set 2

Question 1

why do business sell in international market?

why might it be good for business to sell it products in international market? ( 3)

Answer 1

• offer business growth opportunities

1. increase market size = selling existing products in different countries

2.operating in developing countries with low wage rates.

3. can reduces their cost as they will be getting raw materials from countries with cheapest prices.

Question 2

what might affect a business from selling their products in international markets?

Answer 2

1. size of market
   - countries with larger population might have bigger markets and this could be attractive however business need to consider population demographic - for e.g pharmaceuticals companies might target countries with ageing population
2. political and economic factors
   - business entering international markets also need to consider laws in country they are entering as might affect profitability of business.
3. cultural and ethical factors
   - it might difficult to trade in countries where there is language and cultural barriers.
   cheap labour might be attractive to business however they need to be careful not to exploit as unethical and they might be boycott if their practices come to light.

Question 3

what are 4 ways of entering international market?

how does entering markets impact other areas of business give me 3

Answer 3

1. importing and exporting = buying from or selling to
   importing = benefit from variety and cheaper prices
   exporting = increase market size
2. licensing = another firm makes the product but original company name is on the product
   - make money from doing little work
3. alliances = business can join force with other similar business abroad and share knowledge
   disadvantage = may lost control
4. direct investment = business mergers or takes over with a business in different country. allow enter markets quickly

entering international markets can impact areas of the business

hr = have to recruit people who speak multiple languages

finance = put in methods with dealing with exchange rates

marketing = have to split from international and national departments as products will be priced and promoted differently.