3.9.3 Assessing internationalism Flashcards
What is internationalism?
Business operating on an international scale
What are the 5 biggest uk exports?
- Machines
- Gems
3.Vehicles
4 Pharmesuticles
5 Oil
Reasons for international trades expansion
- More efficient transport of goods
- larger global population
- Better global economy
What is a trading block
An agreement with a group of countries that promote free trade between members
Benefits of a trading block
Free trade
Protects them,
good relationships between countries
Limitations of trading blocs
doesnt benefit all countries equaly
What is protectionism
countries looking to protect their own countries business,
with tariffs, quotas, embargos (Banning trade with a country)
What are the methods of entering international markets
Direct investment - investing abroad
Alliance - partnering with a foreign business
Licensing - giving rights to sell
Exporting - producing domestically to sell abroad
Glocalisation
Benefits of acting in many countries
Higher sales (your increasing the amount of possible people who can buy your product likely increasing the amount of sales)
The drawback of acting in many countries
could mean high tariffs in certain places
you could spread your operation too thin and go out of business
finance
What is an MNC
MULTI NATIONAL CORPORATIONS
A business in several countries (Multinational operations)
benefits of a MNC
lower cost of production
access to more sales as there are more people
boost domestic economy
provide jobs for locals
drawback of MNC
difficult to manage
may have to change the product (mc Donald’s maharajah mac rather than the big mac)
send profits back to home country’s
often pay low wages
impacts MNC have on the local community and economy
job creation
working condition
bring in foreign currency
better pay
factors to consider when assessing a countries market
size of gdp and gdp growth
disposable income
competitive rivalry
infrastructure
political stability
ease of doing buissness
factors to consider when assessing a country as a production location
infrastructure
minimum wage
government incentives
import tax
national resources
strength of currency
economic conditions
cost to rent
pressures of operating internationally
spread to thin
hard to manage all locations
growth
pressure to lower costs
what is the difference between ofshoring and reshoring
off shoring - moving jobs to other countries
reshoring - going back to your origin country
benefits of off shoring
cheepe tax
lower minimum wage to cut costs
drawbacks of offshoring
lack of flexibility
could mean your spread to thin
investment required
have to learn new market (time)
reshoring advantages
you know the market
could have benefits
disadvantages of re shoring
adapt to domestic laws
cost of moving back
changes in market
what is the Bartlett and Ghoshal matrix
how to manage an international buissness and the pressure of having one
what are the stages of the bartlett and ghoshal matrix
- Global strategies
- Transitional strategies
- International strategies
- multi domestic strategies
What is the definition of glocalisation
adapting your product to meet different cultural differences
benefits of glocalisation
respect culture
good PR
locals feel understood and needs met
drawbacks of glocalisation
you have to adapt your product everywhere which can be expensive and time consuming
new location may want the og product
factors to consider when operating internationally
how much money they have
if they can increase production
amount of staff needed
minimum wage
tax
domestic laws
(Operating internationally) what are the impact on functional areas
marketing - cultural differences
finance - currencies
operations - transport + distribution
human resources - recruitment/ firing
