Business in the International Economy

BUSINESS IN THE INTERNATIONAL ECONOMY

ASSIGNMENT – 1

PART – A

1. If demand price elasticity measures 5,this implies that consumers would:

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1. Economic profit is:

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1. In the long run, a monopolistic competitive firm will operate at a price that:

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1. Which of the following would NOT be considered an example of foreign direct investment (FDI)?

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1. In terms of international business, market globalization can be viewed as a ------------.

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1. Which of the following statements is true about the firm-level consequence of market globalization?

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1. Peter, a graduate student from Michigan, ordered a notebook from Opus Inc., an American MNC manufacturing and selling computers and related products. The notebook that Peter ordered from Michigan was assembled in Opus ‘factory in Taipei. This exemplifies the ----------- stage in the international value chain.

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1. A born global firm is defined as -------------.

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1. Which of the following is characteristic of collectivist societies?

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1. Titania is a country characterized by a high-context culture. This implies that ---------.

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                                                                 PART – B

1. Discuss the impact of market globalization on consumer lifestyles and preferences around the world. Provide examples to illustrate your answer?

Globalization/Internationalization of businesses has had an extreme and largely beneficial impact on consumer attitudes world over. Lifestyles, preferences and perceptions have been drastically altered and the process is ongoing. This is particularly noticeable in the developing countries, where the consumer had limited choice of only locally produced products as trade barriers made access products manufactured elsewhere prohibitively expensive.

• Globalization, which has been facilitated by most nations lowering evolve barriers and permitting capital and technology inflow has boosted the economy of these nation and an increased precipitate earnings of their more prosperity.
• This is turn made it possible to acquire products which were not within reach for most.  

For Example:  Earlier the common man cannot effort to buy electronics but nowadays the technology grown up around the world even un developed countries, so common people can buy and use electronics for example television, mobile phones ect.

• Setting up cutting edge technology industry and exposure to sophisticated measurement practices have a highly beneficial impact on local business, which then started making their presence felt in overseas markets.
• The global market philosophy has also enhanced cultural perception and sensitivity between peoples of various countries.
• Increased market size has allowed economics of scale, vendering cheaper products which go a long way in reducing the gap in life styles of peoples of developed and developing nations.
• The mutual co-operation and interdependent of nations tends to reduce chances of government which result in the common man feeling secure and confident.

Market Globalization impact on consumer lifestyles and following examples:

Example 1:

• International newspaper journalist and editors, whenever they describe globalization by using pictures of American brands coca-cola and McDonald’s. To demonstrate the process of globalization, actually the American brands stretch out of a small number of branches around the world. These kind of global brands are neither appointed of the total consumption package nor of transnational trade. By using “index of transnationality”. The UNCTAD (United Nations conference on trade and development) measures the ratio of company’s foreign assets to total assets, by above measure.

Example 2:

• Nestle is the world’s famous foreign oriented company. The company outsourcing internationally 87% of its assets, 98% of its sales and 97% of workers.

Example 3:

• The main reason is McDonald’s succeed in international markets is the fact that in order to maintain a brand image and follow the same service standards around the world, its product offers has a local taste to the customers.
• For example the kiwi burger in New Zealand, a grilled salmon burger in Norway, The Maharaja Mac in India and The Croque Mcdo in France.

Example 4:

• One of the main impacts of globalization on consumer activity is coffee industry. Its impact by two ways directly and indirectly.
• Since 1960’s the price of South American coffee reached of $4 per pound. From that time with the expand globalization of coffee, the price regularly decreased because of the en-large production of coffee, not only in South America but also in around the world.