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A level edexcel Business 2024 > Theme 4 > Flashcards

Theme 4 Flashcards

1
Q

Growth rate of the UK economy compared to emerging
economies

A

UK has a lower growth rate than emerging economies. Emerging economies are growing due to growth of manufacturing sector. Businesses chose to manufacture in emerging economies due to lower labour costs and access to raw materials.

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2
Q

Emerging economies

A

A
Emerging economies are economies that have increasing growth rates but relatively low income per capita
– India, china, brazil

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3
Q

What is growth rate measured by

A

annual change in GDP

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4
Q

Implications of Economic growth on businesses

A

Potential for increased profits
Reduced costs of production
Increased trade opportunities
Increase in investment

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5
Q

Implications of Economic growth on individuals

A

Reduced unemployment,
Increased average incomes
Access to quality public services

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6
Q

Indicators of economic growth

A

GDP per cap
literacy
health
HDI

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7
Q

The link between business specialisation and competitive
advantage

A

If they can increase the value added on their goods/services, this can help to gain an edge over their competitors

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8
Q

FDI

A

An investment into a country involving an external or foreign company either investing in or purchasing the goods of a local economy.

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9
Q

+ and - of trade liberalisation

A

+ Allows businesses to increase market size
+ Reduce costs, source cheaper
- infant industries cant compete
-dumping

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10
Q

Reasons for increased globalisation

A

Political change
Reduced cost of transport and communication
FDI
MNCs
Migration
Growth of the global labour force
Structural change

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11
Q

Domestic subsidies

A

Payments given to domestic businesses to help lower costs of production

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12
Q

Government Legislation

A

laws to restrict certain imports to protect customers and businesses

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13
Q

Free Trade Areas

A

reduction of import tariffs and quotas on trade between member countries.
– NAFTA

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14
Q

Customs Unions

A

removing trade barriers but also establishing a common external tariff on imports from non-member countries
– EU

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15
Q

Monetary Unions

A

common currency shared by member countries.
– Eurozone

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16
Q

+ and - for regional trade agreements

A

+ increased trade
+ efficiency gains
+ economies of scale

  • Complexity
    -exclusion
    -loss of sovereignty
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17
Q

WTO

A

Facilitating trade negotiations among member countries to reduce trade barriers

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18
Q

Push factors

A

factors that push a business to expand outside of their domestic country

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19
Q

Example of push factors

A

Saturated markets
Intense competition

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20
Q

Pull factors

A

encourage businesses to operate within markets abroad which present significant growth opportunities

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21
Q

Examples of pull factors

A

Benefiting from economies of scale
Spreading risk

22
Q

Offshoring

A

moves part of the production process, or all of it, to another country

23
Q

Reasons for offshoring

A

Lower labour costs
Access raw materials
Access skilled labour

24
Q

Outsourcing

A

hires an external organisation to complete certain tasks or business functions

25
Q

Reasons for outsourcing

A

Reduced costs
Allows business to focus on core competencies
Easier to comply with rules and regulations

26
Q

Assessing of a
country as a market

A

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

27
Q

Assessing of a
country as a production location

A

Costs of production
Skills and availability of labour force
Infrastructure
Location in a trading bloc
Return on investments
Natural Resources
Political Stability
Ease of doing business
Government Incentives

28
Q

Reasons for Global Mergers & Joint Ventures

A

Spreading risk
Entering new markets /
Acquiring national/ international brand names and patents
Securing resources
maintaining global competitiveness

29
Q

Global competitiveness

A

ability of a business to perform better than its rivals across markets in different countries

30
Q

S.P.I.C.E.D

A

Strong Pound Imports Cheaper Exports Dearer (dearer means more expensive)

31
Q

W.P.I.D.E.C

A

Weak Pound Imports Dearer Exports Cheaper (dearer means more expensive)

32
Q

Glocalisation

A

aim to reach customers globally and also take into consideration the needs of the local market

33
Q

Global marketing strategy

A

planning, producing, placing and promoting a business’s product or service to the global market

34
Q

Different Marketing Approaches

A

Domestic/ethnocentric
Mixed/geocentric
International/polycentric

35
Q

+ and - for ethnocentric

A

+ economies of scale
+ research costs are lower

  • lose sales if not tailored to needs
  • cultural insensitivity
36
Q

+ and - for polycentric

A

+ sales increase as meets needs
+ develop brand loyalty

-product development
- market research costs

37
Q

+ and - for geocentric

A

+ sales increase as meets needs
+ develop brand loyalty

  • Costs for changes
38
Q

marketing mix

A

tools that a company uses to promote its brand or product in a market
— product , price , place , and promotion

39
Q

Ansoff’s matrix

A

strategic planning tool that helps businesses identify potential growth opportunities by analysing their product and market strategies

40
Q

Ansoff matrix axis

A

Y - global markets
X - products

Existing, New

41
Q

Inside Ansoff Matrix

A

Top left, market penetration
Top right product dev
Bottom left market dev
bottom right diversification

42
Q

Global Niche Markets

A

small segments of the global market that are characterised by unique and specific needs and preferences

43
Q

Features of global niche markets

A

Customer Service
Innovation
Prioritising profit
Expertise
quality
Understanding of customer preferences

44
Q

Factors to Consider in Global Marketing

A

Cultural differences
Different tastes
Language
Unintended meanings
Inaccurate translations

45
Q

MNC

A

business that is registered in one country but has manufacturing operations/outlets in different countries

46
Q

+ and - of MNCs on Employment

A

+ job creation
+ competitive wages
+ working conditions

-exploit workers is regulations are weak
- pay relatively low wages
-relocate workers from their own country

47
Q

+ and - of MNCs on Local Businesses

A

+ boost local economy
+ joint ventures

-reduce supply of workers
-competition

48
Q

+ and - of MNCs on Local Communities and Environment

A

+ job oppurtinites
+ infrastructuree
+ pay taxes
+charitable initiatives

  • damage to environment
  • leave production facilities
49
Q

Impact of MNCs on the National Economy

A

FDI flows
Consumers
Balance of payments
Technology and skill transfer
Tax revenue
Business culture

50
Q

Controlling MNCs

A

Political influence
Legal control
Pressure groups
Social media

A level edexcel Business 2024 (10 decks)

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