Bussiness Q&a Essay

761 Words Feb 12th, 2014 4 Pages
Chapter Three
The World Marketplace: Business without Borders

Review Questions

1. What countries represent the largest global business opportunities for the next decade? What factors determine the size of the opportunity? China, India and Brazil are some of the largest growing global businesses. These comes from many different factors; GDP growth and population are two major causes. China has the largest populations in the world along with the fastest growing GDP percentages. Brazil’s population is not as large but does has a high GDP percentage, and also a high Dollar Pre Capital GDP.

2. Why do companies tend to thrive in global markets when their country of origin enjoys a comparative advantage
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Instead of relying only on domestic workers, many companies also outsource some of their labor into foreign markets. This practice can have negative effects on the economy overall, individual businesses can often benefit from this practice. Outsourcing offshore can allow companies to tap into foreign markets and expand their businesses.

6. Outline the potential pros and cons of the 3 key strategies for developing foreign markets: exporting, licensing and franchising, and direct investment.

Exporting
|Pros: |Cons: |
| | |
|Access to Factors of Production |Product Modification |
|Reduced Economic Risk | Export Licenses and Documentation |
|Inflow of Innovation | Financial Risk |

Licensing and Franchising
|Pros: |Cons: |
| Marketing Support |Company Image |
| Business

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