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AQA A level Business > A2 Part 1 - Analysing the Strategic Position of a Business - Political and Legal Change > Flashcards

A2 Part 1 - Analysing the Strategic Position of a Business - Political and Legal Change Flashcards

1
Q

What are competition laws?

A

Laws that promote or seeks to maintain market competition by regulating anti-competitive conduct by companies

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2
Q

What are employment laws?

A

Laws relating to the rights and responsibilities of workers

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3
Q

What is environmental legislation?

A

Aim to protect the environment from harmful actions by companies

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4
Q

What is infrastructure?

A

The basic physical and organisational structures and facilities needed for the operation of a society or enterprise.

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5
Q

What is GDP?

A

Gross Domestic Product. Measures the value of goods and services produced in an entire economy over a period of time

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6
Q

What is a recession?

A

Negative growth in 2 consecutive quarters

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7
Q

What is taxation?

A

Money paid to the government to fund their spending

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8
Q

What is an exchange rate?

A

The price of buying one currency against another

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9
Q

What is inflation?

A

A sustained rise in the average level of prices over a period of time

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10
Q

What is the Consumer Price Index?

A

A technique used by the government where they take a typical basket of goods to measure their price each calendar month. The prices are then compared with the same calendar year in the previous year to give an annual inflation rate.

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11
Q

What is deflation?

A

Reduction in general level of prices in an economy

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12
Q

What is Fiscal policy?

A

Means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy

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13
Q

What is Monetary policy?

A

Bank of England (central bank) controlling the supply of money in a country. It does this by controlling interest rates

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14
Q

What are interest rates?

A

The price of borrowing money

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15
Q

What is austerity?

A

Difficult economic conditions created by government measures to reduce public expenditure

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16
Q

What negative effects can high inflation have on businesses?

A
  • Negativley effectws currency exchange rates
  • Export slump
  • Rising prices in the UK makes goods and services uncompetitive on a global scale
  • High inflation in the UK may persuade some businesses to move location to other countries
    • Increased unemployment and reduced consumer confidence
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17
Q

What effect can expansionary fiscal policies have on businesses?

A

Increased government spending means more opportunities for businesses

E.g. new road building programme creates demand for construction companies

18
Q

Why may higher interest rates be good for a business?

A

It can often be a good time to borrow money because when the time comes to repay the loans the payment should be less

19
Q

What is protectionism?

A

Any attempt to impose restrictions on trade in goods and services. Countries opting to impose restrictions on foreign imports.

20
Q

What are tariffs?

A

A tax or duty that raises the price of imported goods and services and causes the level of imports in a country to fall

21
Q

What are quotas?

A

Quantitiative limits on the level of imports allowed or a limit of the value of of imports permitted into a country in a given period

22
Q

What are intellectual property laws?

A

Rules for securing and enforcing legal rights to inventions, designs and legal works

23
Q

What are technical barriers to trade?

A

Increasing product compliance costs and imposing monitoring costs on exports agencies

24
Q

What are export subsidies?

A

A payment to encourage domestic production by lowering their costs

25
Q

What are domestic subsidies?

A

Government help for domestic companies facing financial problems

26
Q

What is import licensing?

A

Government grants importers the license to import goods

27
Q

What is free trade?

A

Countries agree to not impose tariffs, quotas or other restrictions on each other

28
Q

What are trading blocs?

A

Groups of countries have arranged themselves into trading blocs where all have agreed to free trade

29
Q

What is a soft BREXIT?

A

Staying in a single market but leaving the EU

30
Q

What is a hard BREXIT?

A

Leaving the EU and single market completley

31
Q

What is globalisation?

A

The increased degree of integration between international economies

32
Q

What is an emerging economy?

A

A country in the process of rapid economic growth or industrialsation

33
Q

What are the causes of globalisation?

A
  • Improved transport
  • Containerisation
  • Technology
  • Global brands
  • Trading blocs
  • World Trade Organisation
  • Economies of scale
  • Growth of global media
  • Global trade cycle
  • Financial system
  • Improved mobility of capital
  • Increased mobility of labour
34
Q

What are the features of emerging markets?

A
  • Economies making a transition
  • Rapid industrialisation
  • Have potential to become developed economies
  • Faster long-term economic growth than most developed economies
  • Many inhabitants still in poverty
  • Businesses struggle to access global markets
35
Q

What are threats from emerging markets?

A
  • Increasingly large pool of skilled, but low cost labour
  • Undervalued currencies make their exports cheaper
  • Inadequate protection of brand and other intellectual property
  • State subsidy of industries to make them more competitve globally
36
Q

What are the opportunities from emerging markets?

A
  • Growing number of educated middle class consumers = growing consumer spending
  • Cultural shifts
  • Demand for infrastructure and other goods from developed economies
  • Source of high skilled but low cost labour
  • Great potential for joint ventures and acquisitions
37
Q

What are the key risks of entering an emerging markets?

A
  • Political instability
  • Cultural differences/sensitivities
  • Variable approaches to financial and legal dealings
  • Corruption and bureacracy still an issue
38
Q

Why do businesses increasingly operate overseas?

A
  • Grow revenues directly (exporting)
  • Moving production overseas to enable faster lead times to customers and reduce costs
39
Q

What are the attractions of international markets?

A
  • Stronger economic growth
  • Market saturation and maturity in domestic markets
  • Easier to reach international customers using e-commerce
  • Shareholder pressure to increase revenues and profits through international expansion
40
Q

What is urbanisation?

A

The mass movement of people from rural areas to towns and cities

41
Q

What are the advantages of exporting direct?

A
  • Using existing systems
  • Online promotion makes this cost effective
  • Can choose which orders to accept
  • Direct customer relationship established
  • Entire profit margin remains with the business
  • Can choose basis of payment e.g. currency
42
Q

What are the disadvantages of exporting direct?

A
  • Potentially bureacratic - excessivley problematic administrative process
  • No direct

AQA A level Business (10 decks)

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