BU111 Political-Legal Factors Finals Prep

What elements are considered for Political-Legal Factors?

Laws, regulations, taxes, trade agreements or conditions

What is the significance of Political-Legal Factors?

Protection of consumers; ethical business; financial and physical safety, Support/protection and regulation of domestic businesses; fair competition; entrepreneurship; opportunity creation in foreign markets

How do Businesses Influence the Government?

Lobbying, Collaboration/Input, and Advertising

What is Lobbying?

When people are hired to represent a companies or groups interests

What is the Lobbying Act?

A law that regulates how companies and organizations communicate with public officials to influence government decisions

What are trade associations?

Small businesses or individuals that join and lobby as an industry lobby group

The P in Pest refers to the government. How might this connect with social factors?

It is run by people, and people in society can persuade them

Lobbyists ____________ misrepresent themselves

cannot

A lobbyist ______ say that they are there alone when they are truly with Rodgers.

Cannot

What does Collaboration/Input mean?

CRTC consults with industry members

What does the CRTC monitor?

TV shows and radio, specifically tracking how much Canadian content is present

What does Advertising refer to?

Corporations influencing voters

An example of something the CRTC does not allow is with Rodgers when you could leave your Rodgers cell phone plan, but you had leave your phone number there.

True

How does the government connect to the Potential Entrants in Porter's Five Forces?

By creating regulations or policies that make it easier or harder for new businesses to enter a market

How does the government connect to the Buyers in Porter's Five Forces?

By regulating product safety, pricing, and consumer protection, which affects buyer choices

How does the government connect to the Substitutes in Porter's Five Forces?

By regulating or approving alternative products and services, affecting their availability and competitiveness

How does the government connect to the Suppliers in Porter's Five Forces?

By regulating supplier practices, setting standards, or influencing supply chains through policies

How does the government connect to the Rivalry among Existing Competitors in Porter's Five Forces?

By enforcing regulations, antitrust laws, or policies that affect how companies compete

What are the traditional forms of ownership?

Sole Proprietorship, Partnership, Corporation

What is a Sole Proprietorship?

When a business has only one owner

What is a partnership?

A business owned by two or more people

What is a Corporation?

A business owned by shareholders that is legally separate from its owners

What is a Public Corporation?

A business owned by the public, where shareholders invest to earn profits

What is a Private Corporation?

A corporation where shares are traded privately and not on public stock exchanges

What is a Social Enterprise?

A business that operates to achieve social, environmental, or community goals while also earning revenue

What are benefits of a Sole Proprietorship?

Simple to set up, full control by the owner, and all profits go to the owner

What are drawbacks of a Sole Proprietorship?

Owner has unlimited liability, limited access to capital, and the business depends entirely on one person

What are benefits of a Partnership?

Shared decision-making, combined skills and resources, and easier access to capital than a sole proprietorship

What are drawbacks of a Partnership?

Shared liability among partners, unlimited liability, potential for conflict, and profits are shared

What are benefits of a Corporation?

Limited liability for shareholders, ability to raise capital by selling shares, and the business is a separate legal entity

What are drawbacks of a Corporation?

More complex and expensive to set up, profits may be taxed twice (corporate and personal taxes), and decisions may be slower due to management layers

How easy is the formation of a Sole Proprietorship?

Simple and Inexpensive

How easy is the formation of a Partnership?

Simple, Inexpensive, and there is an optional partnership agreement

Sole Proprietorships face __________ regulations.

few

Partnerships face __________ regulations.

Few

What kind of control do the owners of Sole Proprietorships have?

Complete Control, with no compromisation needed

What kind of control do the owners of a Partnership have?

Shared control among partners, requiring compromise and collaboration

What resources and capabilities do Sole Proprietorships have?

Whatever the owner brings in

What Resources and Capabilities do Partnerships have

Whatever the Partners collectively bring in

How are Sole Proprietorships Taxed?

They are taxed as personal income

How are Partnerships taxed?

They are taxed individually on their share of the partnership’s income

What type of Liability do Sole Proprietorships have?

Unlimited

What type of liability to general partners have?

Unlimited Liability

What type of liability do limited partners have?

Limited Liability

Within a General partnership, what are the two types of liability?

Joint Liability and Several Liability

What is Joint Liability?

When all partners share liability

What is Several Liability?

When 1 partner is liable for all partners

If a business is sued and the owners cannot be held responsible, it is ________ liability.

Limited

Limited partners ________ be active in management

cannot

In each business there must be at least _______ general partner.

One

A corporation is a _______ entity from its owners (shareholders)

separate

What are the types of Corporations?

Public, Private, and Crown

What is a Crown Corporation?

A corporation owned by the government

What is an IPO?

An Initial Public Offering, when a company sells shares to the public for the first time

What ares are Social Enterprises often in?

Education, Health, Environment, Food Insecurity, Poverty

For Social Enterprises, Social Value is the primary objective, but financial sustainability is imperative

True

What are implications of Social Forces?

Economic value is not a required priority and there are dual stakeholders

For Social Enterprises, what does dual stakeholders mean?

Those served and those supporting; one or both pay

An example of a Social Enterprise is Grameen Bank:

Provides loans to women in impoverished areas of rural Bangladesh. The social value of this is women starting their own business, and being able to invest in children’s education and building their own homes, etc.

Why is this a successful business structure?

The loans are self sustaining because they are repaid, and the capital is given to others.

It is a constantly repeating cycle, where women can take out a loan, start a business to repay this loan, sell things to earn a profit and repay the loan.

This cycle is constantly repeating

What are the driving forces to globalization?

Cost and market benefits, Technology makes it easier, faster, and cheaper, and Competitive pressure

What does cost and market benefits mean?

Companies can reduce costs by producing in cheaper locations and access larger markets to sell more products

How can technology make things easier, faster, and cheaper?

By improving communication, reducing transportation and production costs, and enabling efficient coordination across countries

What is an example of technology making things easier, faster and cheaper?

Utilizing Shopify

What is an example of technology making things easier, faster and cheaper?

Selling products on Amazon

What does competitive pressure mean?

Over time, rivalry increases and other suppliers look for more opportunities, pushing companies to improve

Internally, what are international trade barriers and factors?

Knowledge/capabilities, Production, Preferences, and Finances

Externally, what are international trade barriers and factors?

PEST, Porters Five Forces

With international trade barriers and factors, what is important to remember with Political factors?

They include quotas, tariffs, subsidiaries, protectionism, local content laws, and business. practice laws

With international trade barriers and factors, what is important to remember with Social and Cultural factors?

Customer needs, Customer values, Language, and Norms

With international trade barriers and factors, what is important to remember with Economic factors?

Exchange rates and Foreign GDP

With international trade barriers and factors, what is important to remember with Technological factors?

IP laws and Technology standards

With international trade barriers and factors, what is important to remember with Porter’s 5 Forces factors?

Distribution, Customers, Competition, Suppliers, and Substitutes

With international trade barriers and factors, why are local content laws important?

They require a certain percentage of a product or service to be sourced locally, supporting domestic industries and compliance with regulations

What is an example of local content laws?

The CBC/NBC requiring a certain amount of Canadian content in its programming

How does customer needs impact International trade?

They might value different things, such as sustainability or luxury

How does language impact international trade?

Different countries have different language barriers, so products labels, and marketing need to be adapted

How do cultural norms impact international trade?

Cultural norms influence customer, acceptable business practices, and marketing strategies in different countries

What are IP (Intellectual Property) laws?

Laws that protect creations of the mind, such as inventions, trademarks, copyrights, and patents

How do Technology Standards impact international trade?

They determine if products can operate properly on the infrastructure of different countries, affecting compatibility and market access

How do exchange rates impact international trade?

They affect the cost of importing and exporting goods, influencing pricing, competitiveness, and profitability in different markets

How does Foreign GDP impact international trade?

It affects the overall demand in a country, as higher GDP means more purchasing power for consumers and businesses.

How does distribution impact international trade?

It determines how a company gets its products into foreign markets, affecting market access and availability.

How do customers impact international trade?

Customer preferences and demands in different countries influence what products are sold, how they are marketed, and how businesses operate internationally.

How does competition impact international trade?

The presence of competitors in international markets pushes companies to improve products, reduce costs, and innovate to remain competitive.

How do suppliers impact international trade?

Suppliers affect international trade by determining the availability, cost, and quality of materials needed for production, influencing a company’s ability to compete in foreign markets.

How do Substitutes impact international trade?

Substitute products affects international trade by influencing customer choices, pricing, and a company’s competitiveness in foreign markets.

What should be considered when deciding to go international?

Can We? Should We? Where? How?

What framework should be used to ask “Can We” go international?

Diamond-E; Internal

What framework should be used to ask “Should We” go international?

Diamond-E; External

What framework should be used to ask “Where” to go international?

Pest and Porters Five Forces

What framework should be used to ask “How” to go international?

Execution

Which question should you ask when considering “Can we” go international?

Do we have the basics to even consider it

Which question should you ask when considering “Should we” go international?

Is there demand for our product? Is it worth going?

Which question should you ask when considering “Where” to go international?

Where is the best opportunity?

Which question should you ask when considering “How” to go international?

How to do it-tactical strategies

What is the significance of Population?

The larger the population the better off the business will be due to larger customer base

What is the significance of average spending?

Customers need to have disposable income to spend on your product

What is the significance of customer reachability?

Businesses need to be able to reach customers through marketing, distribution, and communication channels to generate sales

What is the significance of competition?

Competition affects pricing, quality, and innovation, pushing businesses to improve and stay competitive

What is the significance of Distance?

Distance affects shipping costs, delivery times, and the ability to serve customers efficiently