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53 Cards in this Set
- Front
- Back
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Foreign portfolio investment |
Purchasing stocks, bonds, or financial instruments. Looking for dividends and diversifying investments |
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Global Sourcing |
Process of buying equipment, capital goods, raw materials, or services around the world |
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Value Added |
Amount of worth that is added to a product as it is processed. |
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Licensing Agreement |
Gives a company permission to use a product, service, brand name, or patent in exchange for fee or royalty |
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Exclusive Distribution Rights |
Only distributor in an area |
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Franchise |
Agreement to use a company's name, services, product, and marketing |
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Joint Venture |
Occurs when two businesses, one of which is in a foreign country, form a new company with shared partnership |
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Foreign Subsidiaries |
Also known as wholly owned subsidiary, exists when a parent company allows a branch of its company, in another country, to be run as an individual entity |
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Protectionism |
Shielding against foreign competition |
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Trade Quota |
Government imposed limit on the amount that can be imported in an amount of time |
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Trade Embargo |
Banning trade on a specific product or with a specific country |
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Trade Sanctions
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Used to sway or coerce a country's government |
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Winners of High Canadian Dollar |
Importers, Canadian Travelers, Major league sports teams |
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Losers |
Exporters, Canadian tourism, Canadian retailers |
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Floating Rate |
No fixed currency rate |
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Factors Affecting Exchange Rate |
-Inflation -Unemployment -GDP -Trade surplus/deficit -Politics -Hard/Soft currency (ease of conversion) |
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Currency Speculation |
Buying, holding, selling foreign currency in the anticipation of its value changing |
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Market Economy |
Capitalism or private enterprise -Allowed to make profit -Own private property -Competition is promoted |
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Centrally Planned Economy |
Command or communism -No private property -No profit -Limited competition |
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Mixed Economy |
Canada |
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Absolute Advantage |
Country can make a product or service more productively than other countries |
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Comparative Advantage |
Having a lower opportunity cost |
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Role of Government in International Business |
Import/export laws, Tariffs, Trade organizations, immigration laws, monetary policy, fiscal policy, tax treaties, education, military, environmental, embargoes, infrastructure |
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Lobbying |
Process through which companies or people influence government officials and persuade them to endorse public policy favorable to these groups |
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Pros of International Trade |
Outsourcing Lower prices improved human rights increased productivity innovation better jobs increased capital flow |
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Cons of International Trade |
Lost Canadian jobs and productivity Exploitation of cheap labor Increased pollution Unhealthy products Increase in income gap Spread of disease Influence of MNCs on governments |
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Global Strategy |
World is one big market |
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Multidomestic Strategy |
Local culture effective when cultural differences are promient |
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Transnational Strategy |
Mix of both |
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Trade Agreement |
Enforceable treaty between two or more countries that addresses the movement of goods and services, eliminates trade barriers, establishes terms of trade, and encourages foreign investment |
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Pros and Cons of NAFTA |
Pros - More high paying jobs - Freer flow of goods and services - Better resources - Increased trade output - More jobs Cons - Lost manufacturing jobs - Wage gap - Farmers lost jobs - Low quality jobs in Mexico - Loss of culture |
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Pros and Cons of Euro |
Pros - Less exchange rate fluctuation - Price transparency - Elimination of transaction costs - Easy billing - Increased markets - Economic Stability - Enhanced labour movement Cons - Initial costs - Lack of national control - Loss of tradition |
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Benefits of CSR |
- Companies use CSR as a marketing tool - Dissuades governments from implementing regulations that might interfere - Attract and retain good employees |
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Criticisms of CSR |
- Costs money - Spend time and money - Distract customers from bad company - Doesn't change international practices |
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Primary Stakeholders |
Customers, competitors, employees, unions, government, suppliers |
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Secondary Stakeholders |
Community, NGOs, media, political parties |
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Business Ethics |
- Set of rules or guidelines that management or individuals follow to make their decisions for their company |
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Ethical Imperialism |
Certain universal truths or values are standard across all cultures |
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Cultural Relativism |
Values of different cultures should be respected, as ethics of one culture are not seen as better than those of another |
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Centralized Strategy |
All manufacturing and marketing in one location |
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Decentralized Strategy |
Set up manufacturing plant in another nation, or hire a sales force there, or even license its brand to a local manufacturer |
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Branch Plant |
Most expensive market entry strategy Lower shipping costs Import regulation not an issue Product modifications are easier |
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Licensing Agreemetns |
Manufacturing agreement: Paying for brand identification Distribution agreement: selling in different locations Franchising agreement: Subway |
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Acquisitions |
- Most effective way to deal with competition - Buy out company you're competing with |
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Ethnocenrism |
Belief that your own culture, values, beliefs, and customs represent the right way of doing things, and that value systems of other countries are not important |
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Competitive Advantage |
Ability of one company to produce a product more cheaply an another company - Lower costs of production - Lower distribution costs - Product differentiation - Brand equity E.g Canada's Banks, culture, tech |
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Tax Credit |
Specific amount that is offered by government to promote local business |
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Reasons to Invest in Canada |
- Supportive business environment - Gateway to the world - Infrastructure advantage - Outstanding employees - Cultural diversity - Great place to live |
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Productivity |
Amount of output with respect to the amount of input |
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Subprime mortgages |
Risky stuff fam |
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Collateral |
Asset used to guarantee a loan |
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Foreclose |
Bank taking house back |
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Feed-in Tariff |
Encourage adoption or renewable energy sources. Any company that produces renewable energy will have a guaranteed distribution network and can price it higher than normal rates |
