Factors that affect global success

Why is the stability of a foreign government important for global business strategy?

• It ensures low production costs

• It provides a predictable environment for business operations

• It guarantees high demand for products

• It reduces the need for marketing efforts

What is one reason countries with good relationships are more likely to develop Free Trade Agreements (FTAs)?

• To standardize their political systems

• To simplify trade and enhance economic benefits

• To restrict cultural exchanges

• To increase tariffs on each other’s goods

How might a disagreement between governments impact global business?

• It could lead to increased consumer spending

• It could result in economic sanctions or trade embargoes

• It would have no impact on business operations

• It would increase competition within the domestic market

What is ownership risk in the context of global business?

• The risk of losing market share to competitors

• The risk of government takeover or expropriation of a business

• The risk of not being able to patent a product

• The risk of changes in consumer preferences

Which of the following best describes expropriation?

• A government policy to promote foreign investment

• A government taking control of a privately-owned business

• A company merging with a foreign competitor

• A reduction in trade barriers between countries

Which of the following is an example of operational risk?

• Currency devaluation

• Government expropriation of assets

• Legal barriers to business operations such as finance, safety, and employment regulations

• Technological advancements by competitors

What is one way a business can manage economic risks associated with currency fluctuations?

• Hiring legal experts to navigate local regulations

• Implementing strict quality control measures

• Using hedging strategies to lock in exchange rates

• Reducing product prices significantly

Governments sometimes intervene in markets to 'save' failing businesses from closing by providing financial support.

This refers to?

What does a patent provide to its owner?

• Exclusive rights to manufacture and sell a product

• The ability to trademark a logo

• The right to free trade across international borders

• Exclusive rights to import goods

Which organization administers the Patent Cooperation Treaty (PCT)?

• United Nations (UN)

• World Intellectual Property Organization (WIPO)

• International Chamber of Commerce (ICC)

• World Trade Organization (WTO)