RSM100 Lecture Review - Final

International Company

A company that imports/exports products to one or more countries.

Global Company

A company that pursues customers in all major regions (North America, Asia, Europe).

Absolute Advantage

The ability of a party to produce a greater quantity of a good or service than competitors using the same amount of resources.

Comparative Advantage

The ability of a party to produce a good or service at a lower opportunity cost than another.

Reasons Companies Trade

Profitable pursuit for excess resources, cost reduction, foreign market demand.

Risks of Trade

Natural disasters, political instability, exchange rates.

Benefits of (Free) Trade

Consumers pay lower prices and have more choice, promotes economic growth, prevents economic distortion.

Driver of Globalization

Factors that facilitate the international integration of markets and production.

Foreign Exchange

The market in which currencies are traded.

Low Canadian Dollar Effect on Trade

A low Canadian dollar can make Canadian exports cheaper and imports more expensive, affecting international trade and the economy.

Currency Pegging

Historically, currencies were pegged to gold values; now many use USD as a benchmark.

Cultural Nuances

Cultural differences that can affect international business practices.

Pocari Sweat

A Japanese energy drink that failed in foreign markets due to translation issues.

EU Tariffs on Chinese EVs

The EU is implementing a 36.3% tariff on Chinese electric vehicles in addition to an existing 10% tax.

Chinese EV Production Costs

Chinese manufacturers have lower production costs, allowing competitive pricing despite tariffs.

State Capitalism

An economic system in which the government controls the production and distribution of goods and services.

Market Economy

An economic system in which supply and demand guide economic decisions.

Advantages of State Capitalism

Government support allows for competitive pricing, faster company growth, and stability during downturns.

Disadvantages of State Capitalism

Retaliation from other countries, inefficiencies, overproduction, limits on competition and innovation.

Economies of Scale

Cost advantages gained by an increased level of production.

Vertical Integration

A strategy where a company owns or controls its supply chain.

Outsourcing

The practice of using external resources to carry out business functions.

Strategic Management

The process of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

SWOT Analysis

A strategic planning tool used to evaluate Strengths, Weaknesses, Opportunities, and Threats.

Tesla's Strengths

Technological advancements.

Tesla's Weaknesses

High cost of inputs.

Growth Strategy

A strategy that aims to increase a company's market share, sales, and profits.

Concentration Strategy

A strategy focusing on a single market or product.

Diversification Strategy

A strategy of entering new markets with new products.

Related Diversification

Entering a new market that is related to existing business operations.

Unrelated Diversification

Entering a market that has little or no relationship to existing operations.

Restructuring

The act of reorganizing the structure of a company.

Retrenchment

Reducing costs or spending in response to economic difficulties.

Liquidation

The process of bringing a business to an end and distributing its assets to claimants.

Downsizing

Reducing the number of employees or operations.

Divestiture

The process of selling off a subsidiary business or investment.

Strategy Formulation

The process of defining an organization's strategy or direction.

Branding Change Example

Ashley Madison's failed attempt to rebrand following a data breach scandal.

Strategy vs. Tactic

A strategy is a long-term plan; a tactic is a short-term action.

Five Strategic Forces

Framework used to analyze the competitive environment by showing the bargaining power of suppliers and consumers, the threat of new entrants, substitutes, and rivalry among existing competitors.

Target's Failure in Canada

Target rushed into Canada and did not adequately understand the market, leading to failure.

Costco's Treasure Hunt Strategy

A retail strategy that creates urgency by frequently changing inventory.

Costco's Low Mark-Ups

A pricing strategy that encourages customer retention due to lower prices.

Big Data

Extremely large data sets analyzed computationally to reveal patterns or trends.

5 Vs of Big Data

Volume, Variety, Velocity, Veracity, Value.

CIA Triad

A model designed to guide policies for information security within an organization.

Uses of Big Data

Predict demand, identify gaps, and perform turnout analysis.

Challenges of Big Data

Requires significant capital, recruitment, and training.

Chief Information Officer

An executive responsible for managing and implementing IT and computer systems.

Machine Learning

A type of artificial intelligence that enables systems to learn from data.

Threats of Climate Change

Increasing extreme weather events that force businesses to reassess risk management.

New Sustainability Model

A model that prioritizes environmental considerations before societal and profit concerns.

Technology in Climate Change

Tools such as EVs and renewable energy sources to combat climate issues.

Case Study - Shift

A vision focusing on transforming waste into energy and addressing global problems.

Coca Cola Company Overview

The Coca Cola Company has over 135 years in business and operates in over 200 countries.

Coca Cola Bottling Overview

Focuses on consumer relationships and local market strategies.

Advantages of Bottlers for Coke

Closer to clientele and ability to focus on brand-building strategies.

Disadvantages of Bottlers for Coke

Inconsistencies in production and potential communication issues.

Market Research in Acquisitions

Analyzing growth potential and synergies before a business acquisition.

Funding the Acquisition

Options may include equity and debt financing.

Integration & Optimization Post-Acquisition

Set clear objectives and leverage synergies.

Case Competition Example - FreshByte

A project aimed at tackling food waste by tracking fridge inventory.

Anti-trust Lawsuit against Amazon

Allegations of maintaining industry dominance through anti-competitive tactics.

Khan's Closing Thoughts

Encourages personal focus, prioritizing fulfillment over stress.

Marshmallow Test

A psychological test demonstrating the value of delayed gratification.