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

Values and Attitudes

Values and attitudes vary between nations, and even vary within nations. So if you are planning to take a product or service overseas make sure that you have a good grasp the locality before you enter the market. This could mean altering promotional material or subtle branding messages. There may also be an issue when managing local employees.

Education

The level and nature of education in each international market will vary. This may impact the type of message or even the medium that you employ.

Social Organizations

This aspect of Terpstra and Sarathy’s Cultural Framework relates to how a national society is organized.

Technology and Material Culture

Technology is a term that includes many other elements. It includes questions... Continue reading "International Marketing: Key Factors to Consider" »

Consumer

person who buys things or uses

Retailer

company or persona who sells directly to the public, especially through shops

Wholesaler

person or company that sells goods in large quantities to shop keepers

Manufacturer

person or organization that makes goods

Distribution

person or company that supplies goods to shops or another business

Transaction

business done between people, often involving a buyer and seller

Goods

things that are produced to be sold

Services

doing something for customers but not producing goods

Value

how much something is worth in money

Supply

quantity of goods available

Turnover

the value of the goods or services sold during a certain period of time

Margin

difference between costs and selling price

Discount

reduction in the usual price of something

Deposit

small... Continue reading "Understanding the Consumer Goods Industry: Key Terms and Concepts" »

Elements Influencing the GDP:

Consumption:

Consumption is the value of goods and services bought by people.

An increase of consumption will cause GDP to increase. This means there is an increase in living standards as more people can consume higher levels of goods and services.

Increased GDP per Capita will improve government finances. This is because people will pay more income tax and more VAT; firms will pay more corporation tax. Also, the government will spend less on income support and unemployment benefits. Therefore, the budget deficit will decrease. Also, the government could decide to spend more on investing in the economy, e.g. spending on better roads. This will enable higher rates of growth in the long term.

An increase of consumption... Continue reading "Factors Influencing GDP Growth and Stability" »

Exercises in International Trade

1. Define the Following Terms:

• Forwarding Agent: A person, agency, or enterprise engaged in the collection, shipment, and delivery of goods. For example, a company that arranges the transportation of products from a manufacturer to a retailer.
• Green Channel: The route followed when passing through customs at an airport or other port of entry for passengers who claim to have no dutiable goods to declare.
• Customs: The official organization responsible for collecting taxes (duties) on goods entering a country and preventing the entry of illegal goods.
• Freight: Goods transported in bulk by truck, train, ship, or aircraft.
• Invoice: A document listing goods supplied or services rendered, stating the sum of money owed for

Advantages of Strategic Alliances

Technology Exchange

This is a major objective for many strategic alliances. Many breakthroughs and major technological innovations are based on interdisciplinary and/or inter-industrial advances. As a result, it is increasingly difficult for a single firm to possess the necessary resources or capabilities to conduct its own effective R&D efforts. This is further perpetuated by shorter product life cycles and the need for companies to stay competitive through innovation. Some industries that have become centers for extensive cooperative agreements are:

• Telecommunications
• Electronics
• Pharmaceuticals
• Information Technology
• Specialty Chemicals

Global Competition

There is a growing perception that global battles between... Continue reading "Strategic Alliances: Advantages, Risks, and Partner Selection" »

Fixed Costs

Expenses that do not change as a function of the activity of a business, within the relevant period.

Price-Elastic Demand Curve

When the price goes down a little, volume increases significantly. When the price goes up a little, volume decreases significantly. Many grocery items are price elastic.

Price-Inelastic Demand Curve

Volume does not change much, even with significant price changes. Products like critical raw materials, electricity, and heart pacemakers are price inelastic.

Tactical Pricing

Tactical pricing is the ongoing stream of pricing decisions the firm makes daily.

Pricing Toolkit

A set of pricing tactics for the firm to change a product's price.

Vision

A description of an ideal future state; an impressionistic picture of what... Continue reading "Key Business Concepts: Pricing, Control, and Performance" »

The Depression led to a loss of confidence in the economic future and major political changes. In the 1932 presidential election, Franklin D. Roosevelt (Democrat) swept to a landslide victory over Herbert Hoover (Republican). FDR argued that the Depression was due to faults in the capitalist economy and proposed government intervention to remedy the situation. FDR had been confined to a wheelchair since an attack of polio in 1921, and his long battle to rebuild his career had deepened his empathy with human suffering. He was the first president of the radio age and understood the importance of transmitting confidence.

The New Deal programs (1933-39) aimed to stabilize the economy, regulate commercial institutions, create internal demand, and... Continue reading "The New Deal Era: Government Intervention and Economic Stabilization" »

GNP/GDP 4 elements:

Developing Export Strategy

Companies develop this strategy when customers in other countries request their goods.

Step 1: Identify a Potential Market

A company should conduct market research and analyze the results. Example: ART BRZ

Step 2: Match Needs to Abilities

Determine whether the company can meet the needs of the market. Example: Air conditioning

Step 3: Initiate Meetings

Build trust and develop a cooperative environment among all parties. Example: Arizona Companies

Step 4: Commit Resources

Allocate the company's human, financial, and physical resources to the project.

Export/Import Financing

1. Open Account

Export/Import financing where an exporter ships merchandise and later bills the importer for its value. Example: MGT briefcase

2. Advance Payment

Export/... Continue reading "International Business Strategies: Exporting, Financing, and Entry Models" »