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Q1) Definition of Globalization and de-globalization— costs and benefits?
Globalization is the process by which businesses or other organizations develop international influence or start operating on an international scale.
Costs: Costs to the Companies 1-Increased competition2-Difficult to manage quality (destroy brand)3- Regulations and culture to deal with
Costs to Consumers = None.
Cost to the Country 1- Culture Problems 2- Money going out of country3-Balance of trade
Benefits: Benefits to Companies: Bigger marke- More revenues/topline/sales-Bigger profits
Benefits to Consumers Lower prices-More variety-Easy to buy global products
Benefits to the Country More jobs-Better economic activity-More diversity.
De-globalization is the process of diminishing interdependence and integration between certain units around the world, typically nation-states. Q2) Collectivism and Individualism? What are these? And how do they work?
Collectivism is the practice or principle of giving a group priority over each individual in it. Individualism is the habit or principle of being independent and self-reliant.Q3) definition of Democracy Vs Totalitarianism? Democracy is a representative democracy, citizens periodically elect individuals to represent them, and political freedoms are guaranteed by a constitution. Totalitarianism is atotalitarian state, political power is monopolized by a party, group, or individual, and basic political freedoms are denied to citizens of the state.
Q4) What are Free Market, command, and Mixed Economies? Free Market EconomyIn a market economy, prices are free of controls, and private ownership is predominant. Command Economy In a command economy, prices are set by central planners, productive assets are owned by the state, and private ownership is forbidden. Mixed Economy A mixed economy has elements of both a market economy and a command economy.Q5) Three Theories of Trade? Mercantilists; It is in a country’s best interests to run a balance-of-trade surplus. Trade is a zero-sum game, in which one country’s gains cause losses for other countries. Absolute Advantage; Countries differ in their ability to produce goods efficiently. The theory suggests that a country should specialize in producing goods in areas where it has an absolute advantage and import goods in areas where other countries have absolute advantages. Comparative Advantage; This theory suggests that it makes sense for a country to specialize in producing those goods that it can produce most efficiently, while buying goods that it can produce relatively less efficiently from other countries—even if that means buying goods from other countries that it could produce more efficiently itself.Q7) Why Foreign Direct Exchange Markets and What are these markets?One function of the foreign exchange market is to convert the currency of one country into the currency of another. A second function of the foreign exchange market is to provide insurance against foreign exchange risk. Q9) Definitions of essay on inflation?a general increase in prices and fall in the purchasing value of money. Q12) Pegged and Unpegged? Pegged is A currency peg is a country or government’s exchange rate policy whereby it attaches, or pegs, the central bank’s rate of exchange to another country’s currency.Unpegged is A currency is not attached to another country currency.
Q6) definition, costs and benefits of Foreign Direct investment, licensing, exporting?Foreign Direct investment; a company invests 10% or more in another country’s operation. Benefits; Economic stimulation for the receiving country, More employment, Increased GDP Costs; More competition for local business in the receiving country, Domestic wealth going abroad, the country of origin of the FDI companies lose in terms of balance of payment Licensing; is an arrangement in which one company gives another company permission to manufacture its product for a specified payment. Benefits; Less cost of global business (lower capital requirement), Higher return on investment, Lower risk due to low investment Costs: Fraud, Low control over quality, Bad reputation for the Brand Exporting; manufacturing products in the country and then transporting these products out of the country.Benefits; Less investment compared to FDI, Positive impact on balance of payments, Lower cost of products for the importing country.Costs; Cost of transportation, Exchange Rate Fluctuations, Product modification to the importing country culture difficulties,Taxes and Tariffs. Q8) Definitions of Spot Rate, Forward Rates and Currency Swaps? Foreign exchange risk can be reduced by using the following: Spot Rate; The spot exchange rate is the exchange rate at which a dealer converts one currency into another currency on a particular day.-Forward Rate; a forward exchange rate is an exchange rate governing future transactions. -Currency Swaps; A swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates.
Q11) Essay possible factors that can effect Exchange Rate Forecasting? The most common approach to exchange rate forecasting is fundamental analysis. This relies on variables such as: money supply –Growth-inflation rates-nominal interest rates-balance-of-payments
Q10) What is the correlation between Inflation and Interest Rates?as interest rates are reduced, more people are able to borrow more money. The result is that consumers have more money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest rates are increased, consumers tend to save as returns from savings are higher. With less disposable income being spent as a result of the increase in the interest rate, the economy slows and inflation decreases. Q13) Name the five factors that affect the strength of a currency. Explain any three?
money supply; is the entire stock of currency and other liquid instruments circulating in a country’s economy-Growth; –inflation rates; the rate at which prices increase over time, resulting in a fall in the purchasing value of money.-nominal interest rates–balance-of-payments; the difference in total value between payments into and out of a country over a period.
Q14) Possible essay or short answer Exchange Rate Risks?
The three types of exposure to foreign exchange risk are -transaction exposure-translation exposure-economic exposure.
To minimize the Exchange Rate Risks by the tactics that insureagainst transaction and translation exposure include -buying forward-using currency swaps-leading and lagging payables and receivables.
Q15) List Ps of marketing?Product; creating value-Price; Capturing value-Place; Delivery valuePromotion; Communication value
Q16) What is Value Proposition?
Place, describes all activities necessary to get the product to the right customer when the customer wants it.
Q17) What is Value Creation? The fundamental purpose of Marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs.
Q18) What are the four factors that help create Sustainable Competitive Advantage?
Q19) What is Target Market and Segmentation?
Target Market; Consists of people who are willing and able to buy a company’s products or services-Segmentation; is different subgroups within a company’s target market.
Q20) BCG Matrix?Evaluate Performance and Make Adjustments
