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A-Level Business 📈 > 4.1 Global Businesses 🚻 > Flashcards

4.1 Global Businesses 🚻 Flashcards

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1
Q

What are the two types of global marketing strategies?

A

Global marketing - planning, producing, placing and promoting a business’s product or service to the global market

versus Glocalisation - aim to reach customers globally and also take into consideration the needs of the local market

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2
Q

What do businesses not have to do on global marketing?

A

Don’t have to differentiate, but can change price or promotion to suit the market

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3
Q

How do global brands view the world?

A

As a worldwide market place suit worldwide audience

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4
Q

What is the benefits of having a global marketing decisions?

What is the only difference?

A

Professional messages will be the same

reducing average marketing costs

leading to promotion economy is a scale

Sales incentives may vary

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5
Q

What are the 6 positives and 3 negatives of global marketing?

A

Positives

The economy of scale in production and distribution low as average marketing costs

power in market as brand is known - strengthens

consistency in brand image - good for globalisation gain competitive advantage

ability to leverage good ideas 💡

Good if you want to spread risks and grow

Negatives

different consumer needs and wants

Different consumer responses to mocking mixed elements

Different legal environment may have conflicts with those within the market

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6
Q

What made business be able to do if they meet local needs through glocalisation ?

A

Successfully penetrate into local markets

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7
Q

How may we adapt the marketing mix to global markets? (Place)

A

Place - identify the best distribution channel
- convenience

available technology as many transactions take place via e-commerce

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8
Q

How can we adapt the marketing mix’s product to global markets?

A

how much they should modify or adapt their products to meet new markets

They need to consider if they will take an ethnocentric, polycentric or geocentric approach

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9
Q

How can we adapt the marketing mix’s price to global markets?

A

Take into account customer incomes and cost of production and taxes

State of the economy - impact pricing strategy

and the product life-cycle of the product

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10
Q

How can we adapt the marketing mix’s promotion to global markets?

A

adapted to meet language and cultural differences

This is need to find the most effective method of promotion

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11
Q

Why would the Ansoff’s matrix be a good strategic planning for businesses going global?

A

Globalisation generates risk so we need to have the right growth strategy

Allows them penetrate global markets and achieve long-term success

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12
Q

what strategy should do if they go into existing global markets?

What may businesses have to do ?

A

Market penetration

  • selling existing products to existing markets - Carries the least risk - business already operates in a market - customers are already familiar with the business

product development -
selling existing products to new markets
may have to adapt the product to meet the needs of customers in global markets - have different preferences

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13
Q

What are the two strategies under an of matrix that business should do when going into new global markets?

What kind of strategy is this And why?

What does this require?

A

Diversification
new products for new markets

A high risk strategy - limited knowledge about the market

requires a deep understanding of local market conditions and consumer behaviour to

Market development- new products into existing markets and identify needs and preferences

may have to adapt the marketing mix for local consumers

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14
Q

What are the three different marketing approaches?

A

Ethnocentric - the belief that the company’s home country culture and marketing practices are superior to those of other countries

There will be no changes to the products for overseas customers and marketing of the product will be the same

Polycentric- adapt their marketing strategy by tailoring their products to the local market

geocentric- a mix of the polycentric and ethnocentric approach

This approach utilises the benefits of standardised products - tailors products to meet the needs of local markets overseas

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15
Q

What does the geocentric marketing approach maintain?

A

maintaining a consistent brand image across markets

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16
Q

What are the positives and negatives of the
Ethocentric marketing approach?

A

Positives

economies of scale as the product is standardised and produced on a large scale

Costs are also lower as there is no investment into product development

Negatives

The business could potentially lose sales as the product - not tailored to the needs and wants of markets overseas

This approach can lead to cultural insensitivity may not resonate with local customers in other countries

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17
Q

What are the positives and negatives of the polycentric marketing approach?

A

Positives
Sales are likely to increase as the product is tailored to meet the needs of customers

This helps to develop brand loyalty in overseas markets

Negatives

Product development to adapt the product may increase average unit costs

There will also be additional costs in market research to find out about the market

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18
Q

What are the positives and negatives of geocentric marketing approach?

A

Positives

Sales are likely to increase as the product is tailored to meet the needs of customers

This helps to develop brand loyalty in overseas markets

Negatives

There will be costs associated with the product development and menu changes

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19
Q

What is a global merger?

A

A permanent agreement between two businesses from two different countries to join together

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20
Q

What is a joint venture? For how long?

A

When two businesses joined together to share knowledge resources and skills - to form a separate legal entity for some time

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21
Q

What are the five reasons for merges or joint merger ?

A

Risk spreading

entering Newmarket and trade blocks

Acquiring national and International brand names and patents

Securing resources and suppliers

Maintaining/increasing global effectiveness

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22
Q

What risk spreading under the reasons for global mergers and joint ventures?

What are they associated with?

What if there is this in one in one market?

A

Fluctuating economical conditions -

economic downturn in one market,
- may still gain sales in another market that is less affected

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23
Q

How is entering a market are reason for growth merger and joint venture?

What is it a quicker method of?

What made the government insist?

A

Entering a market using a merger/joint venture is a quicker method than using organic growth

Can operate as joint ventures as they can benefit domestic businesses

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24
Q

What does entering a new market and trade bloc as reasons for global merges and business ventures?

A

Allows us to gain knowledge and business for the local market

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25
What is a patent? Under reasons for global merges and joint ventures?
Legal right the government to businesses and individuals to make use or sell an invention or exclude others from doing so.
26
What kind of process is acquiring national brands under reasons why we have global mergers and joint ventures? What is it a good access to?
Long and expensive access to intellectual property or a business with a strong reputation
27
How may a global merger or joint venture help secure suppliers? What does this allow?
Two businesses constantly merge and get access to resources - gain access to resources quickly helps to speed up the production process
28
What do businesses have to be aware of when doing a global murder or joint venture for access to suppliers?
ethical issues concerning the resources - can damage the reputation of the business
29
What can businesses benefit from when becoming a merger and joint venture?
Benefit from economies of scale - decrease costs - can lead to increases sale and market share
30
What are the positives and negatives of global mergers and joint ventures? (6)
Positives Economies of scale - costs spread over larger output - lead to increased profit margins Diversifying risk - can still generate revenue from other products Opportunity to enter new markets- may be closed to the business Negatives The initial costs of merging - be significantly high No guarantee may not be successful Diseconomies of scale - lack of communication issues culture clash - leading to poor sales
31
What are the five things we need to consider with diversification?
Potential market growth infrastructure, political stability, ethical considerations Nature of your product and service
32
What is not the best when you’re trying to do market penetration under ansoffs matrix?
Saturated market
33
What is cultural diversity?
Recognition that different groups around globe have different interests and values
34
Why is international business communication important for cultural diversity?
Cutest move International business greeting rituals are important - settle negotiation
35
What is the global niche market?
Smaller parts of the global market - customers are more than one country - specific needs that remain unfulfilled by global market
36
What is the global niche market made up of?
Several small markets
37
Why have global niche markets been able to grow? (2)
Globalisation influence of social media platforms - help promote niche to wider audiences
38
What are the positives and negatives of being in a global niche market?
Positives Limited level of competition Products price inelastic - can charge a higher price Spread risks across market Negatives Decrease in sales volume- less opportunities to achieve economies of scale High profit risk additional competition Each niche is slightly different - adds to cost
39
What is cultural diversity?
Recognition of people different interests and values across the world
40
What business is aware of under cultural differences?
aware of how businesses and customers interact in new global markets
41
What are the six cultural and social factors businesses need to take within a global market?
Cultural differences Different taste language Unintended meanings Inappropriate translations inappropriate branding
42
What do businesses need to understand under cultural differences under cultural and social factors in global markets?
cultural differences - beliefs - adapt their marketing strategies accordingly
43
What do tastes and preferences do under global cultural factors?
Vary from region to region
44
What do businesses have to ensure under test and preferences?
ensure that their products and services are adapted to meet local preferences
45
What do businesses have to ensure on the language?
That product names are translated properly and accurately - understanding idioms
46
How may unintended meanings arise under cultural factors ?
Things may have different connotations in different cultures
47
What kind of use inappropriate translations lead to under cultural factors?
lead to serious consequences for businesses, loss of credibility + reputation
48
What my business is due to avoid the inappropriate translation under cultural factors?
Can consult in local experts
49
When can inappropriate branding occur?
When symbols are wording can be offensive or inappropriate
50
How do we adapt The marketing mix to suit global niches?
price - find a pricing that will be attractive - competitive towards the audience set high prices - premium place - find distribution strategy that would be best suited - target market - exclusive product - modify the product to meet specific needs of the global niche market promotion- marketing communication strategies that resonate with the target audience - exclusive magazine - target audience
51
What happens if a niche product is successful in one country on global market?
Does not guarantee it will successful in other countries - may have additional costs
52
What are high context cultures?
Communicating in ways that are implicit and rely heavily on context
53
What are low contact cultures?
Communication is explicit and precise ways
54
What are the seven impacts of MNCs on the local economy?
Local labour and job creation Wages and working conditions Local businesses Local community and the environment Improvement of infrastructure Contribution to local government taxes helping local communities
55
What is a multinational corporation ?
A business registered in one country but has manufacturing operations/outlets in different countries
56
What are the positives and negatives of MNC’s towards local labour and job creation?
Positives job creation competitive wages better working conditions than local businesses Negatives Exploit local workers establish production facilities where labour costs are lower and pay relatively low wages May not create jobs may just relocate from own countries
57
What are the positives and negatives of having an MNC for local businesses?
Positives to boost the local economy creating opportunities for local businesses population is benefiting from higher wages- spend more on local business products MNCs may utilise the services of local businesses be potential opportunities for joint ventures and partnerships with MNCs who seek to gain knowledge of the local market Local firms may learn new skills and production methods that allow them to become more efficient Negatives - MNCs reduce the supply of workers available to local businesses if they offer better pay and working conditions able to produce at a lower cost and compete with local businesses, they may lose local customers If local businesses lose customers, this may also cause unemployment for workers of local businesses
58
What are the advantages and disadvantages of MNCs towards the local community and the environment?
Positive locals benefit from job opportunities MNCs create better infrastructure May have charitable incentives increase the amount of coperate tax charged negatives cause damage to local environment Extract natural resources
59
What are the 6 impacts MNC’s have on the national economy?
FDI flows Balance of payments Technology and skill transfer Consumer business culture tax revenue and transfer pricing
60
What is reverse engineering?
Analysing products designed by taking it apart
61
What is Transfer pricing?
A technique MNCs use to avoid relatively high tax rates to prices which one subsidiary charges another for components and finish goods
62
What is FDI ?
Amount of money they spend on establishing the facility within a foreign country
63
What are the four things MNCs do with FDI flows towards the national economy?
Increase an income- if flows lead to higher GDP increase in tax revenue More employment reduction national debt - due to the government receiving more tax from MNCs country reduce that are more financially stable
64
What is a balance of payments? What do MNC’s do?
A document that shows the financial transactions between the country and the rest of the world MNCs can help to improve the balance of payment of a country as the FDI flows into the country will help improve their balance of payments Exports will generate further in flows
65
How can MNCs negatively impact balance of payments?
If they send profits back to their country - be represented as a outflow of payments
66
What are the positives and negatives of FDI?
Positives initial lump sum of money that enters the country to pay for the investment This money enriches local firms or citizens who now have more money available to spend in the economy If this money is reinvested back into the local economy, it may help to generate new jobs and boost economic growth Cons Assets from the home country are now owned (or partly owned) by foreign businesses may not reinvest the money into the local economy but may move it abroad/offshore
67
How do MNCs on a national economy impact consumers? However?
More choice high-quality - use of good tech lower prices- France will be made more cheaper more effective because of technology and production better living standards- because of high employment people have more disposable income However, this may force domestic businesses out of the market
68
How do MNCs impact on national economy technology and skill transfer?
MNCs can bring new technologies and skills to local businesses help to improve efficiency and productivity, helping domestic businesses to become more competitive in the national and international market Horizontal transfers are when knowledge is transferred across the same industry Vertical transfers may be forward or backwards
69
What can businesses do to rival products under technology and skill transfer as an impact of MNCs on the national economy?
Reverse engineering - they can take apart rival products to analyse its design
70
How do MNCs have an impact on the business culture? Negatives ?
Domestic businesses may be influenced by the business culture of MNCs Workplace - become more open- using Kaizen Entrepreneurship is encouraged Negatives they can encourage unethical behaviour - company culture of exploitation
71
What is transfer pricing? How do MNC’s impact the national economy through tax revenue and transfer pricing?
method used by MNCs to shift profits from where they are generated to countries with lower tax rates - more venues made, but there’s less tax than made by the government in the host country
72
What is a joint venture? What is this usually ?
A separate business entity created by two or more parties involved shared ownership returns and risks 50/50
73
What are the three positives and four negatives of a joint venture?
Gain knowledge and expertise Acquire opinions and that may be good for the future reduce risk of growth strategy - market diversification Negatives clash of cultures, objectives clash imbalance of levels of experts and investments What if it fails who has responsibility?
74
What is licensing?
Process that allows business to sell a product
75
What are examples of current assets?
Creditors cash stock 
76
What’s are some examples of current liabilities?
Creditors, overdraft
77
Where do you find the current ratio?
Balance sheet
78
What does the range of liquidity ratio depend on 
The type of industry( 1.5 to 2 )
79
What does having a good ratio suggest?
Your assets have good liquidity you have good working capital management 
80
What’s the valuation? If it’s a high number? What is the reason? (10)
Debtors to slow up to slow chasing up debts Cash - 💸 could you be doing something better with it?  Stock - why so much?
81
What are the reasons for a low number? 
You’re unable to cover short-term liabilities 
82
What is the liquidity ratio for the acid test? 
Measure the ability for business to pay off current liabilities using card access without including inventory 
83
Where do we find the acid test ratio?
Statement of financial position
84
What is the target?
So it expresses a ratio blank : 1 
85
If it is 1.5 to 1 it means you can cover current liabilities 
If 1:1 no
86
What is A more conservative measure of l acid test ratio? 
Liquidity measure as it excludes inventory 
87
What does the acid test examine not exam?
How well debtors will pay up
88
Why should stock be? Why should the aid test should be higher?
If a business has lower stock time 
89
What should the acid test ratio be?
Higher if the business has no negotiating power over suppliers 

A-Level Business 📈 (68 decks)

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