4.2.1 Conditions that prompt growth Flashcards
What are Push Factors?
Are adverse factors in the existing market that encourage an organisation to seek international opportunities. They force a business to seek overseas markets in which to sell their products.
What is a saturated Market
A saturated Market is one where most of the customers who would buy a particular product already have it, or there is limited remaining opportunity for growth in sales.
What is a pull factor?
entice firms into new markets. They are the opportunities that businesses can take advantage of when selling into overseas markets.
Why would competition prompt growth?
A rise in competitors or a high level of competition in the domestic market may force a business to sell abroad
Economies of scale
Increasing the scale of production leads to a lower cost per unit of output. Increasing size or speed increases efficiency and lower costs
Labour productivity
The amount of goods and services produced by one hour of labour
What is off-shoring
Shifting jobs to other countries
What is outsourcing
Shifting jobs to other organisations
What is product life cycle
The stages that many products go through: development; introduction; growth ; maturity ;decline.
What is risk
The probability of a (bad) event happening multiplied by its (negative) impact.
What is saturation
The point when most of the customers who want to buy a product already have it , or there is limited remaining opportunity for growth in sales.
Why will competition prompt trade?
A rise in competitors or a high level of competition in domestic market. May force a business to sell abroad. Competitors could be selling similar products at a lower price or a higher quality which may make selling the original product, difficult or unprofitable.
example of pull factors?
-New or bigger markets
-Lower costs or secure resources, such as minerals, land, or labour
-Lower cost of transportation
-Assets, such as brands, patents, or other intellectual property.
Why might a firm off shore?
- reduce costs
- hire workers with particular skills
Why might a firm outsource?
- reduce costs
- specialise areas of the business
- to focus on the core competences of the business rather than the support functions
- in order to improve speed , flexibility or quality - Comply with rules or regulations
