Q1: Why are domestic businesses becoming rarer? Domestic businesses are rarer because companies depend on imports. Even if they sell only in their own country, they often use materials or parts that come from other countries.
Q2: What are five ways a business can be considered an international business?
1. It owns a store in another country.
2. It owns a factory in another country.
3. It exports products to another country.
4. It imports products from another country.
5. It invests money in businesses in another country.
Q3: Pick 3 countries from the chapter and explain the trade history those countries had with Canada. United States The United States buys many Canadian resources such as oil, lumber, and water.
Japan After World War II, Canada began trading more with Japan, especially importing cars and manufactured goods.
China Canada imports many factory-made products from China, such as clothes, electronics, and household items.
Q4: What are the 7 different types of international businesses? Explain each using your own words and give an example.
1. Foreign Portfolio Investment A bank or investor buys shares or bonds in foreign companies without running them. Example: RBC buying shares of companies on the New York Stock Exchange.
2. Importing A business brings goods or services from another country into its own country. Example: Dell bringing parts from India to its factories in the United States.
3. Exporting A business sells goods or services to customers in other countries. Example: Canada selling oil to the United States.
4. Licensing Agreements One company lets another use its brand or idea for a fee called a royalty. Example: Virgin Mobile letting Bell Canada use the Virgin brand in Canada.
5. Franchising A company allows people to open and run their own locations of its business for fees. Example: People owning and running McDonald’s restaurants using the McDonald’s brand.
6. Joint Venture Two companies from different places create a new shared business. Example: Sun Life from Canada working with China Everbright to create Sun Life Financial in China.
7. Foreign Subsidiaries A parent company owns a separate company that operates in another country. Example: Toyota owning Toyota Motor Manufacturing Canada, which builds cars in Canada.