Key Concepts in Economics, Business, and Ethics
Economic Ideologies
- Communism: An economic ideology where the government or state essentially owns and controls all major factors of production.
- Socialism: An economic ideology where the government or state plays a significant role in the economy.
- Capitalism: An economic ideology where businesses are privately owned, strong individual incentives exist, and the government plays a minimal role in the economy.
Intellectual Property
Intellectual Property: Property that is the product of intellectual rather than physical activity.
Property Protections
- Patent: The right granted to the inventor of a product or process that excludes others from selling, making, or using the invention for a certain period.
- Trademark: A distinctive phrase, name, word, picture, symbol, or design, or a combination of these, that identifies a given business’s service or product and is owned by said business.
- Genericized Trademark: A trademark that has become so well known or colloquial that it now describes a general class of product or service, as opposed to a specific product or service as intended by the trademark’s owner.
- Copyright: The exclusive legal right that authors, playwrights, publishers, artists, and composers have to publish and disseminate their work as they see fit.
Ethics and Integrity
- Ethics: The branch of philosophy that addresses the values pertaining to human behavior, with regard to the rightness and wrongness of actions and to the goodness and badness of the intent and results of such actions.
- Integrity: Adherence to moral and ethical principles, soundness of moral character, and honesty. As a practical matter, a person of integrity knows what is right and has the courage to do it.
International Business Strategies
- Export-Import Business: A relatively low-risk business operation that involves penetrating foreign markets by exporting or importing merchandise of all kinds at competitive prices for domestic consumption.
- Licensing: The practice in which a company or individual provides a foreign partner with the technology (patented technology, copyright, etc.) to manufacture and sell products or services in a target country for an annual license fee.
- Franchising: The practice in which the parent firm is obligated to provide specialized equipment and/or services (e.g., product specification and adaptation, pricing, promotion, and distribution strategies) and sometimes funding for some startup costs, to franchisees in return for an annual fee.
- Strategic Alliances: An agreement between two or more firms that does not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period.
- International Joint Venture: A business that is jointly owned and operated by two or more firms (usually one from the host country and the other from another country) that pool their resources (labor, capital, technology, and management) to penetrate the host country’s markets, generate and split profits, and share commercial risks.
Acquisition
Acquisition: Purchase of established firms abroad with the goal of using the existing production, marketing, and distribution networks and of having instant access to foreign markets that fit the purchasing firm’s global strategy.
Market Entry Strategies
- Entering high-growth markets.
- Entering stable, high-income markets.
- Entering markets with monopolistic market structures.
- Entering trade-restricted sectors.