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mock revision business > mr smith-globalisation > Flashcards

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
Q

saturated markets

A

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

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26
Q

competition

A

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

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26
Q
A
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27
Q

pull factors

A

something which makes it attractive for a business to trade abroad
likely to be opportunities

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28
Q

two examples of pull factors

A

economies of scale
spreading risk

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29
Q

spreading risk

A

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
Q

economies of scale-pull factor

A

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
Q

moving abroad extends a products life cycle

A

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
Q

offshoring

A

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
Q

dis of offshoring

A

not good for a businesses image
media and trade unions often criticise as reason for many job losses within orignal country (uk)

34
Q

reshoring

A

where business moves departemnst back to country orignally was from

35
Q

reasons why a business might reshore

A

businesses have became aware of them offshoring-may cause bad reputation

36
Q

push factors

A

motivate firm to look at business opportunities in other countries
-often threats to a firms profibability and survival of current market
-

37
Q

saturated markets

A

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
Q

competition

A

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
Q

pull factrsors

A

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
Q

offshoring non fincial benefits of moving deoartments abroad

A

creates jobs for country
increase incomes and standard of living

41
Q

off shoring non fincancial dis of moving

A

loses jobs for orignial country

42
Q

adv of outsouring

A

may benefit with specialised knowldge of business they outsource too
dont have to pay for permemnt staff so reduces costs

43
Q

dis of outsouring

A

doesnt have control of qulaity of outsouricing work ]
if quality low, disavantage to business

44
Q

what is a joint venture

A

agreement between two firms to work together on a project
businesses share profits in venture

45
Q

what is merger

A

where two firms agree to become one single business

46
Q

why migth a business eb=become a joint venture or mereger

A

spread risk of their bsuienss

47
Q

ethnocentric approach

A

keeps simialr marketinf streategy
little or no adaptation to local tastes
e.g apple has standard design worlwride with premium pricing used worldwide

48
Q

adv of ethnocentric approach

A

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
Q

polycentric approach

A

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
Q

adv of polycentric approach

A

essures sales as selling to customers wants and needs in each counttry

51
Q

dis of polycentric approach

A

expensive to do loads of market research
less chances of achieving economies of scale

52
Q

geocentric approach

A

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
Q

marketing mix

A

price
place
product
promotion

54
Q

which is more risky polycentric or ethnocentric

A

polycentric as have to change products for each takrt market so may nt be sucessful in one but successful in another

55
Q

Multinational companies

A

operate in several counteries
branches its departments in more than one country

56
Q

adv of multinational cpompany to llocal firms

A

creats jobs 9in emerging countries
highe wages, higher empolyment

57
Q

adv of Multinational companies on national economy

A
58
Q

per capita

A

how much individual gets each

59
Q

ways of measuring economic growth

A

literary rate

60
Q

international trade

A

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
Q

exports

A

products sold overseas
leaves orginal country, money goes into economy
uses way to expand
simple way to grow

62
Q

specialisation

A

when a business focuses on one product or small range of products
e.g india with tea

63
Q

FDI

A

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
Q

trade liberilistion

A

getting rid of trade barriers

65
Q

trade liberilsition

A

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
Q

adv of liberlisation

A

imported raw materials cheaper

67
Q

protecisionism and trading blocks

A
68
Q

types of protectionisms

A

subsideies ]tarrifs and quotas

69
Q

trading blocks

A

countries come together to form alliance
trade with each other

70
Q

adv of trading blocks

A

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
Q

dis of trading block

A

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
Q
A

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