Understanding International Monetary Systems: Key Concepts
International Monetary Systems: Key Concepts
SMI (System of Monetary Institutions): A set of institutional arrangements focusing on:
- Setting exchange rates.
- Facilitating international trade.
- Facilitating capital movements.
- Allowing balance of payments adjustments when imbalances occur.
Flexible or Floating Exchange Rates
The value of the currency is determined by supply and demand, and the central bank does not intervene. This includes free floats and controlled floats within adjustable bands (floats with
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HHI (Herfindahl-Hirschman Index) – Cautions
Industries with higher C4 tend to have higher HHI. However, there are exceptions:
- For example, the motor vehicle industry may be more concentrated than the snack food industry based on C4, but the snack food industry might show a higher HHI.
- C4 is based on the market shares of only the four largest firms in an industry and does not account for the fifth-largest firm.
- In global markets, C4 and HHI do not account for the entry of foreign firms, which can overstate
International Marketing: Key Concepts and Definitions
Key Concepts in International Marketing
The 4 Phases of International Planning
- Analysis and Screening: Company character, environmental factors.
- Adapting the Marketing Mix: Tailoring to target markets.
- Marketing Plan Development.
- Implementation, Evaluation, and Control.
The 4-Step Error Self-Reference Criterion (SRC)
- Define the business problem in home-country values, habits, or norms.
- Define the business goal in foreign-country cultural habits, norms, and values through consultation with natives. Make
Industry Evolution: Strategies for Success in Different Market Stages
Fragmented Industry
A fragmented industry is composed of a large number of small and medium-sized companies.
Reasons for Fragmentation:
- Low barriers to entry due to lack of economies of scale.
- Low entry barriers allow constant entry of new companies.
- Diseconomies of scale may be present.
Strategies:
- Chaining: Achieve cost leadership. (e.g., Tagliatelle).
- Franchising: Facilitates rapid growth with an established business model.
- Horizontal Merger: Acquire competitors to consolidate market share.
- Information
EU Structural Policies: Objectives, Instruments, and Principles
EU Structural Policies: An Introduction
The European Union (EU) employs structural policies to address regional disparities and promote economic and social cohesion. These policies involve various instruments and operate under specific principles.
Structural Instruments
Several key instruments support the EU’s structural policies:
- European Coal and Steel Community (ECSC, 1951): Addressed structural issues in the coal and steel sectors.
- European Social Fund (ESF) and European Agricultural Guidance and
Network Effects and Standards in Business
Network Effects and Standards
Network effects exist for good A if each user’s utility from A increases with the total number of users of A. There are two types:
- Direct: A user’s utility depends directly on the number of other users, without any other good involved.
- Indirect: A growing number of A-users leads to an increased offer of complements B, which indirectly increases each user’s utility.
Network Utility with N Users
- Cartier: Utility per user decreases with the increase of users; total utility