Theme 4 - Global Business Flashcards
What is an emerging economy
An economy which the country is becoming a developed nation, often driven by economic growth & trade
What are the BRICS economies
Brazil, Russia, India, China & South Africa
[countries with global influence & power]
What are MINT economies
Mexico, Indonesia, Nigeria & Turkey
[emerging economic giants]
What are 2 opportunities for businesses in emerging economies
High rates of economic growth
Rising disposable income
Demand for goods rising (as secondary sector growing)
What are 2 threats for businesses in emerging economies
Increased risk of intellectual property theft
Restrictions in methods of doing business
Competition
What does EMDE stand for
Emerging Market and Developing Economy
What is Gross Domestic Product (GDP)
The total value of output & services produced in an economy in a stated time period
What are the 4 indicators of economic growth
- Gross Domestic Product (GDP) per capita
- Literacy rate
- Health
- Human development index (HDI)
What is the UK average literacy rate
86.3%
[compare to Nigeria 19.1%]
What country has the healthiest citizens
Norway
What is the Human Development Index (HDI)
A statistic which combines life expectancy, education, and income to rank countries into 4 tiers of human development (given a no. Between 1 (perfect) & 0 (awful))
What is international trade
The practice of selling & buying goods / services from abroad
How do firms benefit from trade
•Allows lower production costs
•access to range of resources & products
How do countries benefit from trade
Consumers in country receive lower prices, increased choice & increased living standards
What are exports
Goods/ services that a firm produces in a home market but sells in a foreign market
What is trade liberalisation
When trade barriers are removed & free trade is allowed to take place
What are imports
Goods/services that are purchased & brought into one country from another
What is specialisation
The process of concentrating on & becoming an expert in a particular subject or skill
Give 2 reasons why a country may have industries in which it leads in the world
Proximity & availability of raw materials
Low labour costs
Historical ability to produce
Who is theorist for Comparative advantage
David Ricardo
What is comparative advantage
When a country decide to specialise in a particular industry / sector due to it being the lowest opportunity cost
What are 2 limitations of comparative advantage
•It assumes the world doesn’t change
•It assumes that goods have no cost of distribution
Who is theorist behind competitive advantage
Michael Porter
What is competitive advantage
When a country or business produces a product or operates an industry better than competitors or other countries