4.1/4.2/4.3/4.4

Question 1

Globalisation

Answer 1

businesses operating in lots of countries around the world

Question 2

GDP

Answer 2

total market value of goods and services within a nation in a certain time period

Question 3

3 indicators of economic growth

Answer 3

literacy rate, health , HDI

Question 4

emerging economy

Answer 4

fast growing but not fully developed

Question 5

BRICS economy

Answer 5

Brazil, Russia, India, China, South Africa
cheap labour

Question 6

MINT economy

Answer 6

Mexico, Indonesia, Nigeria, Turkey
emerging economies, lots of young people

Question 7

FDI

Answer 7

when a firm in one country invests in a business in another country

Question 8

pros of FDI

Answer 8

• access to new markets (more people to sell too)
• skilled local labour
  -first hand knowledge- more in touch with consumers tastes
  -help overcome trade barriers

Question 9

pros and cons of trade liberalisation

Answer 9

+ imports become cheaper makes competitive and lower prices for consumers
+exporting cheaper
+more customer choice around the world
-domestic business threatened with cheap imports
-removal of national culture

Question 10

primary and secondary sectors

Answer 10

primary- obtaining raw materials such as agriculture and mining
Secondary- industries that manufacture goods from those raw materials

Question 11

tertiary and Quaternary sectors

Answer 11

Tertiary- services such as financial and health services
Quaternary- knowledge based services e.g IT and science research

Question 12

Causes of globalisation

Answer 12

• increase in world population
  -migration
  -increased FDI
  -increase in MNCs
• transport and communications easier and cheaper

Question 13

protectionism

Answer 13

when government protects domestic businesses and jobs from foreign competition

Question 14

tariff and quotas + and -

Answer 14

tariff- tax that has to be paid for imports
Quotas- limit on volume
+protects domestic firms
-restrict consumer choice
-removes incentive for domestic firms to improve quality

Question 15

Government legislation

Answer 15

trade sanctions e.g embargo

Question 16

Subsidies

Answer 16

sum of money given to a domestic industry

Question 17

NAFTA and ASEAN (what they stand for)

Answer 17

North American Free Trade Agreement
Canada Mexico US
Association of Southeast Asian Nations

Question 18

3 pros and cons of being in a trade bloc

Answer 18

+ lowers costs as suppliers can be cheaper to obtain from other countries
+ increase in skilled workers
+larger markets increase sales volume
-more expensive to import from countries not in the trading Bloc
-small domestic firms pushed out
-may need to adjust to comply with rules set by the Bloc

Question 19

push factor

Answer 19

motivate a firm to look at business opportunities in other countries
(pushed away from the domestic market)

Question 20

examples of push factors

Answer 20

saturated market
competition

Question 21

pull factor

Answer 21

something which makes it attractive for a business to trade abroad
e.g global economies of scale
expanding to limit risk of failure in one market

Question 22

offshoring

Answer 22

moving certain departments overseas

Question 23

Reshoring

Answer 23

moving departments back to its country of origin

Question 24

non financial pros and cons of a firm moving abroad

Answer 24

+create new jobs in the country
+investment of help build new roads etc by paying tax
-exploitation of overseas workers
-pollution
-impact on reputation

Question 25

5 factors that make global markets attractive

Answer 25

- levels of disposable income -some countries easier to sell to e.g trade barriers, language barriers -good infrastructure -good political stability -exchange rates

Question 26

assessing a country as a product location- things to consider

Answer 26

-costs off production e.g lower wages -skill and availability of labour - trading blocs -ease of doing business -government incentives e.g lower corporate tax -political stability -likely return on investment

Question 27

joint venture

Answer 27

legal agreement between two or more firms to work together on a joint project. Separate identity from business that created it. Set length of time.

Question 28

Global merger

Answer 28

two or more firms in different countries agree to become a single business

Question 29

reasons for joint ventures and mergers

Answer 29

Spreading risk- one firm will have good knowledge inn the market they are in helping the other firm adjust. Access to different markets- access to a trading BLOC without tariffs Securing resources and supplies

Question 30

2 ways to gain a competitive advantage globally

Answer 30

cost competitiveness- relatively low costs compared to competitors which allows to charge lower prices e.g offshoring Differentiation e.g outsource to specialised producers

Question 31

Glocalisation

Answer 31

adapting marketing strategies between different countries. -adapted to consumer tastes, and take advantage of cheap local production

Question 32

ethnocentric

Answer 32

approach to global marketing treats all of a firm's markets as being similar with little/no adaptation.

Question 33

pros and cons of an ethnocentric approach

Answer 33

+economies of scale +use of same marketing and promo tools + less time and money on research -might not fit into the countries market -negatively in one country can damage reputation globally

Question 34

Polycentric approach and pro and con

Answer 34

different products and marketing strategies in each country + customers needs met -research expensive

Question 35

geocentric approach

Answer 35

example of glocalisation uses local factors, but marketing stays the same e.g Mcdonalds adapting their menu

Question 36

pros and cons of geocentric approach

Answer 36

+increased sales due to meeting customer needs +money saved by same advertising -costly to adapt products

Question 37

pros and cons of global niche markets

Answer 37

+ high customer loyalty +usually price inelastic products so can charge higher prices -low sales volume less revenue - can't benefit from economies of scale

Question 38

MNC

Answer 38

branches or departments in more than one country

Question 39

2 positive and negative effects of MNCs

Answer 39

+ creation of jobs +improves local standard of living (employee wages improved) -forces up local wages which local firms may not be able to pay -exploitation of groups such as child labour

Question 40

positive effects of MNCs on national economy

Answer 40

-large FDI flows contribute towards countries balance of payments -cheaper products for consumers

Question 41

negative effects of MNCs on national economy

Answer 41

- bad for domestic firms -loss of national culture