Miss Blackwell Half Term 2

Question 1

Organic growth

Answer 1

Internal growth/growth within a business

Question 2

Examples of organic growth

Answer 2

• Launch new products
• Open new stores
• Become franchise

Question 3

Globalisation (2 definitions)

Answer 3

Increased integration and interdependence of national economies

The world coming together to trade in each others markets

Question 4

8 factors facilitating a high level of imports

Answer 4

• Reduction in trade restrictions
• Cost of production abroad
• Ease of transportation
• E commerce
• Communication
• Easy movement of capital
• Increase movement of people
• Rise in no. of multinationals

Question 5

Multinational definition

Answer 5

A business that has activities and operations in more than one country

Operates in/has branches in more than one country

Question 6

Advantages of being a multinational

Answer 6

• Economies of scale
• Take advantage of legal constraints
• Ability to enter new markets with less competition
• Low wages

Question 7

Disadvantages of being a multinational

Answer 7

• Transport costs
• Communication issues
• Reputation damage (unethical)

Question 8

Advantages of multinationals to LEDC’s

Answer 8

• Employment
• Gain skills
• Invest in infrastructure
• Utilisation of local resources

Multiplier effect in economy

Question 9

Negatives of multinationals to LEDC’s

Answer 9

• Low wages
• Low skill job (short term)
• Unsafe working practices
• Child Labour
• Drive our local businesses
• Income goes back to domestic market

Question 10

Strategy definition

Answer 10

Plan of action

Question 11

Global strategy

Answer 11

Building a competitive global advantage in order to operate on a global scale
Eg choosing locations

Question 12

Brand definition

Answer 12

A distinctive product created by use of logo, symbol, name, design, packaging or a combination of these
In order to differentiate from and compete with competitors

Question 13

Global brand

Answer 13

A brand recognised throughout much of the world

Question 14

Opportunities of globalisation

Answer 14

• Cheap labour costs/lack of legal constraints/regulations
• Cheap resources
• Lower costs eg factories
• Creates new markets with high disposable income (long term, multiplier effect)
• More customers
• Economies of scale
• Tax avoidance

Question 15

Threats of globalisation

Answer 15

• Reduces other countries reliance on us
• Lose jobs in domestic country
• Damage reputation (exploitation)
• Carbon footprint
• less control on operations (communication)
• May have to pay financial compensation due to exploitation
• Cultural differences to compensate for

Question 16

Reasons why some businesses are more affected by globalisation than others

Answer 16

• Business who produce
• Businesses offering a tangible or digital product (rather than service)
• With global appeal
• Without a USP (too much competition)
• Small businesses find it hard to expand due to lack of finance

Question 17

What is the European single market

Answer 17

Group of EU countries that seek to guarantee free movement of goods, services, capital and labour

Question 18

What are the 4 freedoms

Answer 18

Goods
Services
Labour
Capital

Question 19

How do UK businesses benefit from EU

Answer 19

• Employ anyone from EU
• No trade barriers
• Provide services in other countries (EU)
• Movement of capital

Question 20

What is free trade

Answer 20

No trade barriers

Question 21

What are trade barriers

Answer 21

Tariffs and quotas

Question 22

What are tariffs

Answer 22

A tax paid on imports

Question 23

What are quotas

Answer 23

A limit on quantity of a product imported in a given time