Global Competiton (section 18)

Question 1

Whats cost competitiveness

Answer 1

This is when a firm has relatively low costs in comparison to their competitors, which allows them to charge lower prices.

Question 2

What’s differentiation

Answer 2

When a product is give unique features to increase its selling price

Question 3

How can movements in exchange rates impact the competitiveness of a business

Answer 3

Exchange rates impact the price of imports and exports of a business between the 2 countries
-Appreciation
-Depreciation

Question 4

Whats appreciation

Answer 4

When one currency rises in value in comparison to another.

Example- £1 = $1.41 to £1 = $4.51 — the pound is worth more in euros

Imports become cheaper and exports become more expensive ( less competitive)

Question 5

Whats depreciation

Answer 5

When the currency falls in value in comparison to another exchange