4.2.1 Conditions That Prompt Trade

Question 1

why might a business want to trade internationally

Answer 1

• selling its products overseas
• obtaining raw materials
• moving production
• extend the product lifecycle

Question 2

what are push factors

Answer 2

• factors that motivate a firm to move into a foreign country
• they are negative factors in their domestic or current market

Question 3

list possible push factors

Answer 3

• saturated market with little opportunity for growth
• high competition reducing sales

Question 4

what are pull factors

Answer 4

• factors that makes it attractive for a business to move abroad
• they are positive factors about an overseas market

Question 5

list possible pull factors

Answer 5

• potential for growth
• lower costs
• spreading risks
• availability of skilled staff

Question 6

what is offshoring

Answer 6

• moving a part of the business to another country

Question 7

evaluate offshoring

Answer 7

+ reduces costs
- reduces the brand image
- risk of having to reshore

Question 8

what is reshoring and why do businesses do it

Answer 8

• when a business moves departments back to its country of origin
• may be because of backlash or to improve quality of department