1. Free trade is good for some but bad for other?

- Free trade means eleminating all restrictions in trading between 2

countries. Some of those restrictions are tariffs or quotas.
a. Pros
- A good thing for both economies because of comparative advantage
and specialization
- Eg. Country A and B
- Free trade and economic globalization provide free and open
transaction of good and services between 2 countries
In the end, both producers and buyers are the winners.
+ The buyers get cheaper products
+ The producers access to bigger market and produce more =>
higher profit
- If we impose too strict trading regulations, there might have some
problems with illegal activities such as smuggling.
b. Cons:
- It promotes homogenization in the world:
+ Things are starting to become the same all over the world
+ Loosing of culture diversity.
- Some countries dont play fair
+ eg. China and Indonesia => damage the economies of the
countries they are trading with
- The developed countries enjoy higher benefits then the developing
ones
2. Why do businesses insure their goods against risk?
Even if you you have a successful business, disaster could strike at
any moment and force you to shut the door.
Reasons:
- Reduce exposure to financial loss: if the good are lost or damaged
during transit
- Coverage for limited carrier liability
+ The carrier, by law are not responsible for many common causes
of loss during transit ( eg: Act of God, GA
+ Even if they are liable, carriers liability is limited
- Contractual requirement: eg: CIP, CIF
3. While a country as a whole will gain from trading with other nations,
this doesnt mean that all section of the community within the country
will benefit. Discuss
- Some important benefits of International Trade
+ Enhances the domestic competitiveness
+ Takes advantage of international trade technology
+ Increase sales and profits

+ Extend sales potential of the existing products

+ Maintain cost competitiveness in your domestic market
+ Enhance potential for expansion of your business
+ Gains a global market share
+ Reduce dependence on existing markets
+ Stabilize seasonal market fluctuations

Higher employment rate but with low salary

Impact on culture
Impact on environment

Buyer Country risks

-

Changes in the policies of the government

Exchange control regulations
Lack of foreign currency
Trade embargoes

4. What are the advantages and disadvantages of letter of credit?

- Advantages:
+ The beneficiary is assured of payment as long as it complies with the
terms and conditions of the LC
+ The credit risk transfers from the applicant to the issuing bank
+ The beneficiary minimizes time collection as the Lc accelerates
payment of the receivables
+ The beneficarys foreign exchange risk is eleminated with a LC
issued in the currency of beneficiarys country.
- Disadvantages:
+ Since the parties involved in LC deal with the documents, not with
the goods, the risk of beneficiary not shipping goods as mentioned
in the LC still persists
+ Costier than other method of payment such as Open Account and
Collection
+ Beneficarys documents must comly with the terms and
conditions of the LC for the issuing bank to make payment.
5. Do you think that worth of mouth is the best method of advertising?
Worth of mouth advantising is considered one of the most effective
forms of marketing and many companies have adopted strategies that

focus on giving people reasons too talk about their positive

experiences with their products or services.
- Effective recommendations
+ Hearing the messages, information from friends, family member
or co-worker usually carry more weight than a paid message from a
biased advertiser.
- In expensive marketing:
+ WOM is a cost-effective method of spreading information about
goods and services.
+ Require no out of pocket expenditure.
+ Merely providing a quality product or service and doing so in a
customer friendly way => customer will help them
- Strong brand Image:
There are a lot of competitors => lead companies to focus greater
efforts on building customer loyalty => enhance companys brand
name
6. What are the advantages and disadvantages of open account method
of payment?
Open account is only used for transactions between exporters and
importers which have already established a trust-worthy and long term
business relation.
- Risks:
+ Exporters faces significant risk as the buyers could default on
payment obligation after shipment of the goods.
- Advantages:
+ Boost competitiveness in the global market
+ establish and maintain a successful trade relationship.
- Cons:
+ Risk of nonpayment
+ additional costs associated with the risk mitigation measures
7. Why do business prefer arbitration?
- Usually cheaper than litigation: because the process is quicker and
generally less complicated than a court proceeding
- Faster than litigation: 475 days in an arbitration case. 18 months to
3 years for a court case.
- Flexible: + arbitration can be scheduled around the need and
availabilities of those involved, including weekend and evenings
- Private:
+ Arbitration proceedings are usually held in private. Parties
sometimes agree to keep the proceedings and terms of the final
resolution confidential
8. Advantages and disadvantages of FDI in Vietnam?
- Pros:

+ Infrastructure and technology transfer. Increased productive

efficiency due to competition from multinational subsidiaries
+ Employment
+ Consumer benefit
+ Increase in saving and investment
-

Cons:
+ hinder domestic investment coz it focuses resources
elsewhere.monopolize and take over the highly profitable sectors
+ Environment
+ Exchange rate to the advantage of one country and the detriment
of the other.

9. Advantages and disadvantages of franchising

Franchising is a practise by which one company( the franchiser)
supplies another ( the franchisee) with an intangible property and
other assistance over an extended period.
- Advantages:
+ Franchisers can use franchising as a low-cost, low-risk mode of
entry to new markets. It allows them to maintain consistency( nhat
quan) by replicating the process for standardized products.
+ rapid geographic expansion. Firms often gain a competitive
advantage by being the first in seizing a market opportunites
+ Franchisers can profit from the culture knowledge and know-how
of local managers
- Disadvantages:
+ Cumbersome( ngon ngang) to manage a large number of
franchisees in a variety of national market
+ Experience a loss of organizational flexibility in franchising
agreements
10.
Which mode of transportation do you like
to use?
SEA TRANSPORT
REASONS:
- Very high capacity of load
- Low freightt rates: 30 60% cheaper than road transport
- Safer: shipping operates away from people and it is 90 time safer
than road transport and 5 times safer than rail
- More fuel efficienct: 6 times less than road and rail
- Low noise, less restrictive
11.
Today high sales of popular consumer
goods reflect the power of advertising and not the real needs of the
society in which they are sold. Do you agree?

Nowadays millions of companies produce billions of products and the

role of advertising is quite obvious. Ads help consumers to find the
goods or services of their needs. However, do our needs grow equally
fast as the number of products? Some market analysts insist modern
commercials are not merely matchmakers of a product and a
consumer, but actively interfere with buyers desires, developing
artificial needs.
Undoubtedly, advertisement guides people through the market, serves
those who do not have time to learn differences between goods. These
products are probably the same, but loyalty to a particular brand,
formed by a commercial helps make a choice. When a person buys one
mobile phone out of 50 models, he thinks he made his choice himself.
But that was a commercial who told him about the features of this
phone.
Nevertheless, ads not only inform us about new goods, but force
people to want them. This can be even useful, for example for
someone who suffers from back pains and without commercials he
would never imagine there are new mattresses which could ease their
pains.
Unfortunately, promoters now operate our minds more aggressively.
Commercials no longer promote products, but lifestyles. They told us to
purchase things just because they are fashionable or up to date with
the image of successful person. And we buy new cars, gadgets and
clothes in order to match this image and not because old ones are no
longer usable.
Personally I think that high sales of popular commodities are the result
of new promotional technologies. The best illustration of that is that
everyone now is concerned mostly about how a new mobile phone will
reflect his personality, a new shirt his image, or will a new car make
colleagues feel jealous.