ASEAN Flashcards
what does ASEAN stand for
associations of south east Asia
what is ASEAN
it was established in 1967 in Bangkok
including countries such as
singapore, malaysia, indonesia, phillipeans, thailand
and have 10 countries
with a potential 600 customers
What are the disadvantages of ASEAN 2
- Chinese firms can export goods at a low cost, which can increase the carbon footprint as the transport costs are Hugh
-increased dominance in the markets, force UK businesses to change their practices and compete in the price wars
What are som advantages of ASEAN 3
Increases economic growth- us knowledge to decrease unemployment and increase disposable income
-large markets- China has a large population meaning the The Uk has a large market to export goods
-cheaper materials- raw materials from ASEAN may be cheaper due to low production costs
whsts the purpose and aims of ASEAN 3
- create free trade bloc of 10 countries. there will be few if any restrictions on trade between members which encourages trade between them
-aim to increase their exports to other countries and to attract FDI into their economies… accelerate their economic growth and the standard of living for each nation
-they can collaborate for greater agriculture and industries, to help improve the facilities of their people
whats the challenges for UK organisations of trading with ASEAN 4
-increased competition from organisation in ASEAN- uk businesses may have to lower prices to remain competitive… reduction in profit and less appealing to potential shareholders
-distance from suppliers in ASEAN- transport costs increase- increase CO2 emission, bad reputation
-ASEAN remains very diverse in terms of religion and culture. UK organisations need to be aware of local prefrences and cultural sensitivities, apadpt marketing to meet local needs
-13 official language in ASEAN which can create communication difficulties between countries- UK organisations may have employ local agents to liase with local companies
-
whats the benefits for UK organisations of trading with ASEAN 6
- ASEAN has a potential market of 600 million. this leads to increased sale profit and more dividends to shareholders
-UK firms can take advantages of lower labour costs in Asian countries . increase competitiveness and can invest elsewhere
-there is a large number of raw materials available to access in ASEAN countries such as oil, gas, palm oil and rubber which can be exported quickly. less expenditure
-ability to spread the risk eg companies can raise capital in Singapore and set up factories in low cost locations such as vietnam
-ASEAN and Chinese organisations have been investing/buying in UK businesses, which may keep struggling UK companies stable.(1)
furthermore, local suppliers to these businesses have regular customs
- there is potential subsidies from the UK gov to UK businesses, in response to increased competition from ASEAN companies