Explore BrainMass
Share

Business unhindered by borders or boundaries

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Describe the following components of international Trade, Licensing agreement, Foreign direct investment, and managing risk

Licensing agreement:

International trade is very important for any country in the world for economic development expansion of the local as well as global trade. Since one country is exporting or importing from other countries entering into business agreements with unknown buyers or sellers they must be fortified with strong legal protection under license of the respective countries. The licensing agreements fill this void and give protection to exporters/importers.

The American businesses employ several methods to enter this kind of business. They either
1) Export directly to the foreign buyers, after
2) Entering into licensed agreements,
3) Establishing either a partnership or joint venture company with those buyers or setting up a wholly owned subsidiary.

Risks involved:

There are two" risk" oriented bottlenecks that at the expiration of the agreement the licensee himself may become a competitor of the licensor notwithstanding any non-compete clause has been included in the original agreement.

Secondly, forming a partnership firm with a new or existing one or a wholly owned private limited company will require hefty investment. A venture in another country is always exposed to the risks of a partnership with an existing or newly formed company, or establishing a wholly owned subsidiary, requiring a substantial investment and
(Risks) - is ever exposed to the risk of expropriation, nationalization or confiscation.

A licensing agreement is always required irrespective of the mode of selling abroad, save in case of direct export.

Rise and decline in the values of currencies of countries involved in trade badly affect the traders. It creates trade imbalances which have to be settled by the respective governments of both countries. Movement of foreign exchange rate greatly affects the production of goods in the exporting country and price level in the importing country.

There always chances of damages to goods in transit. The risk of non-payment or delayed payment directly affects the businesses involved. Many a time governments of either country interfere in the free trade due to economic or political compulsions of safety concerns. Then there are taxation systems â?" incidence of double taxation etc.

In an extreme case, where a foreign government is overthrown and the new regime does not respect any existing treaties, losses can be severe. This risk must be fully taken into account before any decision is taken to establish a presence in a foreign country. Nothing can take the place of acquiring all relevant information and advice before deciding to do business in a particular country.

© BrainMass Inc. brainmass.com October 25, 2018, 5:35 am ad1c9bdddf
https://brainmass.com/business/foreign-direct-investment/business-unhindered-by-borders-or-boundaries-425788

Solution Preview

Let us start by first defining international trade .In simple terms international trade can be defined as trade or business between two nations .International business is business that is not limited by national borders and boundaries.

The difference between domestic and international trade that latter is most costly due to tariffs, time costs, transportation, legal and cultural systems.

Another hindrance is the mobility of labor and capital which are freer within a country rather than internationally. Due to which it is mostly restricted to trade in goods and services and to some extent in other factors of production

The components of international trade Licensing agreement, foreign direct investment, and managing risk can be explained as follows:

Licensing agreement:

International trade is very important for any country in the world for economic development expansion of the local as well as global trade. Since one country is exporting or importing from other countries entering into business agreements with unknown buyers or sellers they must be fortified with strong legal protection under ...

$2.19
See Also This Related BrainMass Solution

Identify and describe the historical event.
Analyze the historical and contemporary causes of the event.
Analyze different historical interpretations of this event.
Evaluate the positive and negative outcomes of this event.

I am writing on Adolf Hitler. I want to find out who he was, where he was from, what he was associated with, the time period in which he was popular and for what reason. I would like to know the philosophy of Nazism, one closely associated with Hitler. I want to outline the main purpose of Hitler and what he strove to attain. He attempted to establish a New Order of a complete Nazi German hegemony. I would like to know ways in which he tried to do this as well as his failure and success, in essence; his political career. I nedd to understand some of the key concepts Hitler was famous for promoting (for instance pan-Germanism, anti-semitism, anti-capitalism, and anti-communism).

Who he was, where he was from, what he was associated with, the time period in which he was popular and for what reason

Adolf Hitler was born in Braunau, Austria on April 20, 1889. He was the fourth child of Alois Shichickelgruber and Klara Hitler. His father had been married twice before. Three of Adolf's siblings died as children. His siblings who survived were a brother Edmond and a sister Paula. By the time he was 10 the family had moved at least three times. During one six month period of time the family lived across from a Benedictine monastery. The most notable figure on the monastery's coat of arms was a swastika which would later figure prominently in Nazi rituals. It was during this time that Hitler began thinking about possibly joining the priesthood.

By the time he was eleven years old, Hitler's ability as an artist began to surface. He attended a school that offered drawing but did not do well as a student. This was the first of a series of occasions in which Hitler's dreams soared high above his potential and his personal motivation to realize those dreams. His father died in 1903 and in 1906 at the age of 16 Hitler left the family home for Vienna. He had quit school supposedly because of poor health but his personal motivation to stay in school was pretty much nonexistent.

Hitler spent 6 years in Vienna. In a superficial sense his time in Vienna was a complete failure. Though he painted numerous watercolor paintings he was unable to sell many of them and he was rejected several times from admission to the art school he had hoped to attend. He ran out of money three years into his time in Vienna, in 1909 and spent the following three years living in flophouses and hostels. He essentially survived because of the goodwill of others who cared for the indigent. Ironically, many of these organizations were funded by Jewish philanthropists. His time in Vienna was notable because during this time he came was helped by Jewish people and yet it was here also that his fierce anti-Semitism began to germinate. Two of his close friends were Jews and he apparently admired Jewish actors, performers and art dealers. However, the Vienna media was extremely anti-Semitic and it seems that much of Hitler's intense hatred for the Jews can be attributed to his early indoctrination at the hands of the Vienna media.

In 1913, Hitler left Vienna for Munich in an effort to escape the draft. He was caught by the police and taken back to Vienna. However, his medical exam determined that he was unfit for military service claiming he was too weak to be suitable to the army. Though Hitler seemed destined never to serve in the military, this changed when World War I ignited across Europe. He enlisted in the Bavarian army and less than two months later he was involved in intense fighting in Ypres, France. He proved his bravery in battle on numerous occasions and was awarded the Iron Cross twice. Ironically, one Iron Cross was presented to him by a Jewish officer. He was wounded by artillery fire in 1916 and spent several months recuperating in the hospital. He then returned to active service and served until 1918 when he was temporarily blinded by a mustard gas attack in Belgium.

View Full Posting Details