Gateway Ch. 3,6,11 QUIZ

Ch. 3

Why Nations Trade

• raw materials and goods- unattainable or expensive at home

Global Trade

• comparative advantage

  • absolute advantage: most efficient

  • most trade = comparative advantage

    • concentrate on few products, import others

    • opportunity cost: benefit forfeited by choosing alternative option

  • may attract outsourcing

    • transferring manufacturing

    • moves jobs around (controversial)

• International Business

  • improves relations

  • bolsters economy

  • raises standard of living

  • improves quality of life

• Measuring international trade

  • exporting: sale to foreign markets; selling (favorable)

  • importing: buying

• Tarrifs

  • connotations:

    • monopolies

    • trade war

• Exchange rate

  • different international currencies: appreciation vs depreciation

    • If a country’s currency depreciates, its products become cheaper to foreign buyers

    • if a country’s currency appreciates, its products become more expensive to foreign buyers

Options for Competing

• exporting: selling products abroad while producing domestically

  • direct: direct to customers

  • indirect: using export agents or trading companies

• licensing and franchising: allowing foreign firms to use brand, technology, or business model in exchange for fees.

  • licensing: granting rights to intellectual properties (patent/trademark) for fees

  • franchising: granting rights to operate a business under a brand’s model and guidelines

• strategic alliances and joint ventures: partnering with local company to share resources, knowledge, and risk

  • strategic alliances: collaboration with no new identity (temporary partnership)

  • joint venture: creating a new, jointly owned company with a foreign partner

• Direct foreign investment (FDI): creating physical foreign presence through ownership/ control of production, distribution, service facilities

  • greenfield investment: building operations from ground up

  • acquisition/merger: purchasing an existing foreign company

Ch. 6

Role of Management

• Management: process of guiding resources effectively and efficiently in order to achieve organizational goals

  • effective: getting desired results

  • efficient: getting desired results using least amount of resources/time

• 4 Managerial functions

  1. planning

  2. organizing

  3. leading

  4. controlling

     • customer satisfaction can impact efficiency and effectiveness

• Planning

  • strategic planning

    • long: 1-10 years

    • formed by top management

    • establish mission

    • broad

  • operational planning

    • short (day/week/month)

    • specific standards, methods, policies

    • immediate plan

  • tactical planning

    • shorter range (less than one year)

    • middle management

    • mid range goals

    • addresses issues of coordination, resource allocation to different parts of the organization

• Organizing: keeps businesses running smoothly

  1. define roles and responsibilities (who does what)

  2. create structure: establish hierarchy (teams)

  3. allocate resources: staffing, finances, equipment

  4. coordination: define reporting lines and authority

• Controlling

  1. moniter performances

     • track progress (check if it’s all working)

     • find specific details that work/ don’t work

  2. compare with goals

     • identify gaps

  3. take corrective action

     • fix issues

  4. improve efficiency

     • make adjustments

Ch. 11

Marketing: creating products and pricing strategies to meet customers needs 

• expedites and creates exchanges

• creates value

  • customer: helps them get what they want/need

  • firm: creating exchanges

• the “Right” principle: right product, time, price, promotion, customer service to the right people. if not- no exchange

  • How to do this?

    1. identify buyers needs/wants

    2. develop product

       • created after market research

       • focus on needs/wants to distinguishing products from competitors

       • create customer value

• benefits to sacrifice ratio

  • if sacrifice > benefits = buyer’s remorse

  • if benefits > sacrifice = customer value created

    • sacrifice and value are not only about money

    • they’re in relation to competitor’s value

• Target Market: consumers at focus of marketing efforts

  • segment you are able and willing to serve. (ex. gender, lifestyle, income, education, personality, age)

• Creating a competitive advantage

  • cost leadership strategy: lowest cost producer in industry, thus offering lowest prices while maintaining profitability

    • economies of scale: large production to reduce cost (ex. walmart)

    • efficient operations: streamline operations and supply chains (ex. amazon)

    • cost control: across entire organization

    • standardization: offering a more standardized product to keep costs down

• differentiation strategy (product/service): product or service that stands out from competition- unique attributes highly valued by customers

  • unique product features: design, quality, technology, etc.

  • strong branding: recognized and trusted

  • customer service: great support can create loyalty

  • market perception: luxury, exclusivity

• creating a market strategy

  1. Product

     • more than just the thing they buy; brand name, packaging, colors, warranty, etc.

     • what does the customer need/want

  2. Price

     • what’s perceived value to target market?

     • competitive pricing, penetration, pricing, skimming pricing, leader pricing

  3. Place (distribution)

     • how/where is the product available to customers

     • online/retail? sold direct/intermediaries? logistics?

  4. Promotion

     • salespeople, sales promotions, advertising, public relations, social media

• the product life cycle

  • must revise marketing mix as product moves through cycle

  • better able to forecast sales, strategies

  • Cycle:

    1. introduction

    2. growth

    3. maturity

    4. decline