Intro To Business Chapter 3 - Mr Rvsd

Front 1

Joint Venture

Back 1

The sharing of the coat and operating of a business between a foreign company and a local partner.

Front 2

Association of Southeast Asian Nations (ASEAN)

Back 2

A trade alliance that promotes trade and economic integration among member nations in Southeast Asia.

Front 3

Countertrade Agreements

Back 3

Foreign trade agreements that involves bartering products for other products instead of for currency.

Front 4

International Monetary Fund (IMF)

Back 4

Organization established in 1947 to promotes trades among member nations by eliminating trade barriers and fostering financial cooperation.

Front 5

Franchising

Back 5

A form of licensing in which a company (the franchiser) agrees to provide a franchisee a name, logo, method of operation, advertising, products and other elements associated with a franchisers business in return for a financial commitment and the agreement to conduct business in accordance with the franchisers standards of operations.

Front 6

Licensing

Back 6

A trade agreement in which one company (the licensor) allows another company (the licensee) to use the company name, products, patent, brands, trademark, and raw materials, in exchange for a fee or royalty.

Front 7

Quota

Back 7

A restriction on the number of units of a particular products that can be imported into a country.

Front 8

Trade Deficit

Back 8

A nations negative balance of trade, which exist when the country imports more than it exports.

Front 9

Asia-Pacific Economics Cooperations (APEC)

Back 9

an international trade alliance that promotes open trade and economic and technical cooperation among member nations.

Front 10

Exchange Rate

Back 10

The ratio which one nations currency can be exchanged for another nations currency.

Front 11

North American Free Trade Agreement (NAFTA)

Back 11

Agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the United States, and Mexico.

 Has been controversial, but has created new business opportunities with fewer barriers than before.


Front 12

Import Tariff

Back 12

A tax levied by a nations on goods imported into the country.

Front 13

World Trade Organization (WTO)

Back 13

International organization dealing with the rules of trade between nations.

Front 14

Direct Investment

Back 14

The ownership of overseas facilities.

Front 15

Embargo

Back 15

A prohibition on trade in a particular product.

Front 16

Strategic Alliance

Back 16

A partnership formed to create competitive advantage on a worldwide basis,

Front 17

International Business

Back 17

The buying, selling, and trading of goods and services across national boundaries.

Front 18

Outsourcing

Back 18

The transferring of manufacturing or other task----such as data processing----to countries where labor and supplies are less expensive.

Front 19

Dumping

Back 19

The act of a county or business selling products at less than what it costs to produce it.

Front 20

Contract Manufacturing

Back 20

The hiring of a foreign company to produce a specified volume of the initiating company's product to specification; the final product carries the domestic firms name.

Front 21

Exchange Controls

Back 21

Regulations that that restrict the amount of currency that can be bought or sold.

Front 22

World Bank

Back 22

(International Bank for Reconstruction and Development)
An organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries.

Front 23

Balance of Payments

Back 23

The difference between the flow of money into and out of a country.

Front 24

Infrastructure

Back 24

The physical facilities that supports a country's economic activities.

Examples: railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication systems, and commercial distribution systems.

Front 25

Absolute Advantage

Back 25

A monopoly that exists when country is the only source of an item, the only producer of an item, or the most efficient producer of an item.

Front 26

Offshoring

Back 26

The relocation of business processes by a company or subsidiary to another country. Offshoring is different than outsourcing because the company retains control of the offshored processes.

Front 27

Multinational Corportarion

Back 27

A corporation that operates on a worldwide scales, without significant ties any one nation or region.

Front 28

Multinational Strategy

Back 28

A plan used by international companies, that involves customizing products, promotion and distribution according to cultural, technological, regional, and national differences.

Front 29

European Union (EU)

Back 29

A union of European nations established in 1959 to promotes trade among its members.

One of the largest single markets today.

Front 30

Trading company

Back 30

A firm that buys goods in one country and sells them to buyers in another country.

Front 31

Global Strategy (Globalization)

Back 31

A strategy that involves standardizing products for whole world as if it were a single entity.

Front 32

Importing

Back 32

The purchase of goods and services from foreign sources.

Front 33

Comparative Advantage

Back 33

The basis of the most international trade.
When a country specialized in products that it can supply more efficiently or at a lower cost than it can produce other items.

Front 34

Balance of Trade

Back 34

The differences in value between a nations exports and its imports.

Front 35

Exproting

Back 35

The sale of goods and services to foreign markets.

Front 36

Cartel

Back 36

A group of firms or nations that agrees to act as a monopoly and not compete with each other, in order to generate a competitive advantage in world markets

Front 37

General Agreement on Tariffs and Trade (GATT)

Back 37

A trade agreement, originally signed by 23 nations in 1947, that provides a forum for tariff negotiations and a place where international trade problems could be discussed and resolved.

Front 38

opportunity cost

Back 38

The opportunity of giving up the second-best choice when making a decision.

Front 39

trade surplus

Back 39

Overage that occurs when the total value of a nation’s exports is higher than the total value of its imports.

Front 40

trade deficit

Back 40

Shortfall that occurs when the total value of a nation’s imports is higher than the total value of its exports.

Front 41

balance of payments surplus

Back 41

Overage that occurs when more money flows into a nation than out of that nation.

Front 42

balance of payments deficit

Back 42

Shortfall that occurs when more money flows out of a nation than into that nation.

Front 43

countertrade

Back 43

International trade that involves the barter of products for products rather than for currency.

Front 44

foreign outsourcing

Back 44

(also contract manufacturing) Contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production.

Front 45

foreign licensing

Back 45

Authority granted by a domestic firm to a foreign firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.

Front 46

foreign franchising

Back 46

A specialized type of foreign licensing in which a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements.

Front 47

partnership

Back 47

A voluntary agreement under which two or more people act as co-owners of a business for profit.

Front 48

sociocultural

Back 48

differences Differences among cultures in language, attitudes, and values.

Front 49

protectionism

Back 49

National policies designed to restrict international trade, usually with the goal of protecting domestic businesses.

Front 50

tariffs

Back 50

Taxes levied against imports. quotas Limitations on the amount of specific products that may be imported from certain countries during a given time period.

Front 51

voluntary export restraints (VERs)

Back 51

- Limitations on the amount of specific products that one nation will export to another nation.

Front 52

free trade

Back 52

- The unrestricted movement of goods and services across international borders.

Front 53

trading bloc

Back 53

- A group of countries that have reduced or even eliminated tariffs, allowing for the free flow of goods among the member nations.

Front 54

common market

Back 54

- A group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations.

Front 55

Almost half the world over three billion people

Back 55

- live on less than $2.50 a day. —GlobalIssues.org

Front 56

Fixed Exchange Rate

Back 56

Fixed value remains constant by purchasing their own currency = artificial demand.

Front 57

Floating Exchange Rate

Back 57

Value is dependent on supply & demand

Front 58

Strong Currency example & causes.

Back 58

$1 = €2 euros

• causes weaker Tourism in US

• US exports more expensive in euro market.

• Imports to US less expensive

• encourage domestic firms to open business in foreign market.

Front 59

Weak Currency example & sample causes.

Back 59

$1= €0.5 euro ($500 = €250)

causes

• stronger US tourism

• stronger US exports

• lower foreign imports

• foreign firms open business in US.

Front 60

External Business factors

Back 60

Social: language, lifestyle, preferences

Economic: population, infrastructure, per capita income (spending power).

Political & Legal: govt set conditions, restricted quotas, tariffs (tax) on imports. Subsidy, reverse tax- asst domestic co. To compete. Embargo- prevent goods to come in or out.