The firms often better prepared to leap into global markets and react quickly to opportunities are:

Importingis buying products from another country whileexportingis selling products to another country.Some reasons forcontract manufacturing:Labor costs in foreign markets might be lower than the labor costs in the firm’s host country, it enables aproducer or business to experiment in a new market without incurring heavy start-up costs, and it can be used to temporarily meet an unexpectedincrease in orders.The definition ofjoint venturestates: partnership in which two or more companies, often from different countries, join to undertake a major project.Acommon marketortrading blocis a regional group of countries with a common external tariff, no internal tariffs, and coordinated laws to facilitateexchange among members.A limit on the quantity of products in a certain category that a nation can import is called animport quota.Dumpinginvolves selling products in a foreign country atlowerprices than those charged in the producing country.Increased competition and a loss of jobs in manufacturing is one impact of globalization on U.S. businesses.The definition ofdirect foreign investmentstates: the buying of permanent property and businesses in foreign nations.Small and medium-sized firms are often better prepared to leap into global markets because they can react quickly to opportunities.The primary function of protective tariffs is to raise the price of imported products so that domestic goods are more competitively priced.The definition oftrade surplusstates: a favorable balance of trade, which occurs when the value of a country’s exports exceeds that of its imports.Why is it important to analyze the local technological and physical forces in the business environment before doing global business in a given market?The communication systems might be primitive; foreign transportation systems might be affected by weather.Unlike joint ventures, strategic alliances share markets and expertise.A weak transportation infrastructure results inphysicalbarrier to global business.Licensingis the global strategy in which a firm allows a foreign company to produce its product in exchange for fee.Revenue tariffsare used to raisemoney for the government.Countertradingis a complex form of bartering in which several countries might be involved, each trading goods for goods or services for services.The benefits of creating a joint venture when doing business internationally include access to restricted local markets, shared market expertise, andshared technology.The possibility of having all foreign assets expropriated is a disadvantage offoreign direct investment.A small business owner wants to increase sales and cut production costs, and decides that importing materials and exporting his product are two waysto accomplish this. This small business owner is engaging inglobal trade.

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