4.2 Flashcards
push factor definition and examples
situations that force businesses to look for opportunities in foreign markets
1. market saturation (growth slowing)
2. competition
pull factors definition and
positives of moving to new markets (2)
attractive features of foreign markets
1. economies of scale
2. risk spreading
outsourcing definition and drawbacks
hiring an external business to do a specific job
- reliant on third parties, loss of control
- less flexible , costly?
assessment of a country as a market factors (5)
- levels and 2.growth of disposable income
- ease of doing business
- infrastructure
- political stability
- exchange rate
assessment of a country as a production location factors
- cost of production
- skills and availability of labour force
3.trade blocs - government incentives
- ease of doing business and infrastructure political stability
- natural resources
joint venture definition
two separate businesses coming together to achieve a goal
reasons for global mergers and joint ventures (5)
- spreading risk (multiple markets)
- entering new markets/getting access to new trad blocs
- acquiring patents / intellectual property
- increasing global competitiveness
factors that impact the significance of the fluctuation of exchange rates
- elasticity of demand, if the demand is less responsive to price changes, fluctuations in exchange rates won’t matter
- relative economic growth, economic growth within domestic market counterbalances a fall in demand
two ways to achieve global competitiveness
- cost competitiveness (economies of scale) (vertical integration)
- differentiation (adapting products to meet local markets)
skills shortages and competitive advantage
skills shortages reduces efficiency of workforce
global level operation allows larger workforce and ‘pool’ of skills
