Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business A Level > Theme 4 > Flashcards

Theme 4 Flashcards

1
Q

Impact of economic growth on business

A
  • potential for increased profits
  • reduced costs of production
  • increased trade opportunities
  • increase in investment (including FDI)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Impact of economic growth on individuals

A
  • reduced unemployment
  • increased average incomes
  • access to quality public services
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Indicators of growth

A
  • GDP per capita
  • health
  • literacy
  • human development index (HDI)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Specialisation

A

Occurs when a country/business decides to focus on producing a particular good/service E.g., Apple focus on the production of technological products and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Benefits of trade liberalisation

A
  • increase market size -> increase output + benefit from economies of scale
  • reduced costs as imports can be cheaper
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Drawbacks of trade liberalisation

A
  • infant industries may not be able to compete against international firms
  • dumping may occur -> businesses abroad may sell excess products at unfairly low prices
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Reasons for increased globalisation

A
  • reduced trade barriers/trade liberalisation
  • political change
  • reduced transport and communication costs
  • increased importance of global companies
  • increased investment flows
  • migration (within and between economies)
  • growth of global labour force
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Protectionism

A

When a government seeks to protect domestic industries from foreign competition e.g., tariffs and quotas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Tariff

A

A tax placed on imported goods from other countries - they increase the price of imported goods which shifts demand from foreign businesses to domestic business (why it’s used as a protectionist method)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Quota

A

An import quota is a government imposed limit on the amount of a particular product allowed into the country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Trading bloc

A

A group of countries that form an agreement to reduce or eliminate protectionist measures between each other - encourage trade liberalisation between the countries e.g., ASEAN and The EU

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Benefits of trading blocs for businesses

A
  • wider markets
  • external tariff walls
  • infrastructure support
  • free movement of labour
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Drawbacks of trading blocs for businesses

A
  • increased competition
  • common rules and regulations
  • retaliation
  • inefficiency
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Assessment of a country as a market

A
  • levels and growth of disposable income
  • ease of doing business
  • infrastructure
  • political stability
  • exchange rates
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Extension of the product lifestyle

A
  • Development
  • introduction
  • growth
  • maturity
  • EXTENSION - sell in multiple markets for example
  • then decline (rather than straight declining after maturity)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Reasons for merger or joint ventures

A
  • spreading risk
  • entering new markets/trade blocs
  • acquiring national/international brand names and patents
  • securing resources/supplies
  • maintaining/increasing global competitiveness
17
Q

Cost leadership

A
  • when a business becomes the LOWEST COST PRODUCER in their industry
  • can be achieved using strategies such as:
    1. Increasing the productivity of their workforce
    2. Using machinery and technology efficiently
    3. Outsourcing
    4. Offshoring
    These reduce prices which increases profit margins and makes them a cost leader
18
Q

Methods of differentiation

A
  • strong brand
  • better design
  • better quality
  • customer service
19
Q

Global marketing

A
  • a business doesn’t differentiate its products or marketing between countries.
  • the same product is sold in many countries with some fine tuning of the product, price, promotion etc.
20
Q

Polycentric

A

Adapt to each market to appeal to local customers to maximise revenue
- changing 3-4 elements of the marketing mix.

21
Q

Ethnocentric

A

Standardise the product for all markets to keep costs low, products sold without adaptations e.g., IKEA

  • A business which believes that a success story in one country can translate into others.
22
Q

Geocentric

A
  • A mixture of polycentric and ethnocentric, branding may be done on a global basis.
  • Have advantages of a standardised global approach to get economies of scale BUT cater for the needs of individual markets to maximise sales.
23
Q

Global niche market

A
  • A subset of the global market.
  • A very small market in each country but the combination of all the countries together makes enough demand to make the business profitable.
  • highly specialised, very loyal customers + premium prices.
24
Q

Advantages and Disadvantages of the global niche market

A

Pros:
- Niche markets in many countries can build up to a significant market where a business can enjoy significant demand.
- sell niche across the world to reduce average costa and spread the fixed costs over more units sold.

Cons:
- A niche market in one country can be very small.
- fixed costs are higher for niche businesses.

25
Q

Cultural factors

A
  • beliefs
  • moral values
  • traditions
  • languages
  • laws held by a country
26
Q

Social factors

A
  • lifestyle
  • religions
  • economic wealth
  • family structure
  • education
  • political systems held by a country
27
Q

High context communication needs

A
  • establish social trust first
  • value personal relationships + good will
  • agreement by general trust
  • negotiations slow and ritualistic

Examples: Chinese, Japanese, Vietnamese.

28
Q

Low context communication needs

A
  • Get down to business first!
  • value expertise and performance
  • agreement but specific, legalistic contract
  • negotiations as efficient as possible

Examples: Scandinavian, English, German

29
Q

Advantages of MNCs

A
  • MNCs bring FDI
  • MNCS create jobs for the host nation
  • MNCs pay taxes to the host nation
  • MNCs help to increase competition
30
Q

Disadvantages of MNCs

A
  • MNCs send all their profits back to their home nations
  • MNCs only give menial/temporary jobs to the host nations. All the management jobs go to those from the home nation
  • Lots of examples of MNCs who don’t pay what they should e.g., Starbucks
  • MNCs destroy fledgling businesses who cannot compete as they don’t have the economies of scale of MNCs
31
Q

Definition of an MNC

A

A multinational corporation, a business which operates in more than one country e.g., Coca-cola produces in over 200 countries.

32
Q

Shareholder objectives vs. Ethical objectives

SHAREHOLDER

A
  • high profits
  • high dividends
  • growth
  • return on their investment
  • a positive corporate image
33
Q

Shareholder objectives vs. Ethical objectives

ETHICAL CORPORATES

A
  • low emissions
  • safe waste disposal
  • paying fair wage rates to employees in other countries
  • sourcing sustainable raw materials
34
Q

Controlling MNCs

A
  • Political Influence e.g., Lower corporation tax in Ireland
  • Legal control e.g., new environmental laws
  • Pressure groups e.g., strong influence, can cause a PR disaster
  • Social media e.g., can orchestrate boycotts on brands and effect sales and reputation of MNCs

Business A Level (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions