4.2

Question 1

Push factors

Answer 1

Those that force a business to leave the market in which they currently operate into another

Question 2

Pull factors

Answer 2

Those that attract a business to a global market

Question 3

Offshoring

Answer 3

Occurs when a business relocated production to another country

Goal is cost minimisation -> labour/transport costs

Question 4

Outsourcing

Answer 4

Occurs when a business contracts out production to another business.

Leads to loss of control but a business is better able to match supply to demand

Question 5

Ease of doing business

Answer 5

How accessible markets are for a business

Question 6

Factors to choose a country as a market

Answer 6

• ease of doing business
• levels and growth of income
• infrastructure
• exchange rates : WPIDEC/SPICED

Question 7

Factors to choose a country as a production location

Answer 7

• skills and availability of labour force
• infrastructure
• trade blocs
• government incentives
• ease of doing business -> excessive bureaucracy = increased time and costs
• natural resources

Question 8

A global merger

Answer 8

Occurs when two businesses join together beyond the boundaries of a specific country

Question 9

A joint venture

Answer 9

When two or more business agree to act collectively to set up a new business venture -> don’t merge

Question 10

Reasons for joint ventures

Answer 10

• risk is reduced -> if one country is in a recession, another country maybe in a boom
• developing countries -> potential future revenue
• having a global brand reduced the need to have local variations