GLOBAL BUSINESS Ist Internal Assessment Important Questions 1.

International Business is the process of focusing on resources of the globe and objectives of the organisation on global business opportunities and threats. 2. Stages of International Business Domestic company International Company Multi ational Company !lobal Company "ransnational Company

#. $If it is not happening in the home country% it is not happening& is the motto of domestic company. '. "he International Company holds the mar(eting mi) constant and e)tends the operations to ne* countries. +. International Company remains ethnocentric or domestic country oriented. ,. M C is also referred to as multidomestic company. -. "he international company turns into Multinational Company *hen they start responding to the specific needs of the different country mar(ets regarding product% price and promotion. .. / global company is the one *hich has either global mar(eting strategy or a global strategy. 0. "ransnational Company produces% mar(ets% invests and operates across the *orld. 11. "ransnational Company is an integrated global enterprise *hich lin(s global resources *ith global mar(ets at profit. 11. Mention any # characteristics of " C !eocentric orientation Information ac2uisition 3ision and aspiration 4urchasing !eographic Scope

12. Douglas 5ind 6 4elmutter advocated four approaches to International Business. 1#. /pproaches of IB 7thnocentric 4olycentric 8egiocentric !eocentric

1'. Companies sometimes e)port belo* cost or belo* their home country price *hich is called dumping. 1+. "ariff affect 4rice and on "ariff affects either price or 9uantity. 1,. Instruments of trade control 1-. "ariff if collected by the e)porting country it is (no*n as an e)port tariff. 1.. "ariff if collected by the importing country it is (no*n as an import tariff. 10. "ariff if collected by a country through *hich the goods have passed it is a transit tariff. 21. If the government assesses the tariff both a specific duty and an advalorem duty on the same product the combination is a compound duty. 21. Import "ariff primarily serves as a means of raising the price of imported goods so that domestically produced goods gain a relative price advantage. 22. If the receipient country is re2uired to spend the funds in the donar country is (no*n as tied loan or tied aid. 2#. "o encourage domestic producers from the foreign competitors% governments pay to domestic producer by reducing operations cost% such payments are called subsidies. 2'. / country may establish e)port 2uota to assure domestic consumers of a sufficient supply of goods at a lo*er price. 2+. / special type of 2uota that prohibits all trade is called embargo. 2,. Buy local legislation is also called as :ocal Content 8e2uirement. 2-. :ocal Content 8e2uirement is a condition that re2uires some specific fraction of a product imported be produced domestically. 2.. :ocal Content 8e2uirement can be in 4hysical terms 2

3alue terms

20. 4otential importers or e)porters secure permission from governmental authorities before conducting trade transactions% a re2uirement (no*n as import license. #1. Customs ;nion has the characteristics of abolishing all the restrictions and barriers on trade and adapts a uniform commercial policy. #1. Common mar(et allo*s free mobility of production factors such as labour and capital. #2. 7conomic ;nion has uniformity in monetary policy and fiscal policy among the member countries. ##. /<"/= orth /merican <ree "rade /greement #'. /<"/ came into being on >an 1% 100' #+. /S7/ ="he /ssociation of South 7ast /sian ations #,. / group of si) countries agreed in >anuary 1002 to establish a C74" ?Common 7ffective 4referential "ariffs@ 4lan #-. /<"/=/sean <ree "rade /rea #.. S//8C=South /sian /ssociation for 8egional Cooperation. #0. "he boo( Customs ;nion issue is *ritten by >acob 3iner '1. Si) countries India% Bangladesh% Bhutan% 4a(istan% Maldives and Srilan(a adopted a declaration on S//8C in /ugust 10.#. CONCEPTS 1. Multi ational 7nterprise 2. 7thnocentric /pproach #. 8egiocentric /pproach '. :ist economic reasons for !overnment intervention +. Balance of 4ayment ,. Define <ree "rade /rea -. Define "ariff .. 5hat is advalorem duty 0. Define 9uota 11. /<"/=Arigin% <ull <orm% members

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