LESSON 5

• Domestic business


  A business that acquires all its resources and sells its products or services within a single country
• International business


  A business that is primarily based in a single country but acquires some meaningful share of its resources or revenues (or both) from other countries
• Multinational business

  One that has a worldwide marketplace from which it buys raw materials, borrows money, and manufactures its products and to which it subsequently sells its products
• Global business

  A business that transcends national boundaries and is not committed to a single home country
• Levels of international business activity

  • Domestic business
  • International business
  • Multinational business
  • Global business
• Market economy

  Economy based on the private ownership of business and allows market factors such as supply and demand to determine business strategy
• Market system

  Clusters of countries that engage in high levels of trade with each other
• Exporting

  Making a product in the firm's domestic marketplace and selling it in another country
• Importing

  Bringing a good, service, or capital into the home country from abroad
• Licensing

  An arrangement whereby a firm allows another company to use its brand name, trademark, technology, patent, copyright, or other assets in exchange for a royalty based on sales
• Strategic alliance

  A cooperative arrangement between two or more firms for mutual gain
• Joint venture

  A special type of strategic alliance in which the partners share ownership of a new enterprise
• Direct investment


  When a firm headquartered in one country builds or purchases operating facilities or subsidiaries in a foreign country