FITT CITP flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Comparative advantage

A country benefits from trade by specializing in goods for which its opportunity cost of production is lower than a trading partner's, even when it is absolutely less efficient at everything.

Trade diversion

A welfare loss from a regional trade agreement in which imports shift from a lower-cost non-member country to a higher-cost member country that enjoys preferential tariff treatment.

Most-favoured-nation treatment

A WTO principle requiring a member to extend any tariff advantage granted to one trading partner to all other WTO members, subject to defined exceptions such as free trade areas.

Balance of payments

A statistical record of all economic transactions between residents of a country and the rest of the world, comprising the current, capital, and financial accounts.

Market screening funnel

A staged filtering process that narrows candidate countries from broad macro criteria to industry demand, then to firm-specific fit, producing a shortlist of target markets.

Joint venture

An entry mode in which a firm shares ownership and control of a local entity with a partner, often required by local ownership rules, and governed by a detailed JV agreement.

Licensing

An entry mode in which the owner grants a foreign firm rights to use intellectual property, technology, or a brand in exchange for royalties, with limited capital outlay.

Market attractiveness scoring

A weighted multi-criteria technique that ranks candidate markets on size, growth, competition, tariffs, regulation, and cultural distance, then sensitivity-tests the resulting ranking.

Standardization versus adaptation

The marketing decision to keep the same product, price, promotion, and place across markets, or to modify them for local regulation, culture, language, and income level.

Country-of-origin effect

The influence of a product's national origin on buyer perceptions of quality and value, which can create a price premium or a competitive penalty in foreign markets.

Grey market

Unauthorized distribution of genuine branded goods across markets, typically arising when price differences between countries exceed the cost of arbitrage and resale.

Total landed cost

The full cost of delivered goods, including ex-works price, freight, insurance, duties, taxes, handling, and inventory carrying cost incurred to reach the buyer.

Incoterms 2020

ICC standard trade terms defining which party arranges and pays for transport, insurance, and customs, and where risk transfers from seller to buyer.

Chargeable weight

The air-freight billing weight, calculated as the greater of actual gross weight in kilograms and volume in cubic metres multiplied by 167.

Safety stock formula

Buffer inventory equal to the service-level z factor multiplied by demand standard deviation and the square root of lead time, protecting against variability.

Harmonized System code

A six-digit internationally standardized product classification, extended nationally to eight or ten digits, that determines duty rates, origin rules, and licensing.

Transaction value

The primary customs valuation basis, being the price actually paid or payable for the goods, adjusted for assists, royalties, and certain commissions.

Rules of origin

Criteria determining a product's economic nationality, based on wholly obtained status or substantial transformation through tariff shift, value-added, or specified process.

Anti-dumping duty

A trade remedy imposed after investigation when imports are sold below normal value in the exporting market and cause or threaten material injury to domestic industry.

Letter of credit

A bank undertaking, governed by UCP 600, to pay a beneficiary against presentation of compliant documents, substituting bank credit for the buyer's commercial credit.

Documentary collection

A bank-handled payment method in which documents are released against payment or against acceptance of a draft, without the bank guaranteeing payment.

Forfaiting

The discounting of medium-term export receivables, usually guaranteed by a bank, on a without-recourse basis, transferring buyer default risk to the forfaiter.

Transaction exposure

The foreign exchange risk arising from specific committed receivables or payables denominated in a foreign currency, hedged with forwards, futures, or options.

CISG

The UN Convention on Contracts for the International Sale of Goods, which governs formation and remedies for international sales unless the parties exclude it.

New York Convention

A multilateral treaty requiring member states to recognize and enforce foreign arbitral awards, making arbitration preferable to litigation for cross-border disputes.

Force majeure clause

A contractual provision excusing performance when an unforeseeable event beyond a party's control prevents it, typically requiring notice and mitigation.

FCPA and UK Bribery Act

Anti-corruption statutes with extraterritorial reach; the FCPA permits limited facilitation payments while the UK Bribery Act prohibits them entirely.

High-context culture

A communication style in which meaning is carried by relationships, situation, and non-verbal cues rather than explicit written statements, common in Asia and the Arab world.

Hofstede dimensions

A framework comparing national cultures on power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and indulgence, used to anticipate management and negotiation differences.

Monochronic culture

A cultural orientation treating time as linear and scarce, valuing punctuality, schedules, and sequential task completion over relationship-building flexibility.

Country risk

The risk that political events, currency inconvertibility, or sovereign default in a foreign market will prevent or delay payment or disrupt operations.

Ansoff matrix

A strategic grid of market penetration, product development, market development, and diversification, used to classify growth options by product and market novelty.