International markets
Introduced| English | Meaning |
|---|---|
| international markets/ˌɪntəˈnæʃənl ˈmɑːkɪts/ | international markets |
| exporting/ekˈspɔːtɪŋ/ | Selling goods or services to buyers in another country. |
| licensing/ˈlaɪsənsɪŋ/ | An arrangement permitting another party to use specified intellectual property or other rights under agreed conditions. |
| franchising/ˈfræntʃaɪzɪŋ/ | An arrangement allowing an operator to run a business using another firm's brand and business format under agreed conditions. |
| joint ventures/dʒɔɪnt ˈventʃəz/ | A business arrangement in which two or more parties cooperate on an enterprise and share its risks and returns. |
| direct investment/daɪˈrekt ɪnˈvestmənt/ | direct investment |
| economies of scale/ɪˈkɒnəmiz ɒv skeɪl/ | Falls in average production cost as the scale of output increases. |
| trade barriers/treɪd ˈbærɪəz/ | trade barriers |
| multinational companies/ˌmʌltɪˈnæʃənl ˈkʌmpəniz/ | Businesses with operations in more than one country. |
Selling to the world
- Once a firm outgrows its home market, the whole world beckons — billions of new customers.
- But international markets 国际市场 bring big opportunities and big risks.
International market lab
See how access to world markets changes quantity and price pressure.
Selling home-produced goods to customers abroad is:
Difficulty 1/5 · 100 coins + a small bonus on first completion today
Exporting sells domestic output overseas.
Letting a local firm sell under your brand for a fee is known as ______.
Difficulty 1/5 · 100 coins + a small bonus on first completion today
Franchising/licensing is a lower-risk entry method.
Ways to enter foreign markets
- Exporting 出口: selling home-made goods abroad.
- Licensing 许可经营 / franchising 特许经营: letting a local firm produce or sell under your brand.
- Joint ventures 合资企业 and direct investment 直接投资: setting up or partnering overseas.
Market entry modes range from low-commitment exporting to setting up an own branch abroad
Digital advertising screens: marketing increasingly happens online and on screens
Which are opportunities of entering international markets? (Select all that apply.)
Difficulty 2/5 · 140 coins + a small bonus on first completion today
Bigger markets, scale and risk-spreading are real gains; profit is never guaranteed.
Opportunities
- Access to larger markets and economies of scale 规模经济.
- Spreading risk across countries, and using cheaper resources or labour.
Which is a risk of trading internationally?
Difficulty 1/5 · 100 coins + a small bonus on first completion today
Currency swings, culture and trade barriers are key risks.
A multinational company (MNC) operates in more than one country.
Difficulty 1/5 · 100 coins + a small bonus on first completion today
MNCs span many countries and are economically powerful.
Risks and the role of MNCs
- Cultural differences, exchange-rate swings, trade barriers 贸易壁垒 and legal differences.
- Multinational companies 跨国公司 (MNCs) operate in many countries — powerful, but face criticism over jobs, tax and ethics.
Worked example. A coffee chain enters a new country by franchising to local partners who know the market and culture — lower risk and cost than building its own stores from scratch.
You've got it
- entry methods: exporting, licensing/franchising, joint ventures, direct investment
- opportunities: larger markets, economies of scale, spreading risk
- risks: culture, exchange rates, trade barriers; MNCs are powerful but controversial
Write from a direct investment of 2 million
- A firm spends 2 million building its own factory abroad.
- Name that entry method and one risk that stays.
A firm spends 2 million to build and own a factory in another country. What entry method is that, and what risk does owning the factory not remove?
Owning the foreign factory is direct investment.
What entry method is the 2 million factory?
Difficulty 1/5 · 100 coins + a small bonus on first completion today
The firm owns the foreign operation. Other options — Exporting (because the goods will be sold abroad); Licensing (because another country is involved).