Untitled Flashcards Set

International Business Study Guide

I. Short Answer Quiz

Answer each question in 2-3 sentences.

1. What are two of the factors that influence a company's decision to adopt internationalization strategies?

2. How does international marketing differ from global marketing? Give an example of each.

3. Define "institutions" in the context of international business, and give one example of a formal institution and one of an informal institution.

4. What is Foreign Direct Investment (FDI), and what's the difference between inward and outward FDI flows?

5. What are the three regions that constitute the "triad" in global transactions, and what is significant about them?

6. How does Apple work backward to improve customer experience? Explain.

7. Explain how franchising can be a beneficial entrepreneurial mechanism for both retailers and individuals.

8. According to Session 3, what are the components of a successful communication strategy for attracting customer attention?

9. What are the key pillars of ESG (Environmental, Social, and Governance) principles, and why are companies adopting them?

10. What is the difference between a linear and circular economy?

II. Quiz Answer Key

1. Companies may adopt internationalization strategies due to profit motives, seeking to increase revenue in new markets. Additionally, government policies, such as trade agreements and incentives, can also encourage companies to expand internationally.

2. International marketing involves making marketing decisions separately in each country, with local staff tailoring strategies to specific target markets, as seen with Unilever. In contrast, global marketing treats the world as a single market, creating products that can be adapted quickly to any region, such as in the pharmaceutical industry.

3. Institutions are sets of common habits, rules, or laws that regulate interactions. A formal institution example is the WTO, while an informal institution might be unwritten cultural norms affecting business practices.

4. Foreign Direct Investment (FDI) involves equity funds invested in other nations. Inward FDI refers to money coming into a country from foreign-owned multinational enterprises (MNEs) to their subsidiaries, while outward FDI is money going out from firms within a country to their subsidiaries in other countries.

5. The triad consists of the United States, the European Union, and Japan. These regions are significant because a large portion of global transactions take place within and between them.

6. Apple works backward by exploring customer experience and then working with engineers to build technology and products that meet those customer experience needs. This approach ensures innovation is always customer-centric.

7. For retailers, franchising allows expansion as an earning instead of an investment, limiting risk and expanding brand reach. For individuals, franchising provides ownership of a successful business, complete with training and resources, without needing prior expertise.

8. A successful communication strategy includes clarity of words, clarity of message, and clarity of knowledge. The strategy emphasizes delivering intellect and purpose to customers, telling them why they need the products.

9. ESG principles consist of Environmental policies and sustainable actions, Social benefits to stakeholders and employees, and Governance in socially managed companies. Companies adopt ESG principles because they are associated with higher performance and lower risks.

10. A linear economy follows a "take-make-dispose" model, extracting raw materials, producing goods, and eventually accumulating waste. In contrast, a circular economy seeks to minimize waste by reusing and recycling materials, designing products for longevity and easy breakdown, and prioritizing service-based models over ownership.