Notes, summaries, assignments, exams, and problems for Economy

Global Market Entry Strategies and Alliances

Market Entry Modes: Definitions and Characteristics

• Licensing: Represents a market entry strategy whereby a company grants rights to a foreign partner.
• Franchising: A variation of licensing.
  • Fact Check: Franchising is another variation of licensing. (T)
  • Fact Check: Franchising in a global context. (T)
  • Fact Check: Franchising is a variation of [X]. (F)
• Foreign Direct Investment (FDI): Honda's investment of $550 million in building a plant is an example of FDI. (T)
• Contract Manufacturing: Companies that use contract manufacturing may require a considerable commitment of management resources.

Licensing Strategy and Advantages

• Licensing is a contractual agreement. (T)
• Licensing as a market entry mode has several

California Property Tax & Budgeting Sector Differences

California's Prop 13: A Non-Neutral Tax System

Property tax in California operates under a non-neutral system, initiated by Proposition 13 in 1978. This landmark legislation linked the tax rate to a property’s sales price at the time of acquisition, with a maximum 2% annual increase on the assessed value. As noted by Bland, this structure means the tax rate is determined by the sales price, primarily benefiting owners who retain their properties for extended periods. The low annual increase on property tax has resulted in significant tax disparities, allowing long-term property owners to realize substantial tax benefits over time, especially upon sale.

Impact on State Revenue and Local

Government Financial Reporting

Governments combine blended components into both fund and government-wide (GW) statements.

Chapter 8- NPV

Opportunity Cost of Capital: expected rate of return given up by investing in a project

Net Present Value: Present value of cash flows minus initial investment--> difference between value and cost.-->reflects time value of money

Risky dollar worth less than safe one

Capital Budgeting Decision: is concerned with finding out investments that maximize value of the firm

IRR: the discount rate at which project NPV = 0 --> accept project if IRR is greater than opportunity cost of capital

Payback Period- time until sum of project cash flows equals the initial investment--> accept if payback period is less than some specified number of years

Discounted Payback Period - Accept project if discounted payback period is less than some... Continue reading "Maximizing Firm Value Through Investment Analysis" »

Core Economic Concepts

Microeconomics: Households and Firms

Microeconomics is the study of the economic system from the perspective of households and business firms.

Macroeconomics: System Performance

Macroeconomics is the study of the overall performance of the economic system.

Economic Growth (EGR)

Economic growth means that the economy is moving towards its full potential output. This is beneficial for the economy because it signifies that people are working and goods are being sold, which in turn stimulates the economy further by creating more jobs. Economic growth is typically presented as the percentage increase in Real GDP.

Gross Domestic Product (GDP) Definition and Measurement

GDP is the total market value of all the final goods and services... Continue reading "Understanding Key Economic Indicators and Finance Terms" »

Governments must combine their Discretely presented component units into both the fund and the Government-wide statements. F

 A related organization is a Contractual arrangement whereby two or more participants agree to Carry out a common activity and share its risks and rewards. F

 A primary government can impose Its will on a potential component unit if it has the authority to Modify or approve the unit’s budget. T

 The comprehensive annual financial report (CAFR) is divided into three main sections: the Table of contents section, the auditors’ report section, and the Financial section. F

The typical audit is designed to Cover all... Continue reading "In-depth financial statement analysis" »

ALOS: Average Length of Stay

Total occupied room nights/total bookings

Attrition

Difference between the number of rooms reserved compared to the number of rooms used

Booking Curve

An important tool for yielding that provides a visual representation of the pickup, number of bookings, availability, and yielding capacity of the hotel over time

Pick Up

No. of reservations between today & day of arrival

Contract

>30 nights + large volume

Group

>10 rooms, contract, deposit

• Corporate: Negotiated rate for a block with a specific company
• Association/Convention: Negotiated rate for a block with trade, professional, philanthropic association
• Government: Negotiated rate for a block with a qualifying government agency

Transient

Ind & groups

• Retail: Market

One of the advantages of licensing is: licensees have considerable autonomy.

Pollo Campero, a chicken restaurant chain: franchising.

Prior to the economic crisis of 1997-1998, South Korea's TRUE

Saab markets two luxury car models, country concentration/market segment concentration

Sony entered into a strategic partnership TRUE Starbucks' relentless pursuit of TRUE

Successful GSPs create win-win situations, mission

Tata Motors (India) acquired Jaguar (UK).

The agreements that allow McDonald's franchisees franchising

The alliance between GE T, The driving force T, The South Korean government has recently F

The disadvantages of joint venturing can Joint ventures allow partners to achieve synergy.

The failure of partnership between Great T, The joint venture... Continue reading "Global Strategic Alliances and Joint Ventures in Business" »

1.5 Protection vs. Integration

Protectionism: The protection objective is to keep alive domestic production and to increase import prices. For this purpose, it uses different instruments:

• Tariffs: taxes on imported goods to protect the domestic industry. An external tariff is a 'tax' on foreign products introduced in the domestic market. The effect is that its price is higher and it is more difficult to compete with domestic products.
• Quotas on imports: is a limitation of the quantity of foreign products to be imported, regardless of the price. Quotas limit imports and increase domestic prices. The limited quantity is an obstacle for foreign products when international prices have decreased.
• Non-tariff barriers: are administrative regulations for

The US: Prosperity, Crisis, and the New Deal

The Roaring Twenties: An Era of Economic Growth

The decade from 1918 to 1929, following World War I, was a period of significant economic growth in the United States. The American Way of Life, with its core values of individual initiative and the pursuit of success, became an influential model for much of the world.

Key Drivers of 1920s Economic Growth

• Significant technical innovations.
• The implementation of Fordism (mass production techniques), leading to mass consumption and a booming stock market.
• A notable rise in workers' wages.
• Extensive and persuasive advertising campaigns.
• The widespread availability of hire-purchase (installment buying) options.
• Increased accessibility to bank loans for businesses