4.1

Question 1

emerging economy

Answer 1

economy in the process of rapid growth and industrialisation.
BRICS Brazil, Russia, India, cons, South Africa
MINT Mexico , Indonesia , Nigeria, turkey
Growth rate faster creating more opportunities

Question 2

Growing economic power of countries within Asia and Africa

Answer 2

•  The growth of China has become a regional hub that has sucked in supplies and therefore fostered greater growth among countries such as Vietnam, Indonesia, and Cambodia; the first two are especially important because of their huge population sizes: Vietnam has a population of 95 million and Indonesia is the world’s fourth most populous with 256 million.

•  Many Asian countries follow the examples set by China and Japan and take education extremely seriously; this sets them up nicely for improved production of higher value-added products.

•  Historically, the West has been the focal point for global trade; the dramatic rise of China has changed much of this. This may have an ongoing impact not only on trade in goods but also services, including tourism as well as banking, insurance and so on. The opportunities for Britain get ever greater as these economies increase their need for the things, we are best at: services. with products been produced in emerging economies.

Question 3

as economies develop adv

Answer 3

as economies develop, unemployment rate falls, creating opportunities for international trade as increase in income causes increase in demand in economy, as economies grow so does the skill level of workers and education, offers international business opportunity to hire skilled posts when producing abroad.

Question 4

indicators of growth

Answer 4

GDP
Literacy
HDI

Question 5

GDP

Answer 5

GDP is the measure of all goods and services produced in a country divided by the number of people in the country. GDP per ind.
Increase in GDP means an increase in disposable income

Question 6

Health

Question 7

Literacy

Answer 7

Gives an indication to the standard of living in terms of quality of education and skills of a workforce- better quality workforce, and nature of products/services, more purchases
still language barrier, communication issues

Question 8

HDI

Answer 8

combines a range of economic statistics of a country, might use the data to analyse the potential demand, income and skills of country
doesn't take into account qualitative factors, such as cultural identity and political freedoms
doesn't take into account income distribution- inaccurate GDP calc.

Question 9

international trade

Answer 9

exchange of goods/services takes place between the economic agents
Export revenues and jobs help to reduce poverty.
EOS- lower unit costs
tech spread raising productivity

Transport costs emission from food miles
pressure on wages and working conditions
risk from global shocks

Question 10

exporting

Answer 10

a product is produced in one country and sold in another.
significantly expand your markets, leaving you less dependent on any single one and for selling- more sales
Greater production can lead to larger economies of scale and better margins.

Question 11

FDI

Answer 11

Direct investment from one country to another, leading to a business becoming MNC.
an inward FDI is like a foreign business build a manufacturing factory in the UK, oprn stores in UK. outward FDI is UK expanding into overseas market by opening production facility.
Domestic market will eventually become saturated, making growth far harder to achieve. So, managers look overseas to find new unsaturated markets abroad.

The most obvious way to supply an overseas market is by exporting. This approach can work very well, especially if domestic factories are running at low levels of capacity utilisation. This will make it relatively easy for a firm to produce the extra output needed to begin supplying customers abroad without the need for any expensive capital investment in new machinery.

but supplying overseas via FDI is cheaper because wage rates are lower, env and labour laws are more relaxed
takes time and money moving products from one to another, esp if bulky.
avoid tariffs/quotas

Question 12

globalisation

Question 13

protectionism

Question 14

trading blocs

Answer 14

A trading bloc is a group of countries that trade freely with reduced or no tariffs and quotas on trade between businesses in these countries.

Question 15

business opportunities and threats from emerging economies UK

Answer 15

Growing number of educated middle class- more disposable income, growing consumer spending.
Cultural shift, higher demand for personal products
source of high skilled but low labour cost outsourcing/offshoring

Inadequate protection of brand and other intellectual property
low cost production makes developed countries uncompetitive in some markets.

Question 16

specialisation

Answer 16

a business concentrates on a specific range of products
Firms become more efficient when they can produce more output from the same number of raw materials, machinery, energy, and labour. If firms can squeeze more output from the same inputs, average cost will fall. Specialisation can help firms to achieve this outcome. Firms that produce several products may need different machines to produce each of their products. If sales of some of a firm’s products dip, capacity utilisation will dip with it, leading to higher average costs. Single-product companies that have chosen to specialise will in all probability require less machinery. Theoretically, lower capital costs should help a firm to reduce its unit costs. The same principle applies to training expenditure. Multi-product firms will spend more on training than single-product companies, because in a multi-product firm there will be a greater need for the workforce to be flexible, so that they are able to work on more than one production line.
sell products that aren't available/easily available in other countries , attracting customers, not sell in saturated market as less developed countries have narrower range of products, differentiating.

Question 17

trading blocs

Answer 17

A trading bloc is another potential barrier to international trade. A trading bloc is a group of countries that work together to provide special deals for trading. This promotes trade between specific countries within the bloc.
NAFTA-Mexico, Canada and the United States. Free trade area has helped bring jobs to Mexico, but many Americans say that low Mexican wages are doing Americans out of well-paid jobs – and forcing real wages down.
The European Union (EU), trade freely with each other, which means that no tariffs are put in place. makes goods and services cheaper, which is good for both businesses that export and businesses that import within the EU. However, the EU also charges tariffs on many goods and services imported from outside the EU, which makes them more expensive.
ASEAN-southeast Asian nations.
Promotes free trade, which means trading without tariffs. Importing and exporting to countries outside the trading bloc can be expensive
There is often free movement of labour, eg people, across trading blocs Countries can often only be part of one trading bloc, which means they cannot enter others
Creates good trading relationships with other countries in the trading bloc

Question 18

imports

Answer 18

bringing goods/services from one country to another

Question 19

tariff

Answer 19

A tariff is a tax on imported goods and services. Many countries place tariffs on imported goods and services to make them more expensive for businesses and consumers to buy. They do this to restrict demand. By doing this, they aim to promote and protect businesses in the home country. This is known as a protectionist measure.
More money for the government Imported goods and services become more expensive
Businesses in the home country have a better chance of competing May cause other countries to impose tariffs in response, affecting exporters

Question 20

Competing internationally – internet and e-commerce

Answer 20

E-commerce is any business transaction that takes place using the internet.

Using the internet and e-commerce is becoming essential for businesses that want to expand, such as small businesses. This is because the internet and e-commerce provide easy ways for businesses to gain access to a much wider range of potential customers.

For example, a small clothes shop in Manchester could decide to set up a website and start selling clothes through e-commerce. The owner might also decide to create websites in different languages, to allow overseas customers to understand the information and purchase the shop’s clothes.

Advantages of e-commerce for a growing business include:

open 24/7
cheap to operate compared to physical stores
gives access to a huge range of potential customers
easy to sell to overseas customers
provides access to cost-effective promotional methods, such as social media and email advertisements

Question 21

Competing internationally – changing the marketing mix

Answer 21

The marketing mix refers to product, price, place and promotion. When they are trying to compete on an international scale, businesses have to adapt their marketing mix. This is because different countries have different beliefs, income levels, and levels of demand for each type of product. These differences affect each element of the marketing mix.

Changes that a business might need to consider include:

product - styles, fashion trends, sizing, cultural beliefs (eg colours that are considered lucky in one country may be associated with danger in another), dietary requirements (eg some places may require halal or kosher foods) and infrastructure (eg right- or left-hand-drive cars and different types of electrical plug)
price - may be affected by tariffs and trading blocs, income levels and disposable income, tax, exchange rates and level of demand
place - access to the internet in certain countries, purchasing preferences in some countries (e-commerce may not yet be popular) and distribution links in certain countries
promotion - cultural and social differences, language and translations

Question 22

SPICED

Answer 22

SPICED is good for businesses that import goods and services from overseas as it means products are cheaper because of the exchange rate. However, under SPICED, businesses that export goods and services may either sell less or have lower profit margins. This is because overseas buyers have to pay more due to the exchange rate, or the exporting business will keep the same price with a lower profit margin.

Question 23

WPIDEC

Answer 23

WPIDEC is the exact opposite. Importing goods and services becomes more expensive due to the exchange rate, and this extra expense is often passed on to customers. Businesses that export goods and services may see an increase in sales. This is because the exchange rate either makes the goods and services cheaper for foreign buyers or provides exporters with more profit.

Question 24

Expansion into emerging markets poses greater risks for businesses located in developed economies such as the UK, what are some of they key risks?

Question 25

trade oppurtunities

Answer 25

Trade Opportunities - Consumption may also be growing and this is good for investors. It is likely that disposable incomes are rising. This will increase the overall demand for goods and services. Demand is likely to become income elastic, providing greater opportunities for increased revenues and profits. These goods and services can be produced domestically or imported in.

Question 26

importing

Answer 26

NON-PRICE FACTORS AFFECTING EXPORTS AND IMPORTS
Price is not th only factor in determining exports and imports, for example exports will increase if:
Real GDP of other countries increases
Chnages in taste and fashion lead to interest in products
Price inelastic exports are likelyto see a fall in volume sales but an increase in total revenue
Productive capacity increases allowing for greater sales of a product
Product differentiation leads to greater demand for products.

Question 26

importing

Answer 26

goods and services that are bought into one country from another