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mr smith-globalisation Flashcards

1
Q

what is globalisation

A

-how interconnected the world is
means countries can trade
-increase in trend for markets to be international rather then domestic
has resulted in businesses operating in lots of countries around the world
helps businesses make strategic decisions(where to get there supplies)
where to manufacture products(countries with cheaper labour)

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2
Q

factors as to why globalisation has evolved

A

fewer of trade barriers

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3
Q

GDP

A

gross domestic product
indicator of economic growth
ttoal market value of good ans servies produced within a nation

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4
Q

what is international trade

A

all about trading between nations
they can import and export

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5
Q

imports

A

products brought from overseas
when someone buys an imported product, money goes back to the foreign country where product came from
imports cause money to flow in and out of an economy
can often be cheaper than domestically produced ones

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6
Q

exports

A

products sold overseas

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7
Q

what is foreign direct investment

A

way of firms takign advantage of opportunities in foreign markets
firm in one country invests business into another country
could be by merging or take over
to be classed as FDI, business must have some manageria; control of business in foregin country
most FDI is horizontal-invests in business which is at the same production process
may be vertical-where at different production processes

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8
Q

adv of FDI

A

-gives firm access to new markets-more people to sell to so increased sales
-reduce firms costs e.g. cheaper labour costs in foreign country
-allows a firm to get first hand knowledge about nations legal system, consumer tastes and markets
-help business overcome international trade barriers e.g quotas and tarrifs, which can prevent access to a market
-can icnrease stadnars of living for emerging economies as havign more money investedd into their economy

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9
Q

what is trade liberalisation

A

removes restrictions to international trade
it removes or reduces international trade barriers
increase in liberalisation leads to increase in international trade and globalisation

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10
Q

some examples of internal trade barriers

A

difficulty in trading in certain countries
expensive to trade
quotas
tarrifs

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11
Q

adv of trade liberlisation

A

raw materials that firm imports will become cheaper, allowing firms to lower costs, could then make it more competive s can charge lower prices
exporting goods is more easy and cheaper
consumer choice increased as products all around world

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12
Q

what can make a country more open to trade

A

political change
may chnage political system to one which is more towards trade liberailsiation and intrenal trade ad globalisaion

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13
Q

economic development

A
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14
Q

what is protectionsim

A

where government potects business and jobs from forgein competitors

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15
Q

what are the three ways a government can portect a business from foreign competition

A

tarrifs and quotas
goverment legislation
domestic subsidies

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16
Q

tarrifs and quotas
TDQG

A

tariff-price that must be paid if certain products imported into a country

import quotas-trade restriction set by government that puts limit on amount that can be imported into a country

they discourage internal trade by limiting amount of imports allowed in a country or making imports more expensive

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17
Q

adv of tarrifs and quotas

A

protect domenstic firms as less competiton from forgein firms

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18
Q

dis of tarrifs and quotas

A

restricts consumer choice
may mean consumers have to pay more for products

lack of comp also removes incentive for domestic firms to improve efficiency and quality

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19
Q

government legislation

A

restricts international trade
e.g trade embargoes-can ban trade with country all together
trade sanctions can restirct trade

both make it difficult and expensive
may cause retalitaion-the other country may restrict trade with you, restricing your country development

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20
Q

domestic subsidies

A

sums of money provided by government to dometic firm in certain economy e.g steel
reduces production costs, allows domestic products to have lower pirce then imports

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21
Q

dis of domestic subsidies

A

subsidies cost government money
means people in economy face paying higher taxes to fund subsidies

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22
Q

what is a trading bloc

A

members sign agreements to remove or reduce protectionist barriers between them
trading blocs has helped trade liberlaition

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23
Q

adv of trading blocs

A

can have more access to skilled workers, improve efficiency therefore production
-removal of trade barriers means business may have cheapest supplies within the bloc therefore increasing demand

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24
Q

push factors

A

motive businesses to look at business opportunities in other countries
include saturated markets and competiton

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25
saturated markets
all consumer demand is being met crowed and have few opportunities for sale growth saturated markets may move into othre countries to increase sales e.g market for coffee shops becomign more and more saturdated meaning starbucks moving into other countries
26
competition
high levels of competeion can reduce sales and profitbality frims may be forced to move abroad e.g high levels of comp for tea bags in uk teabag company then may move into country where less competiton for tea bags
26
27
pull factors
something which makes it attractive for a business to trade abroad likely to be opportunities
28
two examples of pull factors
economies of scale spreading risk
29
spreading risk
reduces risk of downturn in one market more business is able to spread it's risks, the more stable it will be e.g birth rate declines in one country baby products sold in several countries so wont affect firm massively
30
economies of scale-pull factor
migh expand to reduce their unit costs and achieve global economies of scale e.g research facility may need economies of scale to afford innovation and research and development
31
moving abroad extends a products life cycle
product that is in the declinging stage in one country, may be in its maturity/growth stage in another country then mean product life cycle has been extended
32
offshoring
moving parts of a business to cheaper countries business locate some of their departments overseas often move to china etc places with much cheaper labour
33
dis of offshoring
not good for a businesses image media and trade unions often criticise as reason for many job losses within orignal country (uk)
34
reshoring
where business moves departemnst back to country orignally was from
35
reasons why a business might reshore
businesses have became aware of them offshoring-may cause bad reputation
36
push factors
motivate firm to look at business opportunities in other countries -often threats to a firms profibability and survival of current market -
37
saturated markets
consumer demand has been met or is being met little chance for sales growth moving to unsaturated market overseas may give higher chance to increase sales e.g markets for coffee shop in USA became more and more satuated
38
competition
high levels of competiton canredeuce profitability and sales by moving to a country where there is less demand for that exact porduct, means more liekly to increase sa;es
39
pull factrsors
something which makes it attractive to trade abroad spreading of risk and economies of scale are two reasons businenss may start to trade abroad by selling abroad, spreading risk of company making it more stable reeduce unit costs-more liekly to achieve economies of scale
40
offshoring non fincial benefits of moving deoartments abroad
creates jobs for country increase incomes and standard of living
41
off shoring non fincancial dis of moving
loses jobs for orignial country
42
adv of outsouring
may benefit with specialised knowldge of business they outsource too dont have to pay for permemnt staff so reduces costs
43
dis of outsouring
doesnt have control of qulaity of outsouricing work ] if quality low, disavantage to business
44
what is a joint venture
agreement between two firms to work together on a project businesses share profits in venture
45
what is merger
where two firms agree to become one single business
46
why migth a business eb=become a joint venture or mereger
spread risk of their bsuienss
47
ethnocentric approach
keeps simialr marketinf streategy little or no adaptation to local tastes e.g apple has standard design worlwride with premium pricing used worldwide
48
adv of ethnocentric approach
having same product for all makrets, increases chance of chievibg encomoies of scale uses same marketing techniques worldwide, reduces marketing cocts less time and money spent on marketing research assumes all markets want same product so willing to pay same price customers rather buy well known global brand as good reputautopn
49
polycentric approach
using different marketign strategies means different products and marketing strategies in each country market research can be use to find ou different wants for different markets
50
adv of polycentric approach
essures sales as selling to customers wants and needs in each counttry
51
dis of polycentric approach
expensive to do loads of market research less chances of achieving economies of scale
52
geocentric approach
mix betweeen other approaches combination of both Polycentric and Ethnocentric has ethnicentric idea of global focus but uses factors of plycentruc approach e.g dominos has global brand but changees its menu depending on market/country
53
marketing mix
price place product promotion
54
which is more risky polycentric or ethnocentric
polycentric as have to change products for each takrt market so may nt be sucessful in one but successful in another
55
Multinational companies
operate in several counteries branches its departments in more than one country
56
adv of multinational cpompany to llocal firms
creats jobs 9in emerging countries highe wages, higher empolyment
57
adv of Multinational companies on national economy
58
per capita
how much individual gets each
59
ways of measuring economic growth
literary rate
60
international trade
trading international imports-products brought from overseas money goes back into original country, money goes out of an economy -increases vairety of goods and services -cheaper then domestic ones
61
exports
products sold overseas leaves orginal country, money goes into economy uses way to expand simple way to grow
62
specialisation
when a business focuses on one product or small range of products e.g india with tea
63
FDI
firm in one country invests in business in another country could be takeover or mergers have to have some type of control mostyly horizontal-same point of production process
64
trade liberilistion
getting rid of trade barriers
65
trade liberilsition
tarriffs-extra tax on imported goods so same price to help donestuc businesses quotas-how many allowed to sell/import subsidies-govemernet gives money to domestic businesses to help start them up/protect them procedures
66
adv of liberlisation
imported raw materials cheaper
67
protecisionism and trading blocks
68
types of protectionisms
subsideies ]tarrifs and quotas
69
trading blocks
countries come together to form alliance trade with each other
70
adv of trading blocks
cheaper suppliers less regulations-less forms bigger market to sell products too more efficancy between countries can put tariffs and quotas to protect your counteries
71
dis of trading block
more expensive for imports and exports for countries not in the block people in block can be taken out of block by more competitive markets
72

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