Midterm IMS 3310- Henderson Questions And Answers Rated 100% Correct
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Course
IMS 3310- Henderson
Institution
IMS 3310- Henderson
FDI versus non equity modes of entry, what are the pros and cons to each? - ️️Non
equity: An agreement between two or more firms to work together on a certain project or
to operate in a paritcular market by establishing a new entity taht is jointly owned by all
the partner. The profits/losse...
Midterm IMS 3310- Henderson
FDI versus non equity modes of entry, what are the pros and cons to each? - ✔️✔️Non
equity: An agreement between two or more firms to work together on a certain project or
to operate in a paritcular market by establishing a new entity taht is jointly owned by all
the partner. The profits/losses, risks and the control of the operations are shared by all
the partners. It helps a firm to take the benefit of local partner's knowledge of the local
market. At the same time it involves the risk of opportunistic behavior by the partner and
chances of conflicts between the partners for control are also high.
Foreign Direct Investment: This has direct ownership of facilities to produce or market a
product in a foreign country. Establishing a wholly owned subsidiary is the most costly
method of serving a foreign market and the firm has to bear the full capital costs as well
as all the risks associated with overseas operations. But at the same time it provides the
highest degree of control over the operations.
Why is globalization important? - ✔️✔️International business is important because of
the increasing scale and scope of activities that occur across national borders.
What was Dubai's story? - ✔️✔️Dubai was faced with the challenge of not having a
future in terms of economic value with only a desert. So it's the people decided to build,
not only build structures build land out at sea.
Why do companies globalize? - ✔️✔️Companies tend to globalize to gain a larger
customer base, new revenue sources, competition, new capital, access to cheaper
labor, and access to resources.
What is globalization? - ✔️✔️The tendency toward an international integration of
goods, technology, information, labor and capital, or the process of making this
integration happen.
Why do firms and countries trade? - ✔️✔️Most countries trade for the need of
resources, demand factor conditions, supporting industries, strategy, structure, and
competition.
What are the major trading pacts? - ✔️✔️North American Free Trade Agreement
(NAFTA), European Union (EU), Association of Southeast Asian Nations (ASEAN),
Asia-Pacific Trade Agreement (APTA)
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