Notes, summaries, assignments, exams, and exercises for Economics for Other courses

International Trade: Free Trade vs. Protectionism

Free Trade

Free trade is the doctrine that defends commercial transactions between two or more countries conducted without impediments. To boost international trade, governments use these tools to promote exports:

• Official bodies: They offer advice to exporters. In Spain, this is done by the Institute of Foreign Trade and Chambers of Commerce.
• Financial assistance: This is provided in the form of export loans.
• Grants: These support businesses.

Protectionism

Protectionism is an economic policy that supports the establishment of barriers to free trade among countries to safeguard national production. Protectionist measures aim to protect national industry and agriculture, which can be adversely affected...

Forward Rate Agreements (FRA)

A Forward Rate Agreement (FRA) is a contract where two parties fix the interest rate today for a future loan without exchanging the principal amount. At settlement, they only exchange the difference between the agreed and market rates, primarily to hedge interest rate risk.

Initial Public Offering (IPO)

An IPO (Initial Public Offering) is the first public offering of a company’s shares. It marks the first time a company sells its shares to the public and becomes listed on a stock exchange. Therefore, an IPO takes place in the primary market, as the shares are offered to investors for the first time.

The IPO process normally includes:

• The decision by the Board and the General Shareholders’ Meeting
• The submission of

Understanding Brand Equity

Brand Equity is the value that a brand adds to a product. It is essential because consumers do not only buy the product itself, but also the image, emotions, and trust connected to the brand. A strong brand equity allows companies to charge higher prices, create customer loyalty, and maintain a competitive advantage over time. Brand equity consists of 5 main elements:

1. Brand Awareness

Brand Awareness refers to how well consumers know and remember a brand. Coca-Cola and Pepsi are both globally recognized brands, but Coca-Cola has stronger recall. When people think about cola drinks, Coca-Cola is usually the first brand that comes to mind, while Pepsi is normally remembered second.

2. Perceived Quality

Perceived Quality...

Balance Sheet: Interpreting Changes

Income Statement: Performance

International Finance Fundamentals

Three Reasons International Finance is Special:

• Political Risk: Foreign expropriation, unstable regimes, and tariffs.
• Exchange Rate Risk: Currency value changes significantly affect cash flows.
• Market Imperfections: Barriers, taxes, and information gaps.

Multinational Corporation Goals:

• Maximize global shareholder value, not just domestic.

Currency Depreciation Effects:

• ↓ Currency → Exports ↑, Imports ↓.

Currency Appreciation Effects:

• ↑ Currency → Exports ↓, Imports ↑.

Understanding Financial Contagion:

• Economic crises spread to other countries (e.g., Greek debt crisis, Asian currency crisis).

Evolution of Global Monetary Systems

Bimetallism (Pre-1875):

• Both gold and silver backed currencies.
• Problem: Gresham’s

Target Marketing: Definition and Strategies

Target marketing is the process of identifying specific consumer segments to focus marketing efforts on. This strategic approach allows businesses to tailor their products, messages, and strategies for maximum impact. Key strategies include:

• Undifferentiated Marketing: A mass-market approach, treating the entire market as one segment.
• Differentiated Marketing: Targeting multiple market segments with distinct offerings for each.
• Concentrated Marketing (Niche Marketing): Focusing on a single, specific market segment.
• Micromarketing: Tailoring products and marketing programs to the needs and wants of specific individuals or local customer segments.

Market Positioning and Competitive Advantage

Market positioning...

Sustaining a Competitive Advantage

A competitive advantage must not only be created but also sustained over time. Sustaining a competitive advantage depends on several factors:

• Barriers to Imitation: Obstacles that prevent competitors from reproducing a competitive advantage. Examples include protected knowledge (patents, brands, etc.) and accumulated experience.
• Competitor's Ability to Imitate: The ease with which rivals can replicate a competitor's advantage.
• Industry Dynamism: As an industry undergoes more changes, competitive advantages tend to become more transitory.

Generic Competitive Strategies

The primary generic competitive strategies are Cost Leadership and Differentiation Strategy.

Cost Leadership Strategy

A company achieves a cost advantage...

Glovo's Primary Activities: Core Value Creation

• Inbound Logistics

  Glovo partners with local restaurants, stores, and service providers to secure a steady supply of goods available for delivery. This involves managing relationships and ensuring that partners have the necessary infrastructure to fulfill orders efficiently.

• Operations Management

  Glovo’s operations include the processing and coordination of orders through its app, from customer selection to payment and order dispatch. The company uses algorithms to optimize delivery routing, reduce wait times, and ensure efficient order batching, contributing directly to its value proposition of fast delivery.

• Outbound Logistics and Delivery

  As a delivery service, outbound logistics are critical. Glovo’s

Mastering Post-Sale Customer Engagement

Achieving Repeat Sales

Repeat sales are earned by consistently demonstrating the ability to add value in diverse ways.

Responding to Post-Sale Customer Expectations

• Ensure your customer strategy is on target.
• Focus on diligent follow-through and follow-up activities.
• Regularly reexamine your product strategy.

Understanding Customer Attrition

Regaining a lost customer can be four to five times more expensive than retaining a current, satisfied customer.

Main Causes of Customer Attrition:

• Poor service
• Product dissatisfaction
• Price considerations

Key B2B Service Behaviors

1. Diligence: Persistence in service delivery.
2. Information Communication: Transparent and timely sharing of relevant updates.
3. Inducements: Offering incentives

Business Studies

The NBER has formally affirmed that the US financial system is in a recession.

By putting into action an effective monetary policy, the Federal Reserve and the US government could uphold stable prices, thus sustaining conditions for long-standing economic expansion as well as increased employment opportunities. This study will explain how open market operations, discount rate, and reserve requirements could be utilized in order to stimulate the American economy.

Open Market Operations

Open market operations (OMOs) refer to the buying and selling of securities by a central bank in the open market to execute monetary policy. OMOs could be utilized in adjusting the supply of reserve balances in order to uphold the federal funds rate...