International Trade Concepts and Strategies

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Questions and Answers

SDN BHD was invented to overcome high capital costs in the interwar years and involves _________ decision making.

decentralising

Tariffs impose a tax by the government on imports and exports of ________.

goods

An ________ is an official ban on trade with a particular country.

embargo

Joint ventures involve a type of equity arrangement where partners may share ________.

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

Vertical integration allows a firm to take ownership of ________, distributors, or retail locations.

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

Flashcards

Vertical Integration

A business strategy where a firm controls its suppliers, distributors, or retail locations. This gives them more control over their supply chain, which often leads to increased efficiency and lower costs.

Joint Ventures

A type of investment (Foreign Direct Investment - FDI) where companies from different countries collaborate to share ownership, technology, assets, or labor. Advantages include access to advanced technology or expertise in a particular market.

Tariffs

A tax imposed by governments on goods imported or exported. Tariffs function as a source of revenue and help regulate foreign trade policy to protect domestic industries.

Embargo

A complete ban on trade with a specific country. This restriction on trade serves as a powerful tool in international relations, often used as a form of political or economic pressure.

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SDN BHD (Short for 'Decentralized Supervise Network Branch Headquarter')

A business model that aimed to overcome high capital costs during the interwar years. It involves decentralizing decision-making by giving more power to individual branches, departments, or employees.

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Study Notes

SDN BHD

Invented to overcome high capital costs in interwar years
Focuses on technology and knowledge
Decentralizes decision-making

Tariffs

Taxes imposed by governments on imports/exports of goods
Source of revenue for governments
Regulate foreign trade policies to protect domestic industries

Embargo

Official ban on trade with a particular country
Trade restriction
Example: USA imposed embargo on Cuba (1960), forbidding most American exports and imports with Cuba

Joint Ventures

Type of equity arrangement (Foreign Direct Investment - FDI)
Shares ownership
Transfers technology, assets, and labor
Advantage over high-tech or market knowledge

Vertical Integration

Firm takes ownership of suppliers, distributors, or retail locations
Greater control over the supply chain
Increased efficiency and reduced costs

Economies of Scale

Obtaining lower costs by increasing a firm's production

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Description

This quiz covers essential concepts in international trade, including tariffs, embargoes, and joint ventures. You'll also learn about capital costs, vertical integration, and economies of scale, highlighting their importance in a global business environment. Test your knowledge and understanding of these key trade strategies.