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International Business Notes

In: Business and Management

Submitted By Vourexacis
Words 956
Pages 4
International Business (lectures)

Balance of payments
It has to balance (zero). In theory, it should always be zero, but in real life, it does not always balance.
A current account surplus of goods and services exceed imports. The currency here is likely to rise.
A current account deficit means imports of goods and services are greater than exports. The US has a great debt. You often have to borrow in this case, if you do not have a savings. It can be easy to borrow one time, but eventually you have to pay the money back that you have borrowed, plus interest. The value of the currency of the given country will fall, and therefore it can be more difficult to export goods to other countries.
The US has a low savings rate compared to some of the more poor countries in the world.

FDI - Foreign direct investment
Greenfield investment, you build an enterprise from the bottom up.
Horizontal: FDI in the same industry as the firm operates at home
Vertical, two types: * Backward: * Forward:
FDI is expensive and it is risky compared to just exporting goods.
In the past governments were skeptic about FDI’s, but now they want to try to have a positive effect of FDI’s.

Culture
Cultural preferences will stay for many years, so therefore a company needs to modify their products, so it meet the costumer’s needs in a given country. Maybe a company can just change the package, so consumer are able to buy the product.
Customize an escalator for India? * Adjust the speed * Make it bigger, change the capacity * The clothes should not get stock in the escalator.
A company wants to connect with the implicit things in a society, culture, and the things that you cannot see. A company does not want to connect with the things that you can see, like clothing, food etc.
Progression in cultural competence is to have knowledge about the

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