4.2.1 Conditions That Prompt Growth Flashcards
Define push factors
Force a business to consider selling abroad
Examples of push factors
- High levels of domestic competition
- Saturated markets with low growth opportunities
Why is a saturated market a push factor?
Means a business has sold their product to just about everyone who will buy it
Whilst R&D is occurring, the business needs to continue to trade and grow so will look for new markets abroad
Why is high domestic competition a push factor?
Means a business will abroad for less competition and lucrative (profitable) market opportunities to trade
Define pull factors
Force a business to consider selling abroad
Examples of pull factors
- Significant opportunities to sell to overseas markets
- Ability to spread risk across more markets
- EOS
Why are opportunities in overseas markets pull factors?
Exporting can increase sales if demand for your product increases abroad
Selling overseas means faster growth than domestic markets
Why is ability to spread risk a pull factor?
By selling in other countries the business is less vulnerable to changes in the domestic economy
Why is ability to gain EOS a pull factor?
Allows the business to veto e more cost-competitive
