International Markets

Question 1

What benefits does trading internationally give

Answer 1

1. Increase market size by selling existing products to new countries
2. The bigger the market the higher potential revenue
3. Reduce costs by getting their raw materials from countries with the cheapest price
4. If the UK economy is in recession businesses can secure revenue by exporting to a growing economy

Question 2

Issues with international trade?

Answer 2

1. Businesses have to pay to transport the goods which can be very costly
2. Fluctuation in exchange dates makes the cost of international trade unpredictable, so it’s difficult for business to accurately forecast revenue and profits

Question 3

What is globalisation

Answer 3

When businesses operate in lots of countries all over the world

Question 4

Benefits of SHL marketing abroad as a niche product

Answer 4

Because niche targets a small section of the market, there is only a small pool of potential domestic customers for the product. The only way to increase the pool of potential customers for a niche product is to increase the total size of the market