Giai sbt tacn3

Tiếng Anh Chuyên Ngành 3 - Kinh Doanh Quốc Tế. Chhap chapter 8 multinational corporation english for specific purposes.

Tiếng Anh Chuyên ngành 3 (Trường Đại học Ngoại thương)

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Tiếng Anh Chuyên ngành 3 (Trường Đại học Ngoại thương)

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FOREIGN TRADE UNIVERSITY

its exports and imports of goods

5 D balance of payments is the difference between what a country’s total earnings

form exports and its total expenditure on imports

6 A autarky is the situation in which a country is completely self-sufficient and has

no foreign trade

7 F surplus is a positive balance of trade or payments8 B deficit is a negative balance of trade or payments9 E dumping is selling goods abroad at or below cost price

10 M protectionism is imposing trade barriers in order to restrict imports11 I tariffs is taxes charged on imports

12 C quotas is quantitative on the import of particular products or commodities.

READING 1:

1 Why do most economists oppose protectionism?

Because they believe in the comparative cost principle, which proposes that allnations will raise their living standards and real income if they specialize in theirhighest relative productive goods.

2 Why do most governments impose import tariffs and/or quotas?Because they want to do these thing:

- Protect their strategic industries;

- Make imports more expensive than home-produced substitutes;- Protect against dumping;

- Retaliate against restrictions imposed by other countries;- Protect their “infant industries”

- Know the quantity that will be imported

3 Why were many developing countries for a long time opposed to GATT?Because they wanted to industrialize in order to counteract the inevitable fall incommodity prices.

4 Why have many developing countries recently reduced protectionism andincreased their international trade?

Because they have huge debts to pay and are unable to pay the interest, let alone repay

the pricipal So when they want to renew or postpone the loans, they have been forcedto increase their international trade and reduce their protectionism.

READING COMPREHENSION TASKS 1:

1 What makes a country have a comparative advantage in producting goods andservices?

2 Why the comparative advantage theory is opposed by governments?3 Which kinds of countries often impose tariffs and quotas?

4 What is the benefit of tariffs over quotas?5 What is the benefit of quotas over tariffs?

READING COMPREHENSION TASKS 2:

1 Structure of production and export of LDCs is primary commodities likefoodstuffs, fuels and industrial raw materials While the import structures isdominated by the manufactured goods and intermediate inputs such as consumergoods, machinery, transport equipments, chemicals.

And the MDCs’ structures is in reverse that imports raw materials and primaryproducts, exports manufactured goods (as China, India)  earn more than LDCs.2 Three examples of the current reliance of LDCs on primary products for export arefoodstuffs, fuels and industrial raw materials, for examples coffee from Burundi(90%), copper from Zambia (70%) and cocoa from Ghana (70%).

3 The arguement comes from Orthodox economists, they suggested that trade wasactually carried out at the expense of the LDCs, producing the condition of underdevelopment and poverty.

4 The ratio between the unit prices of exports and imports is called the net barter

terms of trade (Tỷ giá trao đổi ròng) Chỉ số giảm means xuất khẩu > nhập khẩu (the

deterioration in this index implies that a given volume of exports is exchanged for asmaller volume of imports)

1 I Nations

2 E Commodities3 B Balance of trade4 A Balance of payments5 C Barter or counter-trade

6 K Protectionism

7 H Factors of production8 D Climate

9 F Divison of labour10 G Economies of scale11 M Tariffs

12 L Quotas

1 Barriers because others are theories of international trade2 Autarky because others are kinds of trade

3 Dumping because others are kinds of balance

4 Merchandise because others are kinds of invisible trade

5 Comparative advantage because others are ways to oppose free trade6.Taxes Norms because others are trade barriers

7.Barter Tariffs barriers because others are things that relatives to developing

8.Debt Subsidize because others are relatives to developing countries

9.Liberalize Substitute because others are ways for governments to protect their

Free Trade Vs Protectionism

As with other theories, there are opposing views International trade has twocontrasting views regarding the level of control placed on trade: freetrade and protectionism Free trade is the simpler of the two theories: a laissez-faire approach, with no restrictions on trade The main idea is that supply and demandfactors, operating on a global scale, will ensure that production happens efficiently.Therefore, nothing needs to be done to protect or promote trade and growth, becausemarket forces will do so automatically.

In contrast, protectionism holds that regulation of international trade is important toensure that markets function properly Advocates of this theory believe that marketinefficiencies may hamper the benefits of international trade and they aim to guide the

market accordingly Protectionism exists in many different forms, but the mostcommon are tariffs, subsidies and quotas These strategies attempt to correct anyinefficiency in the international market.

UNIT 2: FOREIGN DIRECT INVESTMENT

1 Foreign Portfolio Investment is the purchase of shares and long-term debtobligations form a foreign country It differs from FDI about controlling rights andownership of corporation, also FDI tranfers technology while FPI is only money.2 The categories are: raw materials, markets, product efficiency, “know-how”…3 Examples of investment incentives: cash grants, tax credits, accelerateddepreciation, low-interest loans … They are supposed to attract investment.

4 No-exclusive distributor is called multiple distributor, which means a sales agentwho represents for more than one manufacturer.

5 Royalty payments is the payment made by a foreign manufacturer to a companythat has licensed the manufacturer to produce its products.

6 Joint venture is a subsidiary formed by two or more corporations.

Reading comprehension tasks

1 Foreign direct investors normally seek to raw materials, markets, productefficiency, and “know-how”.

2 An MNC’s first strategic objective is to locate or create markets for its present andfuture products.

3 Some financial considerations in making a FDI are interest rates, cash flowprojection, rate of return …

4 The project is viable when reliable access to outside financing is available viable project is the one where expected rate of return is likely to be lower than from acomparable investment in the host country.

Non-5 The two kinds of legislation are antitrust legislation and labor laws.6 Because they suffered from long periods of unemployment.

7 A corporation will organize its sale by engaging distributors, who receive acommission on products sold.

8 A drawback of licensing, as well as of authorizing foreign distribution is that theoriginal manufacturer gives up control over the product If the licensed product lacksquality, the exporter’s reputation suffers.

9 The ownership possibility remains is joint venture.

Exercises 1:

1 Foreign direct investment, Foreign portfolio investment2 Cash flow

3 Non-viable project

4 Investment incentive; support foreign investment.5 distributor; authorized; royalty payments

Exercises 2: There will be two questions: how risky it is to make a FDI and how

much potential revenue it may have?

Advantages and disadvantages of FDI Inflows

Advantages of FDI Inflows

Investment of a foreign company in the American market can provide newtechnologies, capital, products, organizational technologies, management skills andpotential cooperation and business opportunities for local businesses For example,Volkswagen, a European automotive manufacturing company, is building a plant inTennessee Its investment needs local small businesses as suppliers from theconstruction sector during building, from suppliers of equipment and accessories inthe automotive industry and from other businesses, such as cleaning services andplumbers.

Disadvantages of FDI Inflows

Investment of a foreign company with its new technologies and products has severaldisadvantages for local businesses New products arriving at lower prices createcompetition and force local businesses to lower their prices and reorganize theiroperations in terms of costs Local businesses may lose their customers or even theirbusiness relations with other companies as they start cooperating with the new foreignone

UNIT 3: FOREIGN EXCHANGE TRADING

4 Under a floating exchange rate system, supply and demand are the things that

normally determine the value of currencies.

5 An exchange rate system fixed is achieved by buying the currency when it reachesits low point and by selling when it reaches its high point.

6 Spot transaction means currency bought or sold today with delivery two business days later.

7 On the forward transaction, the payment is made at the present but the delivery of funds is made in the future date.

8 Hedging means to offset a “buy” contract with a “sell” contract and vice versa, matching the amounts and the time span exactly.

9 Premium means the additional amount it will cost to buy or sell a currency at a given future date It is determined by relative price of spot transaction and the opposite of premium is discount.

10 The transfer of funds from one currency to another is involved in arbitraging And at least two markets are entered while doing so.

READING COMPREHENSION TASK

1 Gold standard is the payment mechanism used in earlier times, it was laterreplaced by Breton Wood Systems.

2 The importance of gold standard is that this is the system help determining thevalue of all currencies based on gold, therefore it could make the values of differentcurrencies could be compared in terms of one another.

3 United states dollar is the only currency remain convertible into gold until 1971.4 The system of fixed exchange rates is when central banks intervene in the foreignexchange markets in order to keep a currency never rise above nor fall below aintervention points The Breton Wood conference agreed upon this system.

5 Devaluation means lowering the value of a currency in terms of gold England,France and US are the countries that devalued their currencies between 1967 and1973.

6 West Germany and Holland are the two countries that revalued their currencies inthe early 1970.

7 Intervention points are not applicable in a floating exchange rates system sincecentral banks are no longer required to support their own currencies.

8 Snake is a system where a country still preserves its fixed – rate system but allowa widening of the intervention points to within 2.25 percent of the par value of thecurrencies It is called snake because these currencies move up and down togetheragainst currencies outside the snake The members of the Common Market which areoutside the snake are The British and the Italians.

9 The foreign exchange market is the mechanism through which foreign currenciesare traded It is not an actual marketplace but a system of telephone of telexcommunicaions between banks, customers, and middlemen.

10 The function of a foreign exchange broker is to act for a client) vis-愃11 Five active participants in foreign exchange market are tourists, investors,exporters, importers, governments.

12 Spot transaction in a transaction when currency is bought or sold today withdelivery two business days later for example: a French father transfer money to hisson in New York Forwarding transaction means buying or selling a currency in thefuture with payment and delivery at that future date An example for forwardtransaction: Japanese exporters on Toyota cars to the US from the sales contracts thatthey will receive a specified US dollar amount in 6 months.

13 The delivery of the foreign exchange takes place two days later in a spottransaction because this permits sufficient time to consummate the transaction.

14 Payment and delivery of foreign exchange take place at a fixed future date in aforward transaction However, the rate of exchange is fixed on the date of thecontract

15 An open position is caused by an offsetting contract.

16 Long is an open positon when a dealer buy currency forward without selling itforward at the same time Short is an open position when a dealer sell currencyforward without buying forward at the same time

17 A bid is the price dealers will pay to accquire one kind of currency while an offeris the price they will sell that currency for

18 Arbitrage is the practice of tranferring funds from one currency to another tobenefit from rate diffentials This is usually a very profitable transaction for a bank

19 If interest rates in England are 2 percent higher than in the United States moneymarket, a United States investor would do well to change United States dollars intopounds sterling and then invest the sterling at the English interest rate However, theexchange rate discount of sterling is 1 percent The investor will have to buy backdollars at a 1 percent premium, thus losing 1 percent Still, the investor makes anoverall gain of 1 percent Interest arbitrage is not possible when there is the presenceof foreign exchange regulations, such as capital transfer limitations.

Exercises 1:1 Goods2 Gold

3 Fixed ; Floating4 Speculate5 ArbitrageExercises 2:1 19732 19923 19444 20025 1971

BLACK WEDNESDAY

In Britain, Black Wednesday (September 16, 1992) is known as the day thatspeculators broke the pound They didn't actually break it, but they forced the Britishgovernment to pull it from the European Exchange Rate Mechanism (ERM) Joiningthe ERM was part of Britain's effort to help along the unification of the Europeaneconomies However, in the imperialistic style of old, she had tried to stack the deck.Although it stood apart from European currencies, the British pound had shadowedthe German mark in the period leading up to the 1990s Unfortunately, the desire to"keep up with the Joneses" left Britain with low interest rates and high inflation.Britain entered the ERM with the express desire to keep its currency above 2.7 marksto the pound This was fundamentally unsound because Britain's inflation rate wasmany times that of Germany's Compounding the underlying problems inherent in the

pound's inclusion into the ERM was the economic strain of reunification thatGermany found itself under, which put pressure on the mark as the core currency forthe ERM

The drive for European unification also hit bumps during the passage of theMaastricht Treaty, which was meant to bring about the euro Speculators began to eyethe ERM and wondered how long fixed exchange rates could fight natural marketforces Spotting the writing on the wall, Britain upped its interest rates to the teens toattract people to the pound, but speculators, George Soros among them, beganheavy shorting of the currency.

The British government gave in and withdrew from the ERM as it became clear that itwas losing billions trying to buoy its currency artificially Although it was a bitter pillto swallow, the pound came back stronger because the excess interest and highinflation were forced out of the British economy following the beating Sorospocketed $1 billion on the deal and cemented his reputation as the premier currencyspeculator in the world.

UNIT 4: PAYMENT IN INTERNATIONAL TRADE

1 Invoice b – list of goods sold as a request for payment;

2 Clean collection f – payment by bill of exchange to which documents are not

3 Documentary collection j – payment by bill of exchange to which commercial

documents and sometimes a document of title are attached;

4 Bill of exchange g – a signed document that orders a person or organization to pay

a fixed sum of money on demand or on a specified date;

5 Bill of lading a – document that shows the details of goods being transported; it

entitles the receiver to collect the goods on arrival;

6 Document of title e – document allowing someone to claim ownership of goods7 Issuing bank c – bank that issues a letter of credit, the importer’s bank;

8 Collecting bank d – bank that receives payments of bills, for their customer’s

account, the exporter’s bank;

9 Confirming bank h – bank that confirms they will pay the exporter on evidence

of shipment of goods;

10 Letter of credit i – method of financing overseas trade where payment is made by

a bank in return for delivery of commercial documents, provided that the terms and conditions of the contract are met.

1 True The importer pays for the goods after receiving the documents

2 False There is sales contract involved

3 True The exporter must be able to trust the buyer.

4 False If a letter of credit is issued, the importer’s bank agrees to pay for the

goods when all conditions required are met.

5 True If a letter of credit is confirmed, the exporter’s bank takes responsibility forpayment.

6 False Commercial documents and the document of title are not always enclosed

with a bill of exchange.

7 True Importers may not accept the bill of exchange until the goods arrive.

8 True Exporters can keep control of goods by sending bills of lading through thebanking system.

9 False Exporters reduce risk if documents are released against payment of the billrather than acceptance.

10 True This means that the importer has to pay before any goods are dispatched

Word search

1 Undertaking2 Consignment3 Intermediary4 Maturity

READING 2

1 The applicant completes a contract with the seller.

2 The buyer fills in a letter of credit application form and sends it to his or her bankfor approval.

3 The issuing bank approves the application and sends the L/C details to the seller’sbank.

4 The advising bank authenticates the L/C and sends the beneficiary the details Theseller examines the details of the L/C to make sure that he or she can meet all theconditions If necessary, he or she contracts the buyer and asks for amendments tobe made.

5 When the beneficiary is satisfied with the conditions of the L/C, he or she shipsthe goods.

6 The seller presents the documents to his or her bankers The advising bankexamines these documents against the details of the L/C and the InternationalChamber of Commerce rules.

7 If the documents are in order, the advising bank sends them to the issuing bank forpayment or acceptance If the details are not correct, the advising bank tells theseller and waits for corrected documents or further instructions.

8 The issuing bank examines the document from the advising bank If they are inorder, the bank releases the documents to the buyer, pays the money promised oragrees to pay it in the future, and advises the buyer about the payment The buyercollects the goods.

9 The issuing bank advises the advising/confirming bank that the payment has beenmade.

10 The advising/confirming bank pays the seller and notifies him or her that thepayment has been made.

Ex1: Information search

1 Open account c – importers may not pay at all.

2 Documentary credit a, d, g – exporters must comply with the conditions of the

credit documents; it takes a long time to process payment in some countries; exportersmust take care to present the correct documents.

3 Bills for collection e,f – importers may not accept the bill of exchange; bank

charges may be high.

4 Advance payment b – importers may delay payment.

Ex2: Complete the sentences

1 Draw2 Forwards3 Dispatches4 Present

5 Accepts ; release6 Dishonours7 Remit

Further discussion

1 The risk for the importer are non-delivery, late delivery, failure to receive goods,faulty goods … Open account will be secure method for the importer because theycan pay after receiving goods in good quality and no faults.

2 Mentioned in the reading part 2 exercise3 Be honest, be punctual

1 Revolving L/C2 Back-to-back L/C3 Revolving L/C4 Transferable L/C5 Confirmed L/C6 Revocable L/C

- The name and address of the exporter

- The type of credit (revocable or irrevocable)- The expiry date

- The name and address of the importer

- The name of the party on whom the bills of exchange are to be drawn, andwhether they are to be at sight or a particular tenor

- Precise instructions as to the documents against which payment is to be made- A brief description of the goods covered by the credit

- The terms of contract and shipment (i.e, whether ‘EXW’, ‘FOB’, ‘CIF’, etc.)- The amount of the credit, in sterling or a foreign currency

- Shipping details, including whether partshipments and/or transshipments areallowed.

- Also recorded should be the latest date for shipment and the names of the portsof shipment and discharge (It may be in the best interest of the exporter forshipment to be allowed ‘from any UK port’ so that a choice is available if, forexample, some ports are affected by strikes The same applies for the port ofdischarge

UNIT 5: MARKETING

1 Distribution channel a – all the companies or individuals involved in moving a

particular good or service from the producer to the consumer.

2 To launch a product i – to introduce a new product onto the market.

3 Market opportunities f – possibilities of filling unsatisfied needs in sectors in

which a company can profitably produce goods or services.

4 Market research h – collecting, analysing and reporting date relevant to a specific

market situation.

5 Market segmentation d – diving a market into instinct group of buyers who have

different requirements or buying habit.

6 Packaging j – wrappers and containers in which product are sold.

7 Point of sale e – places where goods are sold to the public – shops, stores,

kioshks, market, stalls, etc.

8 Product concept b – an idea for a new product, which is tested with traget

consumers before the actual product is developed.

9 Product feature c – attributes or characteristics of a product: quality, price,

reliability, etc.

10 Sale representative g – someone who contacts existing and potential customers

and tries to persuade them to buy goods or services.

1 The third is the most accurately summarizes the text.

2 The D diagrams is the best illustrator to a marketing concept adopted by a company.

EXERCISESEx1: 4P’s

Product: Optional features, after – sale service, line – filling, packaging sizes,characteristics, quality, guarantee, style, brand name

Price: Inventory, credit terms, market penetrations, going – rate, list price, market skimming, paymend period, prestige pricing, cash discount, production costs, quantity discounts

Promotion: Advertising, commercials, franchising, public realations, free sample, poster, publicity, sponorship, mailing, media plan, personal selling

Place: Point of sales, transportation, rending machines, ware housing distribuition channels, whole saling

1 F Conversional marketing is the difficult task of reversing negative demand, eg

for dental work, or hiring disabled people.

2 H Stimulational marketing is necessary where there’s no demand, which often

happens with new products and services

3 A Developmental marketing involves developing a product or service for which

there is clearly a talent demand, eg a non-polluting and fuel-efficient car.

4 C Remarketing involves revitalizing falling demand, eg for churches, inner city

areas, or ageing film stars.

5 E Synchromarketing involves altering the times pattern of irregular demand, eg

for public transport between rush hours, or for ski resorts in the summer.

6 G Maintenance marketing is a matter of retaining a current level of demand, in the

face of competition or changing tastes.

7 D Demarketing is the attempt to reduce overfull demand, permanently or

temporarily, eg for some roads and bridges during rush hours

8 B Countermarketing is the attempt to destroy unwholesome demand for products

that are considered undesirable, eg cigarettes, drugs, handguns, or extremist political parties.

Ex3: Match up

i: 5j: 2k:4l:1m: 8n: 6o: 3p:7

1 Making a loss2 Early adopters3 Similar offerings4 Advertising budgets5 Differentate products6 Reaches saturation7 Consumer tastes

8 Withdrawn from the market

1 Boston Matrix is useful for a company to analysis how succesful a range of its products or services are by looking at the percentage of sales it has in the market shareand how fast the sales are growing

2 Star products are products that have both eargest market share and highest market growht Some potential products to name are Smartphones, laptops…