external influences Flashcards
what is tariff
a tax on an import it usually expressed as a percentage of the imports price
what is an import
goods or services bought from produces overseas
what is an export
goods and services which are produced in one company and sold in another one
what is international trade
the selling of goods and services across the world
what is a mutational business
business with their headquarters in one country but which operate in other countries through their offices, factories and shops. A company which just sells goods abroad is not a multinational company
what are exchange rates
the valises of one country’s currency agains another country currency
what is globalisation
the increased interdependency of people around the world as a result of increased trade of cultural exchange. it has lead to an increased world wide production of goods and services
what is the definition of inward investment
occurs when governments, businesses and individuals invest capital into another country - for example, building new factories or buying countries
what are the advantages of selling abroad / international trade
bigger market / increase brand awareness - more potential customers in an international market which leads to higher sales and greater profits
economies of scale - purchasing / bulk buying and marketing which reduced average costs to generate more profit from sales
wider range of customers / various market segments - greater spreading of risks. low sales / downturn in one segment can be compensated by sales of others
exchange rate fluctuation may benefit in the rise if the value of GBP
what are the disadvantages of international trade
higher transport costs - productions may be sent over greater distance / longer time which can have a negative impact on profits
other transport problems - such as a alibi tory of the mode / weather / strikes at ports can restrict distribution
language problems in trading - for handbooks / marketing. translation costs of actual products (magazines, catalogues,etc)
currency conversion / exchange rate fluctuations - may increase costs
cost of different laws / customs - e.g. following environmental laws
lack of knowledge of foreign markets - demands / tastes
problems of getting paid - more difficult to resolve over distance
trade barriers - embargoes / quota
political factors - wars / conflicts /external events
competition from foreign firms established abroad
what are the opportunities of globalisation
ability to enter new markets
use resources available abroad
benefits from cheaper production locations
what are the threats of globalisation
increased competition
theft of intellectual property
loss of talented workers
how can turn over. be improved
increase price - make more revenue per item sold
reduce price - may create demand / selma more goods to increase total revenue
increase promotion / advertising - may attract more customers / sales
