4.2 Flashcards
push factors
business feel like they have to expand internationally because of domestic issues
saturated markets-growth opportunities for the same product in overseas markets where consumers share similar characteristics. , If every potential customer has already bought a subtitute, the only scope for further sales is replacements or upgrades. Often this forces a business into entering new geographical markets; lack of product innovation, diffuvilt to rasie reneue
increased comp- new entrants who take market share, lower revenues, powerful competitor may be able to bring significant financial resources to support its products or services. Therefore, an existing business may decide to sidestep the new competitor by focusing on a foreign market, using the same product or service. This strategy may be the only real route to survival.
pull factors
business affected by compelling opportunities to grow by expanding intentionally
EOS- incraese profit and reduces cost, offhsoring production to lower eos
ris spreading- ansoff matrx suggests taht ocing into new markets oversease involves greater risk mark devlopment
however tarding can sperad activiteis and reveues into wider range of markets, less depandat on domestic demand
offshoring
outsourcing
assessing a country as a market
Disposable income is the amount a household has left after income taxes have been deducted. Generally, it equates to GDP (national income) divided by the population size, i.e., GDP per capita. wealthier, they don’t just spend more, they spend differently. They switch from buying food to buying restaurant meals; and switch from buying cheap cartons of orange juice to buying freshly squeezed juice or smoothies.
sustainability of each country’s growth rate. If a country is running large public and external deficits, it is living beyond its means and its level of GDP may not be sustainable in the long term.
What businesspeople want is to be able to do what they want, as quickly as possible and with the minimum of government involvement.
o ease of doing business
o infrastructure
o political stability
o exchange rate
barriers to entry
global mergers
global competivness
exchnge rate
joint venture
sepearte business entity created by two or more parties, involving shared ownership returns and rates
benefist from each oters expertise and resources market lowlege customer base disrubiton channels
might have option to acquire in the future bsuiens sbased o agreement
reduces risk of growth stratgery
clash od orfansiatiola stucture
ojeuveis may chhange
) Factors to consider:
o costs of production
o skills and availability of labour force
o infrastructure
o location in trade bloc
o government incentives
o ease of doing business
o political stability
o natural resources
o likely return on investment
Reasons for global
mergers or joint
ventures
) Spreading risk over different countries/regions
b) Entering new markets/trade blocs
c) Acquiring national/international brand names/patents
d) Securing resources/supplies
e) Maintaining/increasing global competitiveness
) The impact of movements in exchange rates
b) Competitive advantage through:
o cost competitiveness
o differentiation
c) Skill shortages and their impact on international
competitiveness
