4.2.1 Conditions that prompt trade

Question 1

What type of factors prompt trade?

2

Answer 1

• Push factors (drive firm away from dom market)

- Pull factors (attract business to new foreign market)

Question 2

Examples of push factors?

7

Answer 2

• Saturated markets
• Extension strategy (product life cycle)
• Gov failure or regulations
• Natural disasters
• Changes in F/T/P in dom market
• ^Incomes or >
• Changing demographic

Question 3

Examples of pull factors?

4

Answer 3

• EOS
• Possibility of offshoring/outsourcing
• Risk spreading (diversifying market)
• Resources

Question 4

What is outsourcing?

1

Answer 4

• Contracting another business to perform a firm function on your behalf (>cost country)