BUSI 311 QUESTIONS AND ANSWERS EXAM LATEST
UPDATE.Buy Quality Materials!
Small and medium-sized enterprise (SME)
a firm with fewer than 500 employees in the United States, or with fewer than 250
employees in the European Union
Entrepreneurial Skills
Innovation (VALUE), Risk Taking, Tolerance for Ambiguity, Ability to Pivot
(ORGANIZATION)
Venture capitalist (VC)
An investor who provides risk capital for early-stage ventures
Microfinance
´A practice to provide micro loans ($50-300) used to start small businesses with the
intention of ultimately lifting the entrepreneurs out of poverty
Crowdfunding
Efforts by entrepreneurial individuals and groups to fund their ventures by drawing on
relatively small contributions from a large number of individuals without standard
financial intermediaries
Letter of credit (L/C)
A financial contract that states that the importer's bank will pay a specific sum of money
to the exporter upon delivery of the merchandise
Institution-based view
A leading perspective in global business that suggests that the success and failure of
firms are enabled and constrained by institutions.
Resource-based view
a model that sees certain types of resources as key to superior firm performance
Foreign Market Entries
where, when, how
liability of foreignness
The inherent disadvantage that foreign firms experience in host countries because of
their non-native status.
Institution Based View - Overcoming the Liability of Foreignness
•Regulatory Risks (Political, Legal and Economical Rules and Regulations)
•Trade and Investment Barriers (Tariffs and others rules directed at Foreign Firms)
•Differences in Cultures, Norms and Values
Each of these elements will increase the liability which foreign firms will face when they
enter a foreign market
Use your resources and capabilities to overwhelm competitors - to gain an advantage
First and Last-Mover Advantages
benefits that accrue to firms that enter the market, either first or last
Scale of entry
, The amount of resources committed to entering a foreign market.
Large scale entry
Good: Strong commitment, easier to attract customers, discourage other firms from
trying to enter
Bad: inflexibility, all eggs in one basket
small scale entry
allows a firm to learn about a foreign market while limiting the firm's exposure to that
market
Nonequity Modes of Entry
no equity investment by foreign entrant
Direct Exports advantages
economies of scale in production concentrated in home country, better control over
distribution
Direct Exports Disadvantages
High transportation costs for bulky products.
Marketing distance from customers
Trade barriers and protectionism
Indirect Exports advantages
1. focus on production
2. avoid export processes
Indirect Exports disadvantages
- Less control over distribution
- Inability to learn how to compete overseas
Exports
goods produced domestically and sold abroad
contractual agreement
agreement between two or more people stating that one party is to do something in
return for something provided by another party
Licensing/Franchising Advantages
- low development costs
- low risk in overseas expansion
Licensing and Franchising Disadvantages
- little control over technology and marketing
- may create competitors
- inability to engage in global coordination
Licensing and Franchising
One organization giving another organization the right to use its brand name,
technology, or product in return for a lump sum payment or fee based on sales.
turnkey project
A project in which a firm agrees to set up an operating plant for a foreign client and
hand over the "key" when the plant is fully operational.
Turnkey Project Advantages
Ability to earn returns from process technology skills in countries where FDI is restricted
Turnkey Project Disadvantages
creating efficient competitors, lack of long-term market presence
R&D contract
UPDATE.Buy Quality Materials!
Small and medium-sized enterprise (SME)
a firm with fewer than 500 employees in the United States, or with fewer than 250
employees in the European Union
Entrepreneurial Skills
Innovation (VALUE), Risk Taking, Tolerance for Ambiguity, Ability to Pivot
(ORGANIZATION)
Venture capitalist (VC)
An investor who provides risk capital for early-stage ventures
Microfinance
´A practice to provide micro loans ($50-300) used to start small businesses with the
intention of ultimately lifting the entrepreneurs out of poverty
Crowdfunding
Efforts by entrepreneurial individuals and groups to fund their ventures by drawing on
relatively small contributions from a large number of individuals without standard
financial intermediaries
Letter of credit (L/C)
A financial contract that states that the importer's bank will pay a specific sum of money
to the exporter upon delivery of the merchandise
Institution-based view
A leading perspective in global business that suggests that the success and failure of
firms are enabled and constrained by institutions.
Resource-based view
a model that sees certain types of resources as key to superior firm performance
Foreign Market Entries
where, when, how
liability of foreignness
The inherent disadvantage that foreign firms experience in host countries because of
their non-native status.
Institution Based View - Overcoming the Liability of Foreignness
•Regulatory Risks (Political, Legal and Economical Rules and Regulations)
•Trade and Investment Barriers (Tariffs and others rules directed at Foreign Firms)
•Differences in Cultures, Norms and Values
Each of these elements will increase the liability which foreign firms will face when they
enter a foreign market
Use your resources and capabilities to overwhelm competitors - to gain an advantage
First and Last-Mover Advantages
benefits that accrue to firms that enter the market, either first or last
Scale of entry
, The amount of resources committed to entering a foreign market.
Large scale entry
Good: Strong commitment, easier to attract customers, discourage other firms from
trying to enter
Bad: inflexibility, all eggs in one basket
small scale entry
allows a firm to learn about a foreign market while limiting the firm's exposure to that
market
Nonequity Modes of Entry
no equity investment by foreign entrant
Direct Exports advantages
economies of scale in production concentrated in home country, better control over
distribution
Direct Exports Disadvantages
High transportation costs for bulky products.
Marketing distance from customers
Trade barriers and protectionism
Indirect Exports advantages
1. focus on production
2. avoid export processes
Indirect Exports disadvantages
- Less control over distribution
- Inability to learn how to compete overseas
Exports
goods produced domestically and sold abroad
contractual agreement
agreement between two or more people stating that one party is to do something in
return for something provided by another party
Licensing/Franchising Advantages
- low development costs
- low risk in overseas expansion
Licensing and Franchising Disadvantages
- little control over technology and marketing
- may create competitors
- inability to engage in global coordination
Licensing and Franchising
One organization giving another organization the right to use its brand name,
technology, or product in return for a lump sum payment or fee based on sales.
turnkey project
A project in which a firm agrees to set up an operating plant for a foreign client and
hand over the "key" when the plant is fully operational.
Turnkey Project Advantages
Ability to earn returns from process technology skills in countries where FDI is restricted
Turnkey Project Disadvantages
creating efficient competitors, lack of long-term market presence
R&D contract
