PIB- Tutorial 11 by Rae Hooi https://padlet.com/raehooi/5pyv98qjff0z Made with the strength to succeed en-us 2020-03-25 14:46:00 UTC 2026-01-11 18:25:36 UTC hello@padlet.com 1. Discuss how firms analyze foreign markets raehooi https://padlet.com/raehooi/5pyv98qjff0z/wish/475755119 2020-03-26 05:15:40 UTC https://padlet.com/raehooi/5pyv98qjff0z/wish/475755119 2. What are the key indicators in understanding a market’s potential? raehooi https://padlet.com/raehooi/5pyv98qjff0z/wish/475759344 Gross domestic product(GDP)
is crucial component of inflation.
When the GDP of the current year is compared to that of the previous year, it indicates how slowly or fast the country’s economy is contracting or growing. GDP is measurable by either totaling up the economy’s earned income or the economy’s spending power. Both measures are roughly equal.

Inflation determines the degree to which an investment’s real value has eroded as also the return rate required to compensate that erosion. In order to combat market risk, a risk premium is receivable  and this should be above the current inflation rate.

Labor
A country’s employment potential is undoubtedly a major gauge of its economic progress and has a great impact on its stock and bond markets.

Consumer & Investor Activity
When activity levels of consumers fluctuate, it directly impacts corporate profits as also stock prices. Consumer confidence assumes significance here as a more confident consumer is most likely to spend more. The reverse happens when their confidence in the economy dips. With markets being usually forward looking, stock prices usually tend to reflect consumers’ future opinions.]]> 2020-03-26 05:24:45 UTC https://padlet.com/raehooi/5pyv98qjff0z/wish/475759344 3. What is international licensing? What are its advantages and disadvantages? raehooi https://padlet.com/raehooi/5pyv98qjff0z/wish/475759557 International Licensing -Transaction in which a firm in one country (the licensor) sells the right to use its intellectual 
property to a firm located in a second country (the licensee) 
for a fee.

Advantage 
  • Low Financial Risk - licensor fully investigates its market opportunities and the abilities of its licensees

  • Market Assessment - Licensees benefit through the opportunity to make and sell products and services that have been successful in other international markets

  • Sales Opportunities

Disadvantage
  • Limited Market Opportunities - licensor and licensee depend on each other to maintain product quality and promote the product's brand image.
  • Potential Litigation - if the licensee or licensor does not adhere to the agreement, costly and tedious litigation may hurt both parties
  • Competitive Issues - sharing technology will create a future competitor
]]> 2020-03-26 05:25:12 UTC https://padlet.com/raehooi/5pyv98qjff0z/wish/475759557 4. What is FDI? What are its three basic forms? What are the relative advantages and disadvantages of each? raehooi https://padlet.com/raehooi/5pyv98qjff0z/wish/475759952 Foreign direct investments (FDI) are investments made for the purpose of actively controlling property, assets, or companies located in host countries.
There are three methods for FDI:

1.     building new facilities (called the greenfield strategy)


2.     buying existing assets in a foreign country (called the acquisition strategy or the brownfield strategy)


3.     participating in joint ventures.

Advantages of greenfield strategy: 

1.     Select the most useful site 


2.     Construct modern facilities


3.     Reap economic development incentives 


4.     Start with a clean slate 


5.     Get acclimated to new business culture.

Disadvantages of greenfield strategy: 

1.     Implementation takes time and patience 


2.     Location may be costly or unavailable 


3.     Must deal with government regulations 


4.     Must recruit and train a local workforce 


5.     May be stigmatized as a “foreign firm”.

 
Advantages of acquisition strategy: 

1.     Control Over the Firm’s Resources 


2.     Generates Immediate Revenues 


3.     Adds No New Capacity to the Industry.

 
Disadvantages of acquisition strategy: 

1.     Assumes the Firm’s Liabilities 


2.     Inherits Unresolved Problems 

Requires Substantial Up-Front Spending. 
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