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Theme 4 > 4.1/4.2/4.3/4.4 > Flashcards

4.1/4.2/4.3/4.4 Flashcards

1
Q

Globalisation

A

businesses operating in lots of countries around the world

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2
Q

GDP

A

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

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3
Q

3 indicators of economic growth

A

literacy rate, health , HDI

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4
Q

emerging economy

A

fast growing but not fully developed

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5
Q

BRICS economy

A

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

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6
Q

MINT economy

A

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

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7
Q

FDI

A

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

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8
Q

pros of FDI

A
  • 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
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9
Q

pros and cons of trade liberalisation

A

+ 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

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10
Q

primary and secondary sectors

A

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

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11
Q

tertiary and Quaternary sectors

A

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

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12
Q

Causes of globalisation

A
  • increase in world population
    -migration
    -increased FDI
    -increase in MNCs
  • transport and communications easier and cheaper
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13
Q

protectionism

A

when government protects domestic businesses and jobs from foreign competition

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14
Q

tariff and quotas + and -

A

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

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15
Q

Government legislation

A

trade sanctions e.g embargo

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16
Q

Subsidies

A

sum of money given to a domestic industry

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17
Q

NAFTA and ASEAN (what they stand for)

A

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

18
Q

3 pros and cons of being in a trade bloc

A

+ 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

19
Q

push factor

A

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

20
Q

examples of push factors

A

saturated market
competition

21
Q

pull factor

A

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

22
Q

offshoring

A

moving certain departments overseas

23
Q

Reshoring

A

moving departments back to its country of origin

24
Q

non financial pros and cons of a firm moving abroad

A

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

25
Q

5 factors that make global markets attractive

A
  • levels of disposable income
    -some countries easier to sell to e.g trade barriers, language barriers
    -good infrastructure
    -good political stability
    -exchange rates
26
Q

assessing a country as a product location- things to consider

A

-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

27
Q

joint venture

A

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.

28
Q

Global merger

A

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

29
Q

reasons for joint ventures and mergers

A

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

30
Q

2 ways to gain a competitive advantage globally

A

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

31
Q

Glocalisation

A

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

32
Q

ethnocentric

A

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

33
Q

pros and cons of an ethnocentric approach

A

+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

34
Q

Polycentric approach and pro and con

A

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

35
Q

geocentric approach

A

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

36
Q

pros and cons of geocentric approach

A

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

37
Q

pros and cons of global niche markets

A

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

38
Q

MNC

A

branches or departments in more than one country

39
Q

2 positive and negative effects of MNCs

A

+ 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

40
Q

positive effects of MNCs on national economy

A

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

41
Q

negative effects of MNCs on national economy

A
  • bad for domestic firms
    -loss of national culture

Theme 4 (1 decks)

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