University:
Columbia University
Course:
UN 1105 | Principles of Economics
Academic year:

2023
Views:

106

Pages:

3
Author:

Adam B.

9/216/22 Chapter 3 Global buisness - the basis for international buisness - what is Global or international buisness? - international buisness: refers to all buisness activities that involve exchanges across national boundaries. a company is engaged in international buisness when H buys or sell's from a foreign country. the basis for international buisness • Importing •exporting - importing - purchasing raw materials or products in other nations + bringing them into ones own country. - exporting •Selling Shipping raw materials or products to other nations. -Why do countries trade, import, or export. •because no national economy produces all the goods services that people need want. • also because the international market allows for the a cquisition of materials goods from all over the world. -some countries have "absolute advantage" - absolute advantage: • the ability to produce or provide a specific product more effciently than any other nation -some countries have a "comparative advantage: •the ability to produce a specific product more efficiently than any other products. balance of trade: • refers to the total valve of a nations exports minus the total of its imports over Some period of time. -trade deficit: • a negative cunfavorable) balance of trade where the imports exceed exports in valve licensing franchising licensing a contractual agreement im which one firm permits another to produce market its product + use its brand name in return for a royalty or other compensation advantages It provides a simple method for expanding into a foreign market with virtually no investiment - disadvantage •If licensee does not maintain licensors product Standard the product image may be damaged -franchising: • a contractual arrangment for an individual or organization to opperate facilities, typically Stores, on behalf of another. Methods of entering international buisness -Joint venture • partnership formed to achieve a Specific goal or to operate for a specific period of time may be used to produce market an existing product in a foreign nation or to develop a whole new product -aavantage: • Provides immediate market knowledge access, reducea risk. control over product attributes -disadvantages: • established across national borders can become extremely riskY generally require a very high level of commitment from all parties involved -Strategic alliance: • an arrangement between 2 companies to under- take a mutually beneficial project white each retains its independence •partnerships formed to create competitive advantages on a worldwide basis. - multinational enterprise • firm that operates in many countries on a worlawige scale without ties to any specific nation/region • a multinational corporation is one that has buisness offices + operations in a or more countries in the world.