KT 22: 4.2.3 Assessment of a Country as a Production Location, 4.2.4 Reasons Mergers for Global Mergers or Joint Ventures

Question 1

Assessment of a country as a production location

Answer 1

businesses make location decisions on the basis of quantitative and qualitative factors. The quantitative factors are analysed using investment appraisal.

Question 2

Bureaucracy

Answer 2

from the French word for desk or office, a business or government that is bound up in rules - often strangling initiative and enterprise.

Question 3

Multinationals

Answer 3

a business based in one country but with operations in many.

Question 4

Reasons for global mergers or joint ventures

Answer 4

a global merger is an agreement between two businesses from different countries to join forces permanently; a joint venture is an agreement to work together on a specific project or region for a specified time.

Question 5

Backward vertical takeover

Answer 5

buying a business in the same industry but at an earlier stage in the supply chain, e..g a bakery buying a flour mill.

Question 6

Generic products

Answer 6

are undifferentiated products, e.g. in pharmaceuticals they will be chemically identical.