Balance of trade Critical Thinking Questions

Balance of trade

1. How can a company use a licensing agreement to enter world markets?

2. What two fundamental product strategies do companies choose between when selling their products in the global marketplace?

3. What is the balance of trade, and how is it related to the balance of payments?

4. What is protectionism?

5. What is a floating exchange rate?

Questions for Analysis

  • 6. Why would a company choose to work through intermediaries when selling products in a foreign country?
  • 7. How do companies benefit from forming international joint ventures and strategic alliances?
  • 8. What types of situations might cause the U.S. government to implement protectionist measures?
  • 9. How do tariffs and quotas protect a country’s own industries?
  • 10.Ethical Considerations. Is it unethical for a U.S. company to choose export markets specifically for their less-stringent consumer protection standards? Why or why not?

Questions for Application

  • 11. Suppose you own a small company that manufactures baseball equipment. You are aware that Russia is a large market, and you are considering exporting your products there. However, you know you need to learn more about Russian culture before making contact with potential business partners. What steps could you take to improve your cultural awareness?
  • 12. How has your current employer or any previous employer been affected by globalization? For instance, does your company compete with lower-cost imports? (If you don’t have any work experience, ask a friend or family member.)
  • 13. Would a major shopping mall developer with experience all across Europe be a good strategic alliance partner for your fast-food chain’s first overseas expansion effort? Why or why not?