CBS2113 Introduction to International Business & Ethics - Ch 06: Global Marketplaces

Flashcards covering topics in global marketplaces, including opportunities, threats, product standardization vs. localization, pricing, tax, and transportation considerations.

What is a key opportunity in the global marketplace regarding market expansion?

Access to larger customer bases and diversified markets.

What is a key opportunity in the global marketplace regarding cost efficiency?

Potential for lower production and operational costs in certain regions.

What is a key opportunity in the global marketplace regarding resource access?

Obtain specific resources or talents unavailable domestically.

What is a key opportunity in the global marketplace regarding innovation boost?

Exposure to new ideas, products, and business processes.

What is a key threat in the global marketplace related to cultural differences?

Challenges in understanding and adapting to local cultures.

What is a key threat in the global marketplace presented by foreign competition?

Local competitors might have a deeper understanding of the market.

What is a key threat in the global marketplace related to political and economic instability?

Potential for abrupt changes in foreign countries.

What is a key threat in the global marketplace concerning regulatory challenges?

Different rules, regulations, and business practices across countries.

What is the definition of product standardization strategy?

Offering a uniform product, unchanged across all markets with price adjustments for exchange rates, purchasing power and taxes.

What are the advantages of product standardization?

Economies of scale, consistent brand image, and simplified operations.

What are the disadvantages of product standardization?

It may not meet specific needs/preferences of all customer and consumer markets, and different Laws, rules, and regulations.

What is product localization (adaptation/customization)?

Adapting products to meet the needs and preferences of specific markets, with price adjustments for exchange rates, purchasing power and taxes.

What is an advantage of product localization?

Tailored approach can lead to higher local acceptance and sales.

What are the disadvantages of product localization?

Increased operational complexity & costs and potential for brand dilution.

What is the market skimming pricing strategy?

Setting a high price for a new innovative product to make substantial profits from the segment willing to pay a premium and then lower it over time to capture price sensitive markets.

What is penetration pricing?

Setting a low initial price to quickly gain market share and deter competition.

What is cost-plus pricing?

Adding a standard margin to the cost of producing the product.

What is Purchasing Power Parity (PPP)?

Setting prices based on the purchasing power of the target market.

What is competitive pricing?

Setting prices based on competitors' strategies, prices, and market trends.

What are tariffs?

Taxes imposed on imports or exports. Can impact pricing and profitability.

What is double taxation?

Occurs when profits are taxed in both the country of earnings and the home country. Some countries have treaties to prevent this.

What is mode selection in transportation considerations?

Deciding between air, sea, rail, or road based on costs, speed, and product type.

What are freight rates?

Costs associated with shipping goods, influenced by distance, volume, and mode.

What are Incoterms?

Standardized terms defining responsibilities and risks of buyers and sellers in international trade (e.g., FOB, CIF).