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Business A Level > Theme 4 > Flashcards

Theme 4 Flashcards

1
Q

Bric economies

A

Groupings of countries with global influence and power

They have economical cultural and geopolitical influence

Bricks- Brazil Russia India china

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2
Q

Mint economies

A

Mints - Mexico Indonesia Nigeria and turkey

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3
Q

Economy

A

Is the state of a country in terms of comsuption and production of goods and services and the supply of money

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4
Q

Indicators of growth

A

Gross domestic product per capita
Literacy
Health
Human development index

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5
Q

GDP

A

Figure for a country shows the sum total of everything they produce as a nation

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6
Q

Literacy

A

Literacy levels are a key indicator of the economic growth of the worlds countries

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7
Q

Health

A

World health organisation keeps a record of life expectancy at both in years (the higher the better )

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8
Q

Hdi

A

This is a statistic which combines :life expectancy,education, and income which are used to rank countries

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9
Q

Imports

A

When a country gets foods from another country

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10
Q

Exports

A

This is when countries trade with another countries and they send products abroad

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11
Q

Specialisation

A

The process of concentrating on and becoming expert in a particular

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12
Q

Benefit of specialist ion

A

A country can specialise in a particular industry

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13
Q

Down fall of specialisation

A

A country may become over reliant on one industry and they are not risk spreading

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14
Q

Fdi

A

Foreign direct investment this is when a business from one country decides to establish themsleves in another country

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15
Q

Globalisation

A

This is when a business enters international trade

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16
Q

Trade liberalisation

A

Is the process by which international trade is made easier through the relaxation of tariffs and barriers

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17
Q

World trade organisation

A

Exists to reduce barriers for trade and to make sure countries stick to their agreement

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18
Q

benefits of trade liberalisation

A

Libralised trade diversifies risks and channels resources tow where returns on investment are highest
Consumers benefit as librealised trade can help to lower prices

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19
Q

Drawbacks of trade liberalisation

A

Competition increases between nations and business which can lower profit margins

Increases trade cab mean pollution or over cu

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20
Q

G7 group

A

The seven major adavances economies which are Canada, France , Germany , Italy , Japan and the uk and the usa

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21
Q

Globalisation caused by reduced cost of transport

A

Cost of Goods being transported long dsitance has been reduced by cargo containers
And business can gain large eos shipping large quantities at once

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22
Q

Globalisation cause by reduced cost of communication

A

More communication by the internet means that messages are sent intanstpy and all countries are able to communicate

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23
Q

Globalisation caused by trading blocs

A

Businesses outside of important matteket trading blocs will,invest in a business set up in that trading block this has lead to globalisation is ,pre companies in more countries

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24
Q

Structural change

A

is a economic condition that occurs when an industry changes the way it operates

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25
Q

Protectionism

A

The theroy of shielding (protecting a country’s domestic industries from fore gain competition by taxing imports !or passing laws etc

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26
Q

Tariff

A

A tax which is placed on a import to increase its price and decrease its demand

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27
Q

Tariffs impact on business

A

Pre text their forgein domestic industries from forgein competition
If a business has to pay high tariffs they may have to reduce production and this can mean a loss in jobs

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28
Q

3 reasons why tariffs are imposed

A

To raise tax revenue
For enviormental reasosn -eg cigs
Protectism

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29
Q

Advantages of tarrifs

A

Domestic produced good don’t get tariffs so are cheaper
Domestic business have a competitive advantage as importers pay more
It can raise important face revenue

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30
Q

Disadvantages of tariffs

A

Some products even with high tariffs costs added don’t put off customers willing to pay for and imported product

Tariffs may just increase the price for consumers

Others countries may retaliate by imposing their own tarrifs on imports

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31
Q

Import quota

A

A quota is a physical limit on the quantity of goods imported or exported

By country doing this it increase the share of the market available for domestic products

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32
Q

Uses of import quotas

A

Are Imposed to protect jobs of domestic products

Also imposed as a barging chip to be used in negotiations on trade

Protect strategic industries - defence etc

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33
Q

Advantages of import quotas

A

Protect domestic industries
Safe guard jobs in domestic industries
Benefit to the costumers the prices of imported goods rise so domestic goods appear cheaper and better value

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34
Q

Disadvantages of import quotas

A

When one country uses quotas it’s trading partners do the same equaling unless exporting opportunities for both counties
Quotas are also complex for the country using them, they require a lot of paperwork

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35
Q

Government legislation

A

Some countries are not able to set tarrifs and quotas because of their trade agreements or are part of a trading bloc so they use government legislation to process their domestic industries

36
Q

Advantages of government legislation

A

Can be a power tool in stoping fake imports into the country

Also customers can trust the products they are buying are genuine

37
Q

Disadvantages of government legislation

A

,every import into the uk cannot be check
The profit goes to organised crime and is in many sectors

38
Q

Domestic subsidies

A

subsidy is a way of protecting their domestic markets
Money is given to the local producers ro make their goods cheaper on the domestic market

39
Q

Trading bloc

A

Is a type of intergovernmental agreement to reduce regional trade barriers

40
Q

Eu trading bloc

A

It contains 28 countries where there is free movement of people , goods and sevrecives between all 28 countries

41
Q

ASEAN trading bloc

A

Started with Thailand mayalsia , Philippines and Singapore there are now 5 more countries it has nnegotiated a feee trade agreement with other countries like china too

42
Q

NAFTA trading bloc

A

There are 3 countries which are USA , Canada and Mexico and they trade without tarrifs

43
Q

Opportunities of free trade

A

Freedom to trade
Enlargedmarket
Protection from international competition outside of the bloc
Freedom of movement of people

44
Q

Drawbacks of freed trade

A

Freed trade agreements can create problems for the business
Dominance of devolved countries in global trading
It can kill off domestic business in devolping nations

45
Q

Push factors

A

Push fcators which may force business to consider selling abroad
High levels of demotic competition
Saturated markets with only low growth opportunities

46
Q

Pull factors

A

Pull factors are what may force a business to consider selling abroad

Significant opportunities to sell to overseas markets
Ability to spread risk across more moarkets
Ability to gain eos

47
Q

Offshoring

A

This is when a business relocates some of its production prices to another country
This may be to cut costs like labour pay or to take advantage of trade blocs and trade deals

48
Q

Outsourcing

A

This is where a business function such as pay roll is contracted out to a third party business

49
Q

Factors the business can outsource

A

Production
Payroll
Purchasing
Delivery

50
Q

Extension of product life cycle

A

Extending the product lifecycle by selling in multiple markets eg international markets

51
Q

Factors to look for when assessing a country as a market

A

Levels and growth of disposable income
Ease of doing business
Infrastructure
Political stability
Exchange rates

52
Q

Importance of infrastructure

A

It means that road , rail and transport and without this it means a business can deliver it product on time also telecommunications which a business needs right now communicate with it suppliers and costumers

53
Q

Factors when assessing a country as a
Production location

A

Cost of production
Skills and availability of labour
Infrastructure
Location in trade bloc
Government incentives
Ease of doing business
Political stability
Natural resources
Likely return on investment

54
Q

Government incentives

A

The government of a country my off incentives to companies to set up there this could be like tax thus is in hope that foreign investors will bring capital their

55
Q

Joint venture

A

Is a commercial enterprise undertaken by two or more parties which otherwise retain their distinct identities it is only a temporary arrangement ( two or more business come together to collaborate on one project

56
Q

Advantages of joint ventures

A

Access to knowledge and resources
Access to new opportunities
Shared exposure to risk risk spreading
Helps maintain global competitiveness

57
Q

Dis advantages of joint ventures

A

Large number fail because of the many risks involved and the complexity of integrating operations and work culture of two different companies

58
Q

Two main ways to gain competitive advantage

A

Low cost leadship
Differation

59
Q

Factors to gain low cost leadership

A

Good resources management
Efficient production methods
Waste minimisation

60
Q

Factors of a product to make I different

A

Performance
Style
Design
Consistency
Durability
Reliability
Reparablilty

61
Q

Skill shortages affect on business

A

The lack of a bailout to find skilled workers will affect business which are operating on a differentiation method which will mean they will lose their competitive advantage

62
Q

Global marketing strategy

A

Means that a business doesn’t differ are its products or marketing between countries
Normally global brands as they create products which can be used globally

63
Q

Advantages of global marketing

A

Economies of scales can be achieved - lower the. Average marketing costs
Power in the market
Consistency in brand image
Able To leverage good ideas quickly and efficiently

64
Q

Glocalisation

A

Glocalisation is a combination of the
words ‘globalisation’ and
‘localisation’ and is used to describe
products and services that are both
developed and sold to global
customers but designed so that they
suit the needs of local markets

65
Q

Peg approach

A

The decision whether products sold in a new international marketshould be adapted or standardised

Polycentric – adapt to each market to appeal to local customers tomaximise revenue
Ethnocentric – standardise the product for all markets to keep costslow
Geocentric – a mixture of the two

66
Q

Cultural sensitivity

A

Means under adding that people all over the world have different interests and values

67
Q

Global niche market

A

A global niche market is a very small market in each country, but the
combination of all the countries together make enough demand to
make the business profitable
• A global market niche is a subset of a global market
• A global market niche is highly specialised and is characterised by very loyal customers and premium prices

68
Q

Advantages of selling in global market

A

There is less competition and greater customer loyalty in nichemarkets.
Prices are likely to be higher andtherefore profits may be greater.
Risk may be reduced
Specialist products reduce PED and premium prices may be
possible

69
Q

Dis advantages of selling in a global market

A

Some of the possible global economies of scale may not be achievable as each market will need individual attention
Co-ordination and communications may be more difficult across differing brands andmarkets
Some products may require uniqueingredients or productiontechniques reducing the scope for economies of scale

70
Q

Cultural factors

A

Include beliefs,moral values, traditions , language ,laws

71
Q

Social factors

A

Include lifestyle , religion, economic wealth , family structures, education m and political systems

72
Q

High context co,munication needs

A

Establish social trust first
Value person
A relations and good will
Agreement by general trust
Negotiations slow and rituasttic

73
Q

Low context communication needs

A

Get down to business ditsy
Value expertise and performance
Agreement by legalistic onstrcat
Negotiations efficient as possible

74
Q

Understanding markets

A

Different stuff mean different menaing in countries like colours , animals , words etc a business must undertake when selling and promoting a product their

Also how different countries have different tastes so they should understand to sell different variants of their products in different markets

75
Q

Positive impacts of mncs

A

Creates employment
Increases skill base
Increases standard of living
Raises country’s profile
Improves balance of payments
Improves infrastructure

76
Q

Negative impacts of mncs

A

Profit leakage
Low paid jobs
Pull out quickly
Poor safety record
Increase urbanisation
Widens the poverty gap

77
Q

Mncs balance of payments

A

In ward investment of a lot of capital straight to the government and also increased exporting for the country while import subisdition as products they used to have to import they can now buy domestically

78
Q

Mncs and fdi flows

A

Countries normally offer mncs government incentives so they set up their this is npr to attract investment (fdi) to their country

79
Q

Mncs impact on tax revenue and transfer pricing

A

transfer pricing” as shorthand for multinational
corporations shifting profits to tax havens to avoid tax in developedcountries

80
Q

Ethics

A

Means having moral principles that govern how a company does business

81
Q

Political influence to control Mnc activity

A

Government create harsher laws to stop mncs taking advantages of contraries like by paying very little tax they have introduced international tax laws however many people in government can be bribed and in some devolping countries the amount of jobs and wealth and mnc brings they tend to ignore they illegal activities

82
Q

Legal controls to control mnc activity

A
83
Q

Conditions that promote trade pull and push

A

Saturated markets
Competitors
Economies of scale
Risk spreading

84
Q

Exchange rates impacts on exports

A

Exports
Strong pound
Appear more expensive in international markets - less competitive,less sales , less revenue
Weak pound
Appear cheaper within international markets - more competitive, more sales , more revenue

85
Q

Exchange rates impacts on imports

A

Strong pound
Cheaper to buy the same amount of supllies - reduced costs which equals in a reduced price leading to increase in demand increasing sales
Weak pound
More expensive to buy same amount of supllies -increased costs equals in a increased cost leading to a decrease in demand and sales

Business A Level (4 decks)

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