policies and Regulations

    • Import policies: Tariffs to increase the price of imported goods compared to domestic products/quotas to limit import quantities. Regulations may also control import compliance like safety standards, testing & certifications.
    • Export policies: Export licenses for controlled items (defense, certain chemicals). Export subsidies (tax breaks, financing, and incentives). Export quotas are quantitative limits set on certain exported goods.
    • Trade remedies: Anti-dumping duties to combat unfairly low prices/countervailing duties to address subsidized imported goods.
    • Focus on environmental, social, and governance (ESG) factors in business practices.
    • Increased cybersecurity concerns in commerce.
    • Shifts towards friend-shoring and onshoring (producing goods domestically or in allied nations instead of overseas).
    • Diversification of manufacturing locations.
    • Adoption of real-time data analytics.
    • Technological investment acceleration.

    Payment Methods

    • Letters of credit (LCs) are widely used to guarantee payment.
    • Wire transfers are faster for transactions but offer less protection.
    • Documentary collections use a bank as an intermediary but don't guarantee payment

    ###Supply Chain Management Needs

    • Successful supply chains need people, processes, and technologies.
    • Processes should focus on satisfying customers (sourcing, distribution, transportation, warehousing, and sales).
    • Cost-effective strategies include Just-in-Time (JIT) manufacturing, lean manufacturing, and total quality management.

    Market Entry Strategies

    • Exporting (direct or indirect)
    • Piggyback (using existing export channels)
    • Countertrade (barter system)
    • Licensing (transferring the right to use a product)
    • Joint ventures
    • Greenfield investments
    • Company ownership
    • Franchising
    • Outsourcing

    Foreign Exchange Market

    • The forex market is an over-the-counter market where currencies are exchanged.
    • Types: spot, forward, and futures markets.
    • Functions include facilitating currency conversions, managing foreign exchange risk, and providing speculation opportunities to investors/traders.

    Electronic Commerce (E-commerce)

    • E-commerce involves buying and selling goods and services over the internet.
    • Types include business-to-consumer (B2C), business-to-business (B2B), business-to-government (B2G), consumer-to-consumer (C2C), and consumer-to-business (C2B).
    • E-commerce advantages: convenience, increased selection, and potentially lower start-up costs.
    • Disadvantages: limited customer service, inability to physically touch products, and reliance on technology.
    • Revenue models include dropshipping, white labeling, wholesaling, private labeling, and subscription services.

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    Description

    This quiz explores the fundamentals of international commerce, highlighting its key players, benefits, and drawbacks. It discusses the effects of cross-border trade on economic growth and the complexities involved in such exchanges. Test your knowledge on this vital aspect of global business operations.

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