Global markets & buisness expansion

Question 1

What are push factors?

Answer 1

Push factors are adverse factors in the existing market that encourage an organisation to seek international opportunities.

Question 2

What are pull factors?

Answer 2

Pull factors entice firms into new markets. They are the opportunities that firms can take advantage of when selling into overseas markets.

Question 3

What are two examples of push factors?

Answer 3

1= Saturated markets
2= Strong competiton

Question 4

A _________ market is one where most of the customers who would buy a particular product _______ ____ __, or there is limited remaining ______ __________. This may be a _____ factor into _____________ markets.

Answer 4

saturated
already have it
growth opportunity
push
international

Question 5

Businesses may be forced to sell abroad due to __________. This could happen if ______ are offering a lower ______ or better ______. If a firm fails to ___________, they will be forced to look elsewhere, which may need product ____________ to meet the _______ of new customers.

Answer 5

competiton
rivals
price
quality
differentiate
adjustments
tastes

Question 6

What is the largest pull factor?

Answer 6

Economies of scale allows a firm to reduce their cost per unit and widen their profit margins.

Question 7

Off-shoring involves moving _______________ or service industries to a location with _____ ______. A firm may do this to lower their costs by accessing cheaper _______ ________, or to hire workers with particular _____.

Answer 7

manufacturing
lower costs
labour markets
skills

Question 8

What is the drawback of offshoring?

Answer 8

Off-shoring can damage a firm’s reputation by removing jobs from the home market, and is not always successful as it can actually lead to increased costs if efficiency is worse.

Question 9

What are some factors that should assess if a country is good as a market?

Answer 9

1= Disposable income
2= Ease of doing business
3= Infrastructure

Question 10

What are the three key areas in which factors affecting a country as a production location are placed into?

Answer 10

1= Costs
2= Risks
3= Conditions

Question 11

Choosing a location which has low ____________ _____ can help a firm to gain a __________ ___________ over ______. In some parts of the world, some of the main production costs, such as l________, e_______, _r___ m________ and l____ are much ________.

Answer 11

production costs
competitive advantage
rivals
labour
energy
raw materials
land
cheaper

Question 12

Low _____ _____ will also be an important factor for businesses which employ a large _______ _____. However, they must ensure that these workers are __________ as well as cheap, so they will seek ________ ____________ over labour costs.

Answer 12

wage costs
labour force
productive
labour productivity

Question 13

Would a country being located inside a trading bloc be a positive or negative thing for a business when choosing a production location?

Answer 13

Positive, as it allows a business to avoid trade barriers, such as tariffs and quotas.

Question 14

What government incentives may be offered to a business in order for them to set up a production location?

Answer 14

1= Tax breaks
2= Interest-free loans

Question 15

How does natural resources play a role in choosing a production location?

Answer 15

Some businesses require large amounts of natural resources. For example, mining companies can only choose locations where these deposits exist. Businesses using natural resources in production are likely to set up near the source.

Question 16

What are some factors affecting whether a country is going to be a good production location?

Answer 16

1= Production costs
2= Infrastructure
3= Location in a trading bloc
4= Government incentives
5= Ease of doing business
6= Political stablility
7= Natural resources
8= Likely return on investment

Question 17

How can global mergers help to diversify risk?

Answer 17

Firms can try to insulate from economic downturns by locating in markets where these risks are less likely to occur.

Question 18

By purchasing a firm with a strong ______ _____, it can obtain both _______ and _________ at the same time. However, it is very easy for a brand name to be ____________ if care is not taken post-merger to ensure _________ _______ and __________ __________ is looked after.

Answer 18

brand name
growth
recodnition
destroyed
employee morale
customer satisfaction

Question 19

What are some of the benefits to businesses of global mergers?

Answer 19

1= Spreads risk
2= Short-cuts growth
3= Aquire brand names
4= Aquiring intellectual property
5= Securing resources
6= Global competitiveness