4.2.1 Conditions that prompt trade Flashcards
What are Push Factors?
They are factors that force a business to seek trade abroad or in a new area.
Push factors are those that force a business to leave the market in which they currently operate to look for new income streams in the future
If a company is in a market that is saturated or declining, What might they do?
They will move business to another country (This is also an extension Stratergy)
When do Saturated Markets occur?
Saturated markets occur when nearly all potential customers already have the product that a business sells, or a close substitute of it
What does competition suggest?
Competition suggests that a business will struggle to survive in markets where other businesses might have a competitive advantage
What are some Examples of PUSH factors?
High degree of rivalry Threat of Substititions Stage of the Company Political influences Social Trends -> Trends away from your product (E.g Nestle) Techonological Trends
What are the 7 M’s of Business influcences?
- Men (Human resources, avalability of labour)
- Materials (Physicall resources, Land or buildings)
- Money (Financial resources, Retained profits, shareholder influence)
- Minutes (Time, Stage on the product lifecycle, first to market)
- Markerting (4 P’s (Product,Price, Promotion, Place) and Brand)
- Micro (Customers, Competators)
- Macro (PESTEL)
What are pull factors?
Pull factors are those that attract a business to a global market
What are some Pull factors?
Economies of scale
Growth
Risk spreading
New Trends for your product in other countries (Culture)
What are some Political Pull Factors?
Less barriers to trade
Access to Trading Blocs
What are some Micro Pull Factors?
Less competition
More Consumers in the new market
What are some Economic Pull Factors?
More discrecinery Income
More disposable income
GDP Growth
What are some Legal Pull factors?
Legislation
