2.1- part 2 Flashcards
What is globalisation?
When businesses operate on an international scale and gain International influence or power
What 3 ways does globalisation affect a business?
- Imports
- Exports
- Business locations
How does imports affect a business?
- Imports=goods bought into the country from abroad
- Creates competition for domestically produced goods
- Allows raw materials to be bought more cheaply
How does exports affect a business?
- Money flows into the country
- Provides business with a wider target market
Why is location important in globalisation?
Globalisation affects where businesses choose to locate their offices
What is tariff?
A tax imposed on imports or exports
How does a tariff affect a product?
- Makes a particular product more expensive
- Aims to reduce the demand for imported goods
- Tariffs are protectionist measures put in place to protect a country’s businesses and employment by reducing competition from abroad
What is a trading bloc?
A group of countries that agree to act together to promote trade between themselves
Advantages of trading bloc
- Countries can benefit from sharing workers, knowledge and expertise
- Businesses may be able to change location
Disadvantages of trading bloc
Provides trade barriers for countries outside the trading bloc
How does the internet affect how a business operates?
- They can compete internationally
- Communicate with customers around the world
- Used as promotion/ can give competitive advantage/ brand loyalty
Why might a business change it’s pricing strategy coz of globalisation?
- Different currencies
- Exchange rate fluctuations
- Tariffs
- Tax laws
- Different standards in living
Why might a business change it’s place coz of globalisation?
- Availability of technology
- Cultural differences
Why might a business change it’s promotion coz of globalisation?
- Language differences
- Cultural differences
Why might a business change it’s product coz of globalisation?
- Cultural or physical differences
- Technological differences
- Tastes and cultural preferences
What are the different types of ethical behaviour?
- Treating workers fairly
- Treating suppliers fairly
- Ethical sourcing of materials
- Caring for community
- Treating consumers fairly
- Meeting gov requirements
What is bad about a business not behaving ethically?
- Attracts negative media attention
- Damage reputation
What is a trade off?
A balance between 2 different or opposing objectives
Advantages of ethical behaviour
- Customers willing to pay higher prices for ethically sourced goods
- however profit margin decreases
How does behaving in an environmentally friendly way affect a business?
- Give business competitive advantage
- help build brand loyalty amongst customers
- Large business carry out green audit to see their impact on the environment
What is a pressure group?
- A group of people who join together to try to influence government policy
- they force businesses to take action
How would a pressure group attract media attention?
- Boycotting
- Viral marketing
- Public protesting
- Online petitions
How does a pressure group influence product?
- Change ingredients to use ethically sourced materials
- Remove a product form the range
How does a pressure group influence price?
- Increase price as a result of fair trade etc.
- Apply a minimum price on goods
How does a pressure group influence place?
- Not opening stores in certain locations
- Sourcing local products
How does a pressure group affect promotion?
- Honest information packaging
- Obeying legislation,banning promotion of certain products eg. Cigarettes
- Reviewing product placement in stores
