4.2.5 global competitiveness

Question 1

impact of movement in exchange rates on international business

Answer 1

appreciating £ against other currencies = uk exports to other countries will be more expensive.
depreciating £ = uk exports will be cheaper

Question 2

depreciation impacts on businesses

Answer 2

depreciating £ against other currencies = cheaper exports to those countries.
business imports in a depreciation = dearer imports.
if the imports are raw materials to make other products, they will cost more to make

Question 3

what does the effect of the exchange rate depend on

Answer 3

inflation
recession
PED
raw materials
competition

Question 4

inflation

Answer 4

depreciation can cause inflation and this will lead to uncertainty in business

Question 5

recession

Answer 5

a weak £ is great for exports at lower prices.
recession in the country buying the goods means demand will be slow

Question 6

PED

Answer 6

goods that are price inelastic, the lower price due to weak pound doesnt affect demand

Question 7

raw materials

Answer 7

effect of appreciation or depreciation depends on how many raw materials the business buys

Question 8

competition

Answer 8

effect of appreciation or depreciation depends on how competitive the market is that the business trades in

Question 9

competitive advantage

Answer 9

an advantage over competitors gained by offering consumers greater value. either by means of lower prices or by providing greater benefits and service that justifies higher prices.

Question 10

porters generic strategies matrix

Answer 10

cost leadership
differentiation
cost focus
differentiation focus

Question 11

low cost leadership

Answer 11

businesses seek to produce the same quality products as its competitors at a lower price.
typically mass produced items.
large businesses benefit for the largest reduction in average costs and EOS

Question 12

ways to gain cost leadership

Answer 12

good resources management
outsourcing / offshoring
efficient production methods
waste minimisation
raising productivity

Question 13

differentiation

Answer 13

businesses produce unique products or give a unique service.
having a uniqueness = charging premium prices

Question 14

attributes to differ a product

Answer 14

performance
style
design
consistency
reliability
durability
reparability

Question 15

skills shortages

Answer 15

a lack of workers with the right qualifications in the industry.
occurs due to short-termist thinking from governments and private sector.
following a differentiation strategy makes a business more vulnerable to skills shortages

Question 16

how can businesses overcome skills shortages?

Answer 16

offer better education through government schemes, grants or incentives.
businesses can poach employees from their competitors