conditions that prompt trade - pull factors

Question 1

define pull factors

Answer 1

Attractive features of an overseas market (emerging markets)
e.g. Jaguar Land Rover moving into the Chinese market

Question 2

what are the reasons for moving overseas?

Answer 2

• significant sales opportunities
• eos
• exploit competitive advantages in new markets
• risk spreading

Question 3

explain eos

Answer 3

• Opportunity to gain EOS by expanding overseas
  Centralised production – huge purchasing eos
  Cheaper wages – lower average costs
  Lower tax, fewer regulations

Question 4

explain the opportunity to exploit competitive advantages in new markets

Answer 4

i.e. reputation, quality, lack of existing rival

Question 5

explain risk spreading

Answer 5

reduces overdependence on sales in a domestic market by moving to expand markets