[TEA-JAN-26] BBB4M I ...

Q1: Why are domestic businesses becoming rarer?

Countries rely a lot on imports from other countries. So even if a company sells to customers in its home country, it probably uses raw materials that were imported from another country.

 

Q2: What are five ways a business can be considered an international business?

1.      Own a store in another country

2.      Own a factory in another country

3.      Export to another country

4.      Import from another country

5.      Invest in a business in another country

 

Q3: Pick 3 countries from the chapter and explain the trade history those countries had with Canada.

USA

·        They import raw materials like oil, lumber, and water from Canada

 

Japan

·        Started after WWII

·        Canada imports cars from them

 

China

·        Canada imports lots of factory-made items from china

 

 

Q4: What are the 7 different types of international businesses? Explain each using your own words and give an example.

 

1: Foreign Portfolio Investment

·        This is when a company (usually a bank or investment firm) invests in businesses from other countries.

·        Example: RBC investing in companies listed on the New York Stock Exchange

 

2: Importing

·        This is when companies bring products from other countries into their country.

·        Example 1: Dell imports materials from India to their factories in the US to then make computers.

·        Example 2: Companies in North America outsource their call centers to other countries like India because the cost of labor is lower there.

 

3: Exporting

·        When companies sell products to other countries.

·        Example: Canada exports oil to the US.

 

4: Licensing Agreements

·        When a company gives another company permission to use their brand name in exchange for a royalty fee.

·        Example: Virgin Mobile is a British company that licenses its brand to Bell Canada. Bell pays Virgin Mobile money to use its brand name.

 

5: Franchising

·        When a company sells their stores to people to run and operate in exchange for a monthly royalty fee.

·        Example: McDonald’s will build McDonald’s stores and then sell the store to people to operate. McDonald’s will provide training, equipment, materials, etc., and the owner has to find employees and operate the store. Each month, the owner pays money to McDonald’s for their support.

 

6: Joint Venture

·        This is when a foreign business teams up with a domestic business to enter the domestic business’s country.

·        Example: Sun Life (a Canadian insurance company) teamed up with China Everbright Group (government organization) to create Sun Life Financial in China. Sun Life is in charge of day-to-day operations, while Everbright takes care of distribution to customers.

 

7: Foreign Subsidiaries

·        When a large parent company allows a branch of its company to operate independently in a foreign country.

·        Example: Toyota is a Japanese company, but it has a subsidiary in Canada called Toyota Motor Manufacturing Canada (TMMC). As long as TMMC meets the goals set by the Toyota, Toyota will leave TMMC alone.

rn, and newsprint to Morocco.