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Business EL > Assessing Internationalisation - 3.93 > Flashcards

Assessing Internationalisation - 3.93 Flashcards

1
Q

What is globalisation

A

The processes of increased interconnectedness and integration of economies, cultures and societies worldwide

Facilitated by technology, communication and trade

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2
Q

Reasons for globalisation

A

Improvements in internet and mobile communications

Freedom of trade promoted by World trade organisations

Improvements in transport through container ships, speed and time taken

Low laybour costs and less regulation in emerging countries

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3
Q

What has globalisation involved

A

Greater free trade
Greater movement of laybour
Increased capital flows
The growth of multi-national companies
Increased integration of global trade cycle
Increased communication and improved transport, effecively reducing barriers between countries

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4
Q

Benefits of globalisation

A

Lower prices/ greater choice
Economies of scale - lower prices
Increased global investment
Free movement of laybour

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5
Q

Benefits of globalisation

A

Lower prices/ greater choice
Economies of scale - lower prices
Increased global investment
Free movement of laybour

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6
Q

Costs of globalisation

A

Structural unemployment
Environmental costs
Tax competition and avoidance
Taking skills form countries
Cultural diversity

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7
Q

What ways can a business operate internationally

A

Merge into another company in country
Joint Venture
Exporting goods
Open up branch in country

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8
Q

Why would a business want to target on international market?

A

Increase brand recognition
Widen customer base
Remain competitive
Find a gap in the market
Increase sales
Might have lower costs
Increase Market share
Spreading risk
Take advantage of economies of scale
Boosting profitability
Developing market knowledge and expertise

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9
Q

What factors influence the attractiveness of internacional markets

A
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10
Q

What is Internationalisation?

A

The process of adapting products or services to meet the needs of international markets.

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11
Q

What is Export?

A

Goods or services produced in one country that are sold in another.

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12
Q

What are some examples of exports?

A

Examples include Land Rover, Rolls Royce, and Jaguar.

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13
Q

What are the advantages of internationalisation?

A
  1. Attracts a large customer base
  2. Expands market reach
  3. Reduces costs
  4. Competitive advantage
  5. Economies of scale
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14
Q

What are the disadvantages of internationalisation?

A
  1. High competition
  2. Difficult to control/manage
  3. Susceptible to exchange rate fluctuations
  4. Incurs transport costs
  5. Requires knowledge of local markets
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15
Q

What is Licensing?

A

The process of allowing another party to use a company’s technology, brand, or expertise for a fee.

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16
Q

Define alliances

A

Agreements between two or more companies to combine their strengths and expertise for a specific project

17
Q

Define direct investment

A

The taking of a controlling ownership of ownership in one country by a company based in another country based in another.

Can be through organic/ inorganic growth

18
Q

What is offshoring

A

Involves the relocation of business activities from the home country to a different international location

19
Q

What is reshoring

A

Business returning production or operations to the host country that had previously been moved to a different international location

20
Q

What is multinational

A

organisations that have production basses in more then one country

21
Q

What factors influences the attractiveness of international markets

A

Tax
exchange rates
competition
type of consumers

22
Q

What are the advantages and disadvantages offshoring?

A

Advantages
Cheaper
low labor costs
gov. incentives

Disadvantages
Initial high costs
high risk
communication issues

23
Q

Define exporting

A

Goods or services produced in one country are sold in another

24
Q

Why do businesses want to operate in international markets?

A

Reach more customers
Greater market share

25
Q

Examples of business that operate at home country

A

Aston martin
Brompton folding bicycles

26
Q

Examples of businesses that operate away

A

HP saucee
Clarks

27
Q

Why are emerging economies an oppourtunity for businesses

A

increased incomes = more disposable income= sell more products

28
Q

What is an emerging economy

A

a country which is becoming more developed-

29
Q

Why are emerging economies a threat for businesses

A

Costs of laybour/ raw materials increase = threat for business

Increased competition

increased risk of intellectual property theft, restrictions on the methods of doing business and competitive challenges

30
Q

What challenges did McDonalds face when entering the Indian Market

A

Nearly half of Indians are vegetarian

Eating out not common

Price consicous market

Lots of local competition- street foods

31
Q

How did McDonalds combat these challanges

A

McDonalds promised that there would be no beef or pork

Wide range of veggie options

32
Q

Why was it good idea for McDonalds to target India?

A

1.2 Billion population- and incomes are rising

33
Q

Why was it a bad idea for McDonalds to target India

A

diffiicult culturally
takeaway is less common

34
Q

Pressures for local responsiveness VS pressures for cost reduction

A

Responsive’s- comes from differences in consumer tastes, gov. demands

cost reduction- competitive global markets- pressures to reduce costs

35
Q

QUESTION PLAN

“To what extent do you agree that all businesses that moved manufacturing abroad should now move production back to the UK”

A

Reshoring- returning production back to home country

Gain back control
rectify quality issues
improve brand regulation
reduction in lead time

Offshoring- Is a business returning production or preparations from home country to different international locations

Low laybour costs
gov.incentives

Initial high costs
high risk
communication issues

36
Q

Question plan

To what extent do you agree that cost reduction is more important than local responsiveness for multi-national businesses?

A

Business EL (7 decks)

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