Word Problems Related to International Business Topics


#1 :

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You are at a family birthday party when your older sister, Julie, asks you to help her establish a company that seems to have many complexities. Julie says that she is now a marketing specialist with a hobby in childrens clothing and she is considering starting an international business. Her plan is to export clothing to the U.S. and Canada. The clothing will be made by a contract manufacturer in Viet Nam to her specifications. Julie envisions the operations being headquartered in California, initially with two retail stores – one in Texas and another retail store in Paris, France.

Since she has never been to either of these foreign countries, she asks you to explain what factors to consider including:

  1. What is the best form of organization to use for this multinational type of operation including factors such as formation, stock ownership, board of directors, annual meetings, subsidiaries, etc.?
  2. How will her unfamiliarity with the foreign locations impact the launch of this enterprise?
  3. Do finance and accounting need to be considered from the early stage of her planning; what is the meaning of Financial Statements; and why did her friends tell her to borrow all the money she needs to finance the company?
  4. The meaning and significance of internal control systems; and
  5. Any other factors of relevance.

           Write an essay explaining what you would tell her.


    #2 :

 Julie, from Question #1, is very optimistic about this being a successful venture. She asks you the following question If, for instance, in 5 years I have a successful business with strong sales, profits, and cash flow, what is the general rule on how to determine the value of my business at that time 5 years from now? Give some general rules on how to value an ongoing business, possibly to sell then?

           Write an essay explaining what you would tell her.


       #3 :

Write an essay explaining the significance of GDP measurements in starting, running, and possibly shutting down an international business.

  • What are the shortcomings and solutions to these shortcomings?
  • Why is GDP relevant to students entering the workforce upon graduation and working for an international business; and
  • What was Chinas GDP rate of growth for its most recent quarter?