business unit 4 ial

Flashcards covering key vocabulary from the lecture notes on growing economies, international trade, globalization, protectionism, trading blocs, trade conditions, market assessment, production location assessment, global expansion, global marketing, niche markets, cultural factors, MNC impact, business ethics and MNC control.

GDP per capita

A measure of a country's economic output per person and a common indicator of the standard of living.

Literacy Rate

The percentage of a population that can read and write, indicating the level of education and human capital in a country.

Life Expectancy

The average number of years a person is expected to live, reflecting the health and well-being of a population.

Infrastructure

The basic physical and organizational structures needed for a society or enterprise to operate effectively, such as transportation, communication, and utilities.

Visible Trade

Trade involving physical goods, including exports (goods sold to a foreign market) and imports (goods bought from a foreign market).

Invisible Trade

Trade involving services, including exports (services sold to a foreign market) and imports (services bought from a foreign market).

Visible Trade Surplus

Occurs when a country's exports of physical goods are greater than its imports of physical goods.

Visible Trade Deficit

Occurs when a country's imports of physical goods are greater than its exports of physical goods.

Invisible Trade Surplus

Occurs when a country's exports of services are greater than its imports of services.

Invisible Trade Deficit

Occurs when a country's imports of services are greater than its exports of services.

Specialization

A situation in which a country or business focuses on producing specific goods or services in which it is more efficient, leading to a competitive advantage.

Foreign Direct Investment (FDI)

Investing by setting up operations or buying assets in businesses in other countries.

Globalization

The growing integration of the world's economies, characterized by trade, migration, capital flows, and the sharing of technology.

Trade Liberalization

The reduction of trade barriers, such as tariffs and quotas, to encourage trade between nations.

World Trade Organization (WTO)

An international organization established in 1995 to promote free trade and resolve trade disputes between member countries.

Protectionism

The use of trade barriers to protect domestic firms and industries from foreign competition.

Dumping

A situation where foreign producers sell goods below cost in a domestic market, often with the objective of gaining a monopoly.

Tariffs

Taxes imposed on imported goods and services, making them more expensive and reducing demand.

Import Quota

A restriction on the quantity of imports allowed into a country, reducing competition for domestic producers.

Embargo

A complete ban on imports from a country.

Domestic Subsidies

Government assistance to domestic producers to reduce their production costs and increase competitiveness.

Trading Bloc

A group of countries that have signed a regional trade agreement to reduce or eliminate trade barriers between themselves.

Free Trade Area (FTA)

A trading bloc where member states remove all trade barriers, such as tariffs and import quotas, between themselves.

Customs Union

A trading bloc similar to a free trade area, but with a common set of barriers against non-members.

Common Market

A trading bloc where goods, labor, and capital can move freely across member states.

Single Market

A common market where most trade barriers between members are removed and common laws or policies facilitate the movement of goods, services, labor, and capital.

Economic Union

A trading bloc involving both a customs union and a common market, aiming for closer economic, political, and cultural ties between member states.

Push Factors

Negative factors in the existing market that encourage an organization to seek international opportunities.

Pull Factors

Attractive factors in foreign markets that encourage an organization to expand internationally.

Offshoring

Moving manufacturing or service industries to a location with lower costs.

Outsourcing

Moving an entire business function or project to a specialist external provider.

Disposable Income

Income after taxes, representing the amount of money available for spending on goods and services.

Exchange Rates

The value of one currency in terms of another, affecting the competitiveness of exports and imports.

Porter's Five Forces

A model used to assess the attractiveness of a market by analyzing the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the rivalry among existing firms.

Government Incentives

Measures used by governments to influence the location of businesses, such as tax exemptions and duty removal.

Payback Method

A method to calculate how long it will take to recover the initial investment.

Average Rate of Return (ARR)

the net return per annum divided by the initial investment and expressed as a percentage.

Discounted Cash Flow

The value of future cash flows reduced to show their present value.

Backward Vertical Integration

Merging with another firm to secure resources or supplies further back in the supply chain.

Economies of Scale

Cost advantages that a business can exploit by increasing their scale of production.

Global Sourcing

The procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country.

Ansoff's Matrix

A tool to help a business achieve growth, including market penetration, market development, product development, and diversification.

Global Niche Market

A specific range of people, often subcultures, with common interests or hobbies.

Premium Pricing

Charging high prices for products in global niche markets due to lack of competition.

Ethical Behavior

Refers to the principles and acceptable norms that govern behaviour.

Consumers

A stakeholders conflicts include misleading advertising

Employees

A stakeholders conflicts include redundancies and safety concerns

Stakeholders conflicts

A conflict involving shareholders, management, countries and communities

Tax avoidance

Using legal method to reduce the amount of tax

Tax evasion

illegal avoidance tax

Boycotting

Withdrawing from commercial or social relations as a form of protest.

Social Media

An interaction between electronic and mobile devices, application, and people that allows users to create contents.

Self-Regulation

Firms in the same industry agree to follow a set of rules and guidelines to ensure proper conduct.