GEO 793 Study Guide - Quiz Guide: Yogurt, Comparative Advantage, Gross Domestic Product
27 Oct 2017
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In order to fully understand how international trade (exporting/importing) operates within the global marketplace we first need to define the 5 levels of international business transactions. Companies traditionally (but not always) move through levels 1 to 5 as their management decides to take on more business risk. Management will only move to the next level when they become profitable at one level and are able to identify the business risks at the next. So when studying these definitions be aware that the higher the level of international business transaction the higher the business risk the organization is absorbing. This is the market within which the company"s headquarters is located and one that it continues to serve with its products and/or services. For example, magna"s domestic market is canada since its headquarters is located in aurora, ontario. Bmw"s domestic market is germany since its headquarters is located in munich, germany.
