Impact Of Liberalisation On Businesses/MNCs

Question 1

Define WTO

Answer 1

Encourages countries to reduce their trade barriers

- lower tariffs mean EXPORT OPPORTUNITIES

Question 2

Export opportunities 1

Answer 2

Chindia’s growth
Rising incomes
Rising middle class
Increased EXPORT OPPs

Question 3

Export opportunities 2

Answer 3

EU Enlargement
Barriers to trade removed 
Reduces costs to trade
Increased EXPORT OPPS
(Free to move Labour)

Question 4

application

Answer 4

Luxury businesses that will benefit

Eg Brompton bikes

Question 5

Analysis

Answer 5

Reasons to enter international market
AND
Increased EOS - lower prices or higher profits margins

Question 6

Evaluation

Answer 6

increased competition from new markets
Which companies affected/not?
Low cost may suffer
Differentiators will gain

Question 7

Judgment

Answer 7

• S/T low cost competition is threat but they may seek to moved up value chain to innovation and design
• some unaffected (hairdressers)

Question 8

Define Trade Liberalisation

Answer 8

Reducing barriers to trade so economies can gradually move closer to free trade