4.3+4.4 Flashcards
What is glocalisation?
The global product and distribution of goods and services which are adapted to reflect and meet local demands.
+ of glocalisation (2)
- can increase sales revenue + profitability
Negative of glocalisation
- requires specialist knowledge of local and national markets which can increase costs
ethnocentrism meaning
where the companies approach does not adapt to local needs; sticking to the business’ domestic practices
Polycentrism meaning
where the companies approach is adapting to local needs
geocentrism meaning
a mixture of the ethnocentric and geocentric approach. the business maintains and promotes he global brand name, but tailors to its products to local markets
ethnocentrism + (1)
- costs are reduced (the business is not adapting to meet the needs of overseas markets)
ethnocentrism - (1)
can result in marketing activities which do not appeal to the target overseas market
e.g if Macdonalds sold pork in UAE ( Islam is the official religion)
geocentrism + (1)
-products are tailored to suit the needs of the local market, so are likely to sell well
geocentrism - (1)
- higher cost of product development
polycentrism + (1)
- can increase market share
- can increase the exploitation of opportunities
polycentrism - (1)
- business costs are increased as marketing approaches are refined to meet the needs of local + national markets
what are the 4 elements of Ansoff’s matrix ?
- market development
- market penetration
- product development
- diversification
market penetration meaning
existing products to existing markets
market development meaning
existing products to new market s
diversification meaning
new products to new markets
product development meaning
new products to existing markets
+ of diversification (2)
- can spread risk, gives business an alternative if the demand for one product declines
- opportunity for market share growth
- of diversification
- new products and new markets means that business will have limited expertise in each (increases risk)
what are the 4 p’s
- product
- place
- price
- promotion
niche market meaning
a small and specialised market where businesses target the specific wants and needs of consumers
what are the 4 main influences that affect global expansion of a business ?
- cultural differences
- tastes
- language barriers
- unintended meanings
how do cultural differences/tastes affect a business considering global expansion ?
- businesses may need to adapt to the cultural differences and tastes of different countries, in order to expand
how do language barriers affect global expansion of businesses? (2)
- businesses may not have the skill and expertise within its trade across different languages
- this may lead to miscommunication/ lack of communication
unintended meanings, how does it affect the global expansion of businesses ? (2)
- inappropriate/ inaccurate branding, translations and promotions can affect the expansion of a business
- a business may need to recognise differences in cultural norms throughout countries it is operated in
what is an MNC ?
A multinational organisation is a business which has production facilities in more than one country.
what are the main variables that affect a businesses decision to enter a country ? (5)
- The political stability
- Local competition
- Size of the market
- Local infrastructure
- Local Resources
what are the main impacts of MNCs on the local economy
- employment
- competitiveness
- the community
-exploitation
how does an MNC affect the employment within the local economy
- they can provide employment (reducing unemployment and providing wages to employees)
how does an MNC affect the competitveness within the local economy
- they may increase competitveness and reduce the number of local businesses
how does an MNC affect the community within the local economy
- they provide goods and services for the local community (depending on the area the community may have not had access to this previously)
how does an MNC affect the exploitation within the local economy (3)
- mncs may exploit poor working conditions which may be legal in foreign countries but illegal in the home market
-cheaper labour costs, and lower costs per unit (could may employees work longer hours)
-may prioritise profit using cost-effective and non-renewable resources harming the environment
impacts of MNCs on the national economy
- FDI
- Balance of payments
- Opportunities
- Economic growth
-Tax revenues
