Unit 3 Keywords Flashcards
what is market share
this is the percentage of the total sales of one particular that comes from an individual business.
What is market saturation
this occurs when it becomes impossible to expand global sales further in that particular market e.g. washing machine and phones
what is market penetration
this refers to the process of expanding market share as to reach a larger number of customers
What is the product life cycle
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
What is meant by supply chain
the sequences of process which starts with acquiring the most basic inputs and with the delivery of the product to the customers.
Define outsourcing
Means buying necessary inputs from an independent supplier, wither in the same country or overseas. it can apply to components or complete products.
Define joint venture
A business collaboration where two or business pool their resources together to complete a specific task
Define trade liberalisation
this is the process of limiting and reducing trade barriers so that economy ultimately move towards free trade.
Define globalisation
globalisation is the integration of foreign market
Define infrastructure
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.
Define investments
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
what is meant by productivity
means output per unit of input
Define Foreign direct investment
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
What is trading bloc
Trading blocs is a group of countries that with one another but with agreement to reduce trade barriers
define Structural change
this occurs when some industries are declining whiles others are growing
Why is a uniform policy such as the euro good
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
Define division of labour
involves organising employees so that individuals specialise in one part of the production process. as they become quicker and more proficient at specific tasks.
Define specialisation
means that people make the most of their skills by concentrating on what they do best.
define absolute advantages
this exists if the real resource cost of a product is lower in one country than another
what is the theory of comparative advantage
this theory states that two each specialise the product with the lowest opportunity cost and then trade, real incomes will increase in both countries.
Define corporate social responsibility
this is how companies manage their business process to produce an overall positive impact on the environment
what is stakeholder
A stakeholder is anyone who is effected or has an effect on a businesses decisions
What is meant by ethical decision making
this means following codes of practice that embody moral values.
Define social audit
this is a formal review of a company’s progress in social responsibility, it highlights the progress or lack of it.
What is an emerging market
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
Define social and cultural differences
Comes from the fact that individual societies and groups within them may have a distinctive way of life
Why are tariffs used
They can be used to deter dumping
Tariffs can raise tax revenue
protect infant industries
define dumping
means exporting at a price that is less than the true cost of production
what is inward looking trade policies
use imports controls to protect their domestic producers from foreign competition
what is meant by intellectual property rights
these are the rights to own and to exploit ideas or inventions of literary or other cultural works.
synergy
2+2= 5
Why MNCs grow
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
Benefits of multinational companies to the host country
employment
effects on wages
skills and technology transfer
increase tax revenue indirectly
Disadvantages of multinational companies
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
Define glocalisation
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
