World population and market statistics support the expansion of U.S. business into global markets in that the U.S. is a market of over 280 million people, but there are over 6 billion potential customers in the 193 countries that make up the global market.
Comparative advantage states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products it cannot produce as effectively or efficiently. Examples of this concept in actual global markets include the advantage the U.S. enjoys in producing computer chips.
The balance of trade is a nation's ratio of exports to imports, and the balance of payments is the difference between money coming into a country from exports and money leaving the country for exports plus money flows coming into or leaving a country from other factors such as tourism.
Dumping is the practice of selling products in a foreign country at lower prices than those charged in the producing country.
p. 81
The advantages of licensing as a method of entry in global markets include gaining additional revenues from a product that it normally would not have generated in its home market, and its disadvantages include loss of its trade secrets and agreed-on royalties.
Services provided by an export trading company include matching buyers and sellers from different countries.
Unlike joint ventures, strategic alliances do not typically involve sharing costs, risks, management, or even profit
A multinational corporation is an organization that manufactures and markets products in many different countries, has multinational stock ownership, and multinational management. Three multinational corporations are General Motors, Siemens, and Royal Dutch/Shell.
p. 92
Major hurdles to successful global trade include sociocultural, economic, and financial forces.
Two cultural and societal forces most likely to affect global trade efforts are social structures and religion.
The advantages of trade protectionism and tariffs include the survival and growth of domestic producers; their disadvantages include retaliation.
p. 94
The economic risks of doing business in countries like the People's Republic of China or Russia include social, political, and financial risk.
Important factors that will have an impact on global trading include the growth of the Internet and advances in e-commerce.
