Theme 4 Flashcards
What are the indicators of growth
GDP per capita
literacy rate
health
Human Developement Index
What Countries are in BIRC
Brazil
Russia
India
China
What countries are in MINT
Mexico
Indonesia
Nigeria
Turkey
What are the top 5 imports of the UK
machinery
manufactures
materials
chemicals
fuels
What are the top 5 exports of the UK
machinery and computers
gems/ metals
vehicels
electric machinery
pharmacaticles
GDP
gross domestic product
the total monetary or market value of all the finished goods of all the finished goods and services produced within a country
Net exports =
total exports - total imports
GNP
gross national product
the value of all goods and services produced by a countries citizens in a given financial year, irrespective of their location
Specialization and competitiveness advatnages
Greenfield FDI
build a completely new factory or business. the best kind as it creates new jobs
brownfield FDI
buy an existing business and grow it
FDI benefits to host country
brings high paying new jobs
brings new technology
creates new markets
increases exports
what is a traiff
taxes on imports/exports
what is a quota
amount you are able to export
trade liberisation
the porcess of taking down the barier to trade between nations removing quotas abd tariffs
embargo
block
what is globilisation
the free movement of goods, services, people, capital information and technology enabiling businesses to sell their products anywhere in the world
advantages of trade liberisation
can break down monopolies
competitve
bettwer quality
globally scalable business model
improve education
diverse porducts and services
disadvantages of trade liberisation
brain drain acn affect economy
increased competition
loosend regulations exploit workers
enviromental damages
increased dependece on import
different aspects of globilisation
benefits and drawbacks
competieng inetnationally
exchange rates
imports and exports
enviromental impacts
utilises source materials more quickly, increased comosdity prices, increased pollution and global warming
structural employment
a large number of primary and secondary sector jobs have been moved to low wage economies creating structural unemployment issues in developed countries
movement of labour
alows the best talent to move quickly and easily access borders, creating a ‘brian drain’
what is protectionism
when a country takes action to protect its own industries by restricting trade with other
what is dumping
over production in developed countries may be released into the markets of developing nations which undercuts domestic prices and domestic producers may be forced to leave the market
domestic employment
portectionist measures might be to portect domestic jobs if infront industries are allowed to grow or local businesses arent undercut by MNC’S from developed countires
tradic bloc
a group of countries that come together and make sure agreements to make imports and exports cheaper and easier
balance of payments
placing restricyions on imports may help to reduce a balance of payments on current account
domestic subsidies
goverment payments to domestic businessesto help reduce production costs and improve competitiveness
what are the three main trading blocs
european union
ASEAN
USMCA
what are the push factors
saturated domestic markets
low growth oppourtunites
end of the product life cycle at home
need to diversfy
need to reduce risk
what are the pull factors
attractions to new overseas markets in emerging economies
oppourtunity to gain EOS by expanding overseas
oppourtunity to exploit competitve advantages in new markets
what is offshoring
a business may deciede to reloacte its business overseas this is to take advatage of low labour costs in manufacturing cost efficiencies and supply chains
what is outsourcing
this is where a business function such as payroll is contracted out to a third party business. this third party business may or may not be located abroad
what is infastructure
the basic end physical orginisational structures and facilities needed for the operation of a society or business
what are natural Resources
you may need raw materials from that country if you dont locate you may have to import which could be expensive. This will push up the costs of your production which will reuslt in reduced profits
Reasons for global mergers and joint venture
spreading risk over different countries
enetring raw materials/trading blocs
acquiring international brand names
sequring resources / supplies
maintaining/increasing global comptetitiveness
what is a global merger
a global merger is an agreement between two companies from different countries to join forces pernamently
what is a joint venture
an agreement to work together on a specific prject or region for a specified time such as ten years
what is organic growth
involves expansion from within a business for example by expanding the [prduct range or number of business units and location organic growth builds on the business own capabiities and resources
effects of the exchange rate depends on :
inflation: deoreciation can cause inflation and this will lead to uncertainty in business
recession: if there is a weak pound this is great for exports at lwoer prices but if there is a recession in the country buying the goods then demand will still be low.
PED:if goods are price inelsatic then the lower price due to the weak pound wont affect demand
raw materials: affect of appreciation or depreciation depends on how many raw materials the business buys
competition: affects of appreciation or depreciation depends on how competitive the market is that the biusiness trades in
competitive advantage
low cost leadership
differentiation
low cost leadership
with this stratergy a business will seek to produce the same quality products as its competitors at a lower price
differentiation:
a business will produce a unique product or give a unique service. they may have similar products but each will have some attributes which set it aside from the competition
skill shortages
this is when there is a lack of workers with the right qualifications in the industry
business which follow differentiation are more vunrable to skills shortages as they will require more skilled staff
global marketing
veiwing the world as a global makret place. creates a global brand. reating products that will suit a world audience
with global marketing companies will focus on :
product markets
emphasis on the similarities of customers aspirations or tastes
consumer access to the media
with global marketing companies will focus on :
product markets
emphasis on the similarities of customers aspirations or tastes
consumer access to the media
advantages of global marketing
EOS in production and distribution
lower average marketing costs
power in the market as your brand is known
consistency in brand image
disadvantages of global marketing
higher average marketing costs
more international competition
differences in consumer needs and wants
differences in legal enviroments
glocalistion
used to describe products and services that are both developed and sold to global customers but desgined so that they suit the needs of local markets
the international market debate -
the decision wether products sold in a new international market should be adpated or standardisedq
polycentric
adapt to each market to appeal to local customers to maximise profits revenue
ethnocentric =
strandardise the product for all markets to keep costs low
geocentric
business can have some of the pros of a standardised approach to get eos but cater for needs of individual markets to maximise sales. focuses on a particular region of the globe
4 p’s of the marketing mix
product
place
price
promotion
market segmentation
the process of spliting s business target markrt into different groups. Businesses use these groups to make it easier for them o develope products aimed at a certain group of people and to help then target their marketing
exapmples of market segmentation
demographic
behavioural
psychological
geographic
features of a global niche market
very small in each country but the combination og all the countries together
is subset of a global market
high specialized and is characterised by very loyal customers and premium prices
what is cultural diversity
range of different societies or people of different origins religouns and traditions all living and interacting togetehr
what is an mnc
sometimes called transnational company is a company that owns or controls production or service facilities
