Theme 4 Topic 6 - Global Competitiveness Flashcards
Define Competitiveness
The ability to successfully sell your product in comparison with rival offerings
What are three ways MNCs may be able to be more competitive?
Economies of scale, Gaining access to cheaper and better resources by global sourcing, Tapping into better knowledge and innovation by carefully choosing the location of their R&D headquarters
Define Competitive Advantage
The advantages a business has over its rivals
Define Cost Leadership
Trying to be the lowest cost provider
What does cost leadership enable?
The firm to charge very low prices
Define Differentiation
Offering something different and unique compared to rivals
What does differentiation enable?
Higher prices to be charged through adding value
Define Cost Competitiveness
Enabling a firm to compete by minimising the production costs e.g. labour
Define Brand Identity
A sign, symbol or logo which makes a product or service stand out from rivals in the eyes of the consumer
Define Localisation
The ability to tailor products or services to local cultures and tastes
Define Exchange Rate
The price of one currency expressed in terms of another
What does SPICED stand for?
Strong Pound Imports Cheaper Exports Dearer
What impact does a weak £ have on exporting firms?
Can make goods cheaper overseas, which could increase sales
What impact does a strong £ have on exporting firms?
Can make goods more expensive overseas, so makes firms less competitive
What impact does a weak £ have on importing firms?
Imports can become more expensive, meaning prices might have to increase
