Global markets and business expansion Flashcards
What are the push and pull factors which prompt trade?
Push: - saturated markets - competition Pull: - economies of scale - risk spreading
What are push and pull factors?
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
What is off shoring?
To shift jobs to other countries
What is outsourcing?
To shift jobs to other organisations
How might a business extend the product life cycle in multiple markets?
- move production to new markets to reduce costs = increases margins
- sell in new markets = introductory stage = extends cycle
What factors should a business consider when assessing a country as a market?
- Level and growth of disposable income
- ease of doing business
- infrastructure
- political stability
- exchange rates
What factors should a business consider when assessing a country as a production location?
- 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
Why might a business choose to merge or joint venture globally?
- spread risk over different countries / regions
- enter new markets / trading blocs
- acquire national / international brand names
- securing resources / supplies
- maintain global competitiveness
What is competitive advantage?
The advantage a company has over another in the provision of a particular product or service
What is skill shortages?
Where potential employees don’t have the skills demanded by employers