Unit 3 Keywords

Question 1

what is market share

Answer 1

this is the percentage of the total sales of one particular that comes from an individual business.

Question 2

What is market saturation

Answer 2

this occurs when it becomes impossible to expand global sales further in that particular market e.g. washing machine and phones

Question 3

what is market penetration

Answer 3

this refers to the process of expanding market share as to reach a larger number of customers

Question 4

What is the product life cycle

Answer 4

refers to the phases which many products go through between their first introduction of the market and the eventual decline of the product. phases include introduction, maturity, growth and decline

Question 5

What is meant by supply chain

Answer 5

the sequences of process which starts with acquiring the most basic inputs and with the delivery of the product to the customers.

Question 6

Define outsourcing

Answer 6

Means buying necessary inputs from an independent supplier, wither in the same country or overseas. it can apply to components or complete products.

Question 7

Define joint venture

Answer 7

A business collaboration where two or business pool their resources together to complete a specific task

Question 8

Define trade liberalisation

Answer 8

this is the process of limiting and reducing trade barriers so that economy ultimately move towards free trade.

Question 9

Define globalisation

Answer 9

globalisation is the integration of foreign market

Question 10

Define infrastructure

Answer 10

this includes all the transport and communication facilities as well as the provision of basic services such as energy and water supplies e.g. telephone system, road, power station and drains.

Question 11

Define investments

Answer 11

is the spending of money now that will generate income in the future. it may entail building factories and buying machinery, research and development spending or education training

Question 12

what is meant by productivity

Answer 12

means output per unit of input

Question 13

Define Foreign direct investment

Answer 13

This is when business set up factories or other kinds of distribution facilities in other countries. Much FDI flows from one developed country to another

Question 14

What is trading bloc

Answer 14

Trading blocs is a group of countries that with one another but with agreement to reduce trade barriers

Question 15

define Structural change

Answer 15

this occurs when some industries are declining whiles others are growing

Question 16

Why is a uniform policy such as the euro good

Answer 16

it makes it harder for business to price discriminate
Business can operate free from the uncertainty stemming from fluctuating exchange rates
lowers transaction cost because of a single market

Question 17

Define division of labour

Answer 17

involves organising employees so that individuals specialise in one part of the production process. as they become quicker and more proficient at specific tasks.

Question 18

Define specialisation

Answer 18

means that people make the most of their skills by concentrating on what they do best.

Question 19

define absolute advantages

Answer 19

this exists if the real resource cost of a product is lower in one country than another

Question 20

what is the theory of comparative advantage

Answer 20

this theory states that two each specialise the product with the lowest opportunity cost and then trade, real incomes will increase in both countries.

Question 21

Define corporate social responsibility

Answer 21

this is how companies manage their business process to produce an overall positive impact on the environment

Question 22

what is stakeholder

Answer 22

A stakeholder is anyone who is effected or has an effect on a businesses decisions

Question 23

What is meant by ethical decision making

Answer 23

this means following codes of practice that embody moral values.

Question 24

Define social audit

Answer 24

this is a formal review of a company’s progress in social responsibility, it highlights the progress or lack of it.

Question 25

What is an emerging market

Answer 25

these are markets that are not fully developed but have a group of middle class consumers that is large and prosperous enough to provide a market for developed products

Question 26

Define social and cultural differences

Answer 26

Comes from the fact that individual societies and groups within them may have a distinctive way of life

Question 27

Why are tariffs used

Answer 27

They can be used to deter dumping

Tariffs can raise tax revenue

protect infant industries

Question 28

define dumping

Answer 28

means exporting at a price that is less than the true cost of production

Question 29

what is inward looking trade policies

Answer 29

use imports controls to protect their domestic producers from foreign competition

Question 30

what is meant by intellectual property rights

Answer 30

these are the rights to own and to exploit ideas or inventions of literary or other cultural works.

Question 31

synergy

Answer 31

2+2= 5

Question 32

Why MNCs grow

Answer 32

Because they can - technology has made it easier
To reduce costs - economies of scale
to access new markets - rising incomes overseas
to control resources - cheap source of materials
take advantage of government controls

Question 33

Benefits of multinational companies to the host country

Answer 33

employment
effects on wages
skills and technology transfer
increase tax revenue indirectly

Question 34

Disadvantages of multinational companies

Answer 34

they encourage so called race to the bottom
They act as agent for cultural imperialism
cause damage to the environment
move and take advantage taking whatever incentives they offer
infant industries may suffer
driven by profit

Question 35

Define glocalisation

Answer 35

the idea that a global product or service is likely to succeed if it is adapted to the specific requirement s of local practices and cultural expectations