11197038
Description
Flashcards by Beth Machin, updated more than 1 year ago
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Created by Beth Machin
almost 7 years ago
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| Question | Answer |
| Why Does Australia Trade? | - Chooses from most competitively priced goods / services globally - Specialisation - Maximises eco. growth - Exports = 21% of GDP - Relies on China for 30% of trade - problem if China suffers |
| Why Countries Need to Export | 1. Economy - exports required to pay for imports 2. International Exchange 3. Employment 4. Education 5. Innovation - increased competitiveness 6. Info Tech - increased productivity / efficiency |
| Mercantilism | Maximise exports whilst minimising imports |
| Absolute Advantage | Exporting goods a country efficiently produces, trading them for imports efficiently produced elsewhere |
| Comparative Advantage | Trade should still occur even if country efficiently produces everything |
| Relative Factor Endowment | Countries have comparative advantage when they produce products that rely intensely on abundant resources |
| Uppsala Stages Model of Internationalisation | - Firms start exporting before utilising higher risk entry modes e.g. FDI (Rationale: enter foreign markets with greater psychic distance) |
| 'Internationalisation Process' Model | - Firms take gradual / incremental approach to internationalisation (rationale: firms gradually build 'experiential' knowledge to manage risk) |
| Business Network Internationalisation Process Model | (Rationale: markets are networks of relationships - necessary for successful internationalisation) |
| Reactive Exporting | Choice of export market given e.g. firm responds to unsolicited order from abroad (needs to examine / evaluate market before responding to order) - Risky w/o research - Overseas company provides info |
| Proactive Exporting | Firm decides to export 'proactively' - evaluate market opp / ensure opps are relevant to firm and capabilities / ensure product market fits consistently with long-term growth opps / profitability |
| Indirect Exporting | Exporters use independent marketing organisations in home country (By selling to / through channel partner) |
| Advantages of INDIRECT Exporting | - Market Entry / Sales Growth = fast - Channel partner's existing knowledge / networks - Sales / marketing / costs shared |
| Disadvantages of INDIRECT Exporting | - No control over pricing / branding / marketing - Must provide sales support for continuing growth |
| Direct Exporting | Selling directly to target markets (By own dependent unit e.g. export department or buy using foreign marketing organisations) |
| Advantages of DIRECT Exporting | - In control of pricing / brand - Own / maintain customer relationships |
| Disadvantages of DIRECT Exporting | - Market progress slower - Commit lots of time / energy / staff resources and money |
| Intra-Corporate Transfer | Type of exporting for MNCs - lend itself to tax maximisation |
| Piggyback | Cross between direct / indirect export (Occurs when one manufacturer uses its foreign distribution facilities to sell another companies products) |
| Advantage of PIGGYBACK | - Easy / low-risk way for smaller manufacturer to export through established firm without investing heavily in foreign marketing |
| Disadvantage of PIGGYBACK | - No control over marketing of products |
| Wholly Owned Subsidiaries Advantage + Disadvantage | Enables global strategic coord + |
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