International business chapters 1-4

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International business chapters 1-4
2015-01-27 19:02:51

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  1. globalization
    refers to the trend towards a more integrated global economic system
  2. What are the two key facets of globalization?
    • the globalization of markets 
    • the globalization of production
  3. globalization of markets
    the merging of historically distinct and separate national markets into one huge global marketplace
  4. globalization of production
    he sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor energy, land, and capital)
  5. goal of globalization of production(2)
    • Lower overall cost structure 
    • Improve the quality or functionality of the product to gain competitive advantage
  6. What is driving the move toward greater globalization?(2)
    • declining trade and investment barriers
    • technological change
  7. international trade
    occurs when a firm exports goods or services to consumers in another country
  8. foreign direct investment
    occurs when a firm invests resources in business activities outside its home country
  9. What are the implications of technological change for the globalization of production and the globalization of markets?
    • Lower transportation costs (Advances in Shipping and Logistics):
    • Make a geographically dispersed production system more economical 

    • Over 40% of US trade within multinational firms
    • Allow firms to better respond to customer demands

    • Lower communication costs (Advances in Information and Communication Technologies (ICT)):
    • Help create electronic global marketplaces 
    • Allow firms to connect with global operations in real time