key terms 4.2- Global markets and business expansion

Question 1

what are economies of scale?

Answer 1

increasing the scale of production leads to a lower cost per unit of output

Question 2

what is labour productivity?

Answer 2

the amount of goods and service produced by lone hour in labour

Question 3

what is off-shoring?

Answer 3

shifting jobs to other countries

Question 4

what is outsourcing?

Answer 4

shifting jobs to other organisations

Question 5

what is the product life cycle?

Answer 5

the stages that many products go through

1-development 2-introduction 3-growth 4-maturity 5-decline

Question 6

what are pull factors?

Answer 6

factors that entice firms into new markets and are the opportunities that businesses can take advantages of when selling into overseas markets

Question 7

what are push factors?

Answer 7

factors in the existing market that encourage an organisation to seek international opportunities

Question 8

what is risk?

Answer 8

the probability of a bad event happening multiplied by its negative impact

Question 9

what is saturation?

Answer 9

the point when most of the customers who want to buy a product already have it or there is the limited remaining opportunity for growth in sales

Question 10

what is disposable income?

Answer 10

the amount of money that a person has left over after they have paid their taxes, national insurance and other deductions

Question 11

what is an exchange rate?

Answer 11

the price of one currency against another `

Question 12

what is infrastructure?

Answer 12

the basic systems, facilities, services and capital equipment required for a country’s economy to function

Question 13

what is reshoring?

Answer 13

bringing production back home after using foreign production facilities for a period of time

Question 14

what is a trade bloc?

Answer 14

a group of countries situated in the same region that join together and enjoy trade free of tariffs and other trade barriers

Question 15

what is franchising?

Answer 15

establishing a long-term cooperative relationship whereby one party (franchisor) contracts with another (franchisee) to run its business

Question 16

what is intellectual property?

Answer 16

a product that is a creation of the mind that the law protects from unauthorised use by others

Question 17

what is licensing?

Answer 17

a contract with another firm to use its intellectual property or to produce its product or service in return for a fee

Question 18

what are barriers to entry?

Answer 18

factors that make it difficult for a company to enter an industry or type of business and compete effectively

Question 19

what is competitive advantage?

Answer 19

the advantage one company has over another or several others in the provision of a particular product or service

Question 20

what is cost competitiveness?

Answer 20

through acquiring economies of scale, a company creates the cheapest product on the market

Question 21

what is cost leadership?

Answer 21

a way to establish a competitive advantage and essentially means the lowest cost of operation in the industry

Question 22

what is differentiation?

Answer 22

when a firm selects certain attributes of its products or services and tries to match these with specific customers

Question 23

what is economic risk?

Answer 23

risk that future cash flows will change due to unexpected exchange rate changes

Question 24

what is global competitiveness?

Answer 24

the extent to which a business or a country can compete successfully against rivals

Question 25

what are skills shortages?

Answer 25

were potential employees do not have the skills demanded by employers