International Business Exam Review

Vocabulary flashcards for reviewing key concepts from the lecture notes.

Company Mission

A statement of its purpose and goals.

Core Competency

A unique skill or strength that gives a company an advantage.

Value-Chain Analysis

Looking at company activities to find where value is added.

Multinational Strategy

Adapts to local markets.

Global Strategy

Keeps products the same everywhere.

Centralization

Decisions are made at the top.

Decentralization

Decisions are spread out.

Product Structure

A type of international organizational structure.

Matrix Structure

A type of international organizational structure.

Secondary Market Research

Using existing data like reports or statistics.

Primary Market Research

Collecting new data through surveys or focus groups.

Exporting

Selling products in another country.

Letter of Credit

A bank promises payment on behalf of the buyer.

Licensing

Letting another company use your product or process.

Joint Venture

A partnership where companies share ownership of a new business.

Dual Pricing

Charging different prices in different markets.

Value Density

The value of a product compared to its weight.

Push Strategy

Promoting products through distributors.

Pull Strategy

Advertising directly to consumers to create demand.

Capacity Planning

Deciding how much a company can produce.

JIT (Just-In-Time) Inventory

Getting supplies only when needed to save costs.

Ethnocentric Staffing

Hiring mostly people from the home country for international roles.

Polycentric Staffing

Hiring local people for jobs in their own country.

Geocentric Staffing

Hiring the best people for the job, no matter what country they’re from.

Culture Shock

Confusion from being in a new culture.

Globalization of Production

Using different countries to lower costs and improve quality.

Ethics in Business

Right and wrong actions for people and organizations.

Cross-Cultural Literacy

Understanding how cultural differences affect business.

Differentiation Strategy

Making a product more attractive to stand out.

Innovation

Creating new products, services, or ways of doing business.

Primary Activities

Directly create value (e.g., production, marketing, logistics).

Support Activities

Help improve efficiency and effectiveness (e.g., HR, tech).

Growth Strategy

A plan to expand the company.

Retrenchment Strategy

A plan to reduce the company’s size or scope.

Stability Strategy

A focus on maintaining current business operations.

Low-Cost Leadership Strategy

Competing by having the lowest prices in the market.

Focus Strategy

Targeting a specific market niche.

Income Elasticity

Shows how much demand changes when income changes.

Market Potential Indicator

A tool that measures a market’s attractiveness.

Countertrade

Trading goods or services directly, without using money.

Advance Payment

The buyer pays before the goods are shipped.

Document Collection

A bank sends documents between buyer and seller.

Open Account Financing

The exporter ships goods and expects the buyer to pay later.

Turnkey Project

A company sets up a whole operation, then hands it over.

Management Contract

One company manages the operations of another for a fee.

Channel Length

How many intermediaries are between the company and the customer.

Price Control

Government laws that limit how high or low a product can be priced.

Dumping

Selling products in another country at very low prices to beat local competition.

Location Economies

Cost savings from placing production where it’s most efficient or cheapest.

Standardization

Using the same processes everywhere.

Adaptation

Customizing for local markets.

ISO 9000

An international standard for quality management.

Return on Equity (ROE)

A measure of profitability: Net income divided by shareholders’ equity.

Capital Structure

The mix of debt, equity, and internal funding a company uses to fund itself.

Labor Unions

Organizations that represent workers in negotiations with employers.

What analysis must managers perform before strategy formulation? 

Define a clear mission, set objectives, perform value chain analysis, and assess cultural, political, legal, and economic environments. 

What are the primary corporate-level strategies? 

Growth, retrenchment, stability, and combination. 

What are the three business-level strategies? 

Low-cost leadership, differentiation, and focus. 

What is centralized vs. decentralized decision making?

Centralized occurs at a high level for coordination; decentralized occurs at the subsidiary level for responsiveness. 

What are four types of international organizational structures? 

International division, international area, global product, and global matrix structures. 

Name the types of international work teams

Self-managed teams, cross functional teams, and global teams

What is the first step in selecting a market or site?

Assessing basic product demand or availability of production resources

What factors should be examined after assessing basic appeal?

Cultural, political, legal, economic, and financial forces

What is market-potential index?

A ranking system to assess the appeal of different markets

What are major sources of secondary market research?

Global institutions (e.g., WTO), government agencies, trade associations, and service organizations. 

What are common methods of primary market research? 

trade shows, trade missions, interviews, focus groups, and surveys.

What is countertrade and its forms?

Exchange of goods/services for other goods/services. Forms: barter, counter purchase, offset, switch trading, and buyback. 

What are the four export financing methods?

Advance payment, documentary collection, letter of credit, and open account. 

What are the types of contractual entry modes?

licensing, franchising, management contracts, and turnkey projects. 

What are types of investment entry modes?

Wholly owned subsidiaries, joint ventures, and strategic alliances. 

What is the difference between push and pull strategies? 

Pull creates demand; push pressures channel members to promote products. 

What are the five product/promotion strategies

Dual extension, product extension/communication adaptation, product adaptation/communication extension, dual adaptation, and product invention. 

What affects distribution strategy? 

Channel type (exclusive/intensive), channel length, value density, and local market understanding. 

What are international pricing strategies?

Worldwide pricing and dual pricing

What is capacity planning?

Planning to produce enough to meet market demand

What influences the make-or-buy decision?

Cost, control, flexibility, risk, and availability of raw materials.

What are key production concerns?

TQM, ISO 9000, JIT manufacturing, reinvestment, and divestment. 

What are ways to finance international operations? 

Back-to-back loans, ADRs, venture capital, internal funding, and revenue reinvestment. 

What are the three international staffing policies? 

Ethnocentric, polycentric, and geocentric. 

What is culture shock and reverse culture shock

Psychological stress from adjusting to or returning from a foreign culture.

What are common international training methods? 

Environmental briefings, cultural orientations, assimilation, sensitivity training, language training, and field experience. 

What affects international compensation? 

Local cost of living, wage rates, hardship pay, and labor–management relations.