4.2.5 Global Competitiveness Flashcards
What are Barriers to entry?
Factors that make it difficult for a company to enter an industry or type of business and compete effectively. These can include incumbents’ high capital investment and strong economies of scale, restrictive government policies and labour unions.
What is a competitive advantage?
The advantage one company has over another, or several others, in the provision of a particular product or service. For instance, a carmaker may have a competitive advantage because its cars break down less often- in other words a higher quality., even though they may be more expensive.
What is cost competitiveness?
Acquiring ever-increasing economies of scale, a company creates the cheapest product on the market.
What is cost leadership?
A concept developed by Michael Porter. Used in business strategy. It describes a way to establish the competitive advantages and essentially means the lowest cost of operation in the industry.
What is differentiation?
Rather than focusing on costs, differentiation is when a firm selects certain attributes of its products or services and tries to match these with specific customers. The business may then try to command a higher price for creating this differentiated product.
What is economic risk?
Risk that future cash flows will change due to unexpected exchange rate changes.
What is global competitiveness?
The extent to which a business or a geographical areas such as a country can compete successfully against rivals.
What are skill shortages?
Where potential employees do not have the skills demanded by employers.
