4.7 Political Factors which impact on Business operation in global markets and legal systems

Question 1

Big Question

Answer 1

How does politics affect businesses

Question 2

what does political factors have an imapct on

Answer 2

• how businesses operate and
• whether they choose to enter or stay in a foreign market.

Question 3

examples of Political factors that influence Business

Answer 3

• government policies,
• political stability,
• trade regulations,
• tax policies, and
• international relations.

Question 4

Political factors which impact on business operation in global markets, including: 

Answer 4

1. Stability of foreign governments  **
   2. Relationship of foreign governments with the Australian Government  **

Question 5

Define Political stbility

Answer 5

The condition in which a governmet operates without significant disruption or violent upheaval ,maintaning consistent policie and functioning institutions

Question 6

Political factors affecting business

Answer 6

1.Stability of government
2.the relationship of the foreign government with the Aus Gov
3.Gov legislations and polices ,particularly with regard to product requirements or protectonist measures

Question 7

when Planning Business Growth ,companies should consider what?

Answer 7

the political environment in the foreign markert

Question 8

Lack of political stability affects Business operations in countries such as …. .

Answer 8

1. Manufacturing
2. Supply chains and distribution
3. Packaging
4. Selling of goods and services
5. Pricing Stability

Politically unstable countries may have riots, protests, looting and general disorder which causes the above stuff

Question 9

key summary of politcal stability in a country

Answer 9

• Lack of political **stability in a country impacts business’ ability to operate. 
  **
• **Unstable countries may experience unrest and general disorder.  **
• **Frequent changes in government means that business does not have clear laws and regulations they must comply with. 
  **
  **- Instability is often a product of poverty, corruption and warfare, which creates an environment that does not support business.  **

Question 10

image on examples of political instability

Answer 10

Question 11

what happens during a period of Low POLITICAL INSTABILITY

Answer 11

• Inflation Rates are very stabel
• GDP Experiences growth
• Foreign Direct investment is relatively stable

Question 12

During a period of High political Instability what happens to an economy?

Answer 12

• Inflation rates skyrocket
• GDP contracts due to economic mismanagement and failling oil production
• Foreign Investment declines as investors flee from the unstable environment

Question 13

what are the results of an economy increasing their political stability and questions to ask when considering expansion into a foreign market.

Answer 13

• How stable is the government?
• How drastically will the rules for business change, if a new party comes into power? 
• Is there a constitution and clear structure for government? 
• How transparent is the government’s decision-making process?

Question 14

Political instability summary

Answer 14

Businesses operating in foreign markets are at the mercy of complex government stability factors, and can be placed in compromising positions if there are sudden changes to the political stability of a region. Businesses must consider the degree of risk (e.g. high and low risk markets) before entering a foreign market.

Question 15

Define international relations

Answer 15

The interactions and relationships between countries ,including diplomacy ,trade,and conflict resolution.

Question 16

TIP on discussing of international relations

Answer 16

You could talk about good relations and negative relationships between foreign relations

Question 17

Economic restrictions that may be placed on trade:

Answer 17

• Tariffs-a gov may impose higer tariffs on imports from the other country to make the goods expensive and** less competitive in the domestic market.**
• Sanctions -A gov can induce sanctions to** reduce trade,investment and financial transactions with the other country**.Also **limits &prevents foreign business from trading with their market and exercise Political pressure **
• Export controls -A gov might restrict the critical goods ,tech or resources to the country.This is Political pressure to foreign market to encourage them to take action that will benefit the domestic market.Hindering thetargeted country’s acces to esse

This one is big needs time but got this

Bascically political pressure is the main key point here think about zim sanctions that a implemented by America
These lead to decreased tradeand economic strain on a country’s industries

Question 18

The positive side of” Relationship of foreign governments with the Australian Government ”

Answer 18

1. Free trade agreements -They make trade easier between countries and are more likey to be agreed with countries that have good relationships
2. Providing foreign to developing countries can create trade partners in future ,when their economy and standard of living improves

Question 19

impact of legal systems on business operation in global markets -““differences regarding competition regulation “

Answer 19

• patent registrations(what will protect me
• product liability(comply with

Question 20

Define Competition Regulation

Answer 20

legislation that restricts, controls or manages the level of competition within a market

IT’s a process that makes sure there is healthy competition

Question 21

If Intellectul property is protected

Answer 21

no Competitors can imitate the product and take sale/market share from the business, as they cannot compete directly with your product or services. An important tool for IP protection are patents. 

Question 21

patent Registrations

Answer 21

** Registered documentation that is designed to protect an invention, system, process or unique asset of a business, preventing direct imitation**

A healthy market protects competitve advantage

Question 22

What’s the next step after a patent registration

Answer 22

legal frameworks
such as
1.Legality of contacting infringing business as well as the permitted legal actions in civil lawsuits between companies .
2. Furthermore, additional layers of protection or risk come from the level of court that hears disputes, as well as specialist training and experience of judges who hear patent dispute cases.

Question 23

define product liability

Answer 23

“Laws which refer to the set of rules concerning who is responsible for **dangerous or deffective products sold in the market’
**

Operating in different countries with different laws and regulations makes managing product liability risk complex.

Question 24

When managing product liability, the different policies and regulations in all the countries where a business operates must be considered

Answer 24

Product liability risk: 

1.Fines and penalties for breaching laws and regulations

2.Civil damages from losing cases

3.Boycotts and negative social media campaigns 

4.Costly court actions 

5.Product recalls 

6.Loss of market share 

7.Loss of sales 

8.Damage to the business’ public image in the event of a product failure. 

Liability is a risk to a business as it can cause financial strain on a business

Question 25

A business can be held liable for a faulty or dangerous product in one of three ways: 

Answer 25

Negligence: a business fails to take reasonable care to manufacture, supply and sell a safe product or provide adequate warnings and instructions. 

Strict liability: harm or injury is caused by using the product. 

Breach of warranty: does not meet the legal requirement of being fit and suitable for its purpose. 

Question 25

what can help a business to maintain liability?

Answer 25

Product insurance protects you in case a product causes harm to a customer, their property or the environment. Insurance is recommended for every business that manufactures a product. 

   The level of insurance required depends on: 

How likely it is for the product to cause harm 

The severity of the harm that it could cause 

Question 25

liabiity in prodcuts can include

Answer 25

defects and manufacturing defects.