4.2.5 Global Competitiveness

Question 1

Global competitiveness

Answer 1

Is the ability of firms in an economy to match the price and quality of other nations output

Question 2

Main factors affecting competitiveness

Answer 2

Price and quality of domestic goods and services to relative foreign products

Question 3

Factors that influence the relative price of imports and exports

Answer 3

• relative costs of production
• relative productivity of labour
• exchange rates impact on the price of imports and exports

Question 4

Exchange rates

Answer 4

When the price of one currency expressed in terms of another currency

Question 5

What happens when the pound appreciates

Answer 5

The UK exports to other countries will be more expensive

Question 6

What happens if the pound depreciated

Answer 6

UK exports will be less expensive

Question 7

How do exchange rates affect a business

Answer 7

• price of exports in international market, costs of good brought from overseas, revenues and profits event overseas, connecting cash results from countries overseas

Question 8

Skill shortage

Answer 8

Is when there is a lack of skilled workers in the industry

Question 9

Why is skill shortage a problem

Answer 9

High demand is outstripping supply, producing imbalance for economy, being replaced by machinery, increases labour costs, leading to reduced creative output

Question 10

2 ways MNC can secure competitive adv

Answer 10

Minimise costs, differentiation

Question 11

4 categories of porters three generic strategies

Answer 11

Cost leadership, differentiation, cost focus, differentiation focus

Question 12

How can differentiation be achieved

Answer 12

Distinctive design, branding, performance,

Question 13

Why is differentiation important

Answer 13

So that customers perceive greater advantage