4.2 Global Markets And Business Expansion Flashcards
Definition of Push factors
Adverse factors in the existing market that encourage an organisation to seek international opportunities
Definition of Pull Factors
Entice firms into new markets as they provide new opportunities that they can take advantage of
Definition of Outsourcing
Shifting job to other organisation
Definition of Off shoring
Shifting jobs to other countries
Factors to consider when assessing a country as a market
Levels and growth of disposable income
Ease of doing business
Infrastructure
Political stability
Exchange rate
Definition of Infrastructure
The basic physical and organisational structures and facilities
Definition of Exchange Rate
The price of one currency against another
Ease of doing business
Problems may be experienced with goods entering the country
Problems with setting up premises
Problems with everyday trading activists
Regulatory burden on new businesses may be large
Problems with paying taxes
Problems with getting credit
Problems with trading across borders
Definition of Investment Appraisals
Measures/calculations that businesses may carry out to see how financially worthwhile a new project or nature might be
Payback
ARR
Discounted cash flow
Reasons why businesses join together
Spreading risk
Entering new markets
Acquiring national/international brand names or patents
Gaining access to intellectual property
Securing resources/supplies
Maintain/increasing competitiveness
Definition of Merger
Two businesses join together to form a permanent new business which brings both of the original businesses together as one
Definition of Joint venture
Two businesses may choose to work together on a particular project
How many global businesses will try and counteract the effect of exchange rates
By using fixed contracts
Definition of low cost leadership
A firms aiming to have the lowest costs in the market
Definition of Differentiation
Firms setting them selves apart from competition
