Terms-Definitions

Globalization
-amount a trade between nation increases
-location of factories where raw materials/skills are cheapest
-economies and businesses becoming increasingly independentEconomies of Scale
-most efficient to produce masses of a product-big companies can buy for less and sell to more

Footprint
-area covered by the countries a company works in
-working in more countries: protection from economic instability
-factors of developing in a country: Legislation, Technology, Education, Investment, Advertising

Multinational Corporation (International Corporation)
-manufacturing sales/service subsidiaries in at least one foreign country
-worldwide influence over businesses/government-create employment/wealth, improve technology
-inordinate political influence, exploitation of developing nationsConglomerate
-very rapid capital growth throw horizontal integration
-protection against overspecialization, availability of management expertise, reduced costs

Merger
-at least 2 businesses become 1
-vertical merger: supplier-customer relationship, different types
-horizontal merger: related
-extensional merger: similar businesses in new market
-hostile takeover: involuntary takeover

Competition
- rivalry in supplying or acquiring an economic service or good
- natural outgrowth of the operation of supply and demand within a free market economy
- supply-and-demand pricing most efficient without control

Monopoly
- large business interest with the ability to control industry prices
-one seller that sets market prices
- exist in “natural monopoly,” the conditions of market make control necessary to the public interest

Cartel:
-firms agreeing on market factors (price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, division/combination of profits)
-forbid by competition law
-increase individual profit, decrease competition