 |  Management: Skills and Application, 10/e Leslie W Rue,
Georgia State University - Emeritus
Lloyd L Byars,
Georgia Institute of Technology
International Business
Chapter Summary| 1. Explain why countries trade with each other. Countries trade for several different reasons. One country may not be able to produce a good it wants. Another reason is that one of the countries may have an absolute advantage over another country. Another reason is that countries produce according to the law of comparative advantage.
2. Explain why companies export and import. One reason for exporting is to increase sales. Companies also export to diversify their sources of revenue. Companies import goods in order to use them to produce other goods or to sell them to customers. Companies also import products that they can resell in their own countries.
3. Explain how and why countries restrict international trade. To help domestic manufacturers compete against foreign companies, governments sometimes impose protectionist measures, such as tariffs, quotas, and other types of restrictions.
4. Describe a global economy. A global economy is one in which companies compete actively with businesses from all over the world.
5. Explain e-commerce. E-commerce refers to sales made over the World Wide Web.
6. Describe a free trade area. A free trade area is a region within which trade restrictions are reduced or eliminated.
7. Describe the strategies organizations use to compete in the global economy. Companies can sell their products or services in foreign countries in various ways. Small companies often work through local companies, which are familiar with local markets. Large companies often establish sales, manufacturing, and distribution facilities in foreign countries.
8. Describe various ways used by companies to sell their products or services in the international market. Companies sell their products by working through a foreign intermediary, signing a licensing agreement with a foreign company, forming a strategic alliance, or becoming a multinational corporation. |
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2003 McGraw-Hill Higher Education