Global markets and business expansion

Question 1

What are the push and pull factors which prompt trade?

Answer 1

Push: 
- saturated markets
- competition 
Pull: 
- economies of scale
- risk spreading

Question 2

What are push and pull factors?

Answer 2

Push factors are factors existing in markets that encourages an organisation to seek international opportunities.
Push factors are factors existing in markets that encourage an organisation to seek international opportunities

Question 3

What is off shoring?

Answer 3

To shift jobs to other countries

Question 4

What is outsourcing?

Answer 4

To shift jobs to other organisations

Question 5

How might a business extend the product life cycle in multiple markets?

Answer 5

1. move production to new markets to reduce costs = increases margins
2. sell in new markets = introductory stage = extends cycle

Question 6

What factors should a business consider when assessing a country as a market?

Answer 6

• Level and growth of disposable income
• ease of doing business
• infrastructure
• political stability
• exchange rates

Question 7

What factors should a business consider when assessing a country as a production location?

Answer 7

• cost of production
• skills and availability of labour force
• infrastructure
• location in trading bloc
• government incentives
• ease of doing business
• political stability
• natural resources
• likely return on investment

Question 8

Why might a business choose to merge or joint venture globally?

Answer 8

• spread risk over different countries / regions
• enter new markets / trading blocs
• acquire national / international brand names
• securing resources / supplies
• maintain global competitiveness

Question 9

What is competitive advantage?

Answer 9

The advantage a company has over another in the provision of a particular product or service

Question 10

What is skill shortages?

Answer 10

Where potential employees don’t have the skills demanded by employers