ASEAN

Question 1

what does ASEAN stand for

Answer 1

associations of south east Asia

Question 2

what is ASEAN

Answer 2

it was established in 1967 in Bangkok

including countries such as
singapore, malaysia, indonesia, phillipeans, thailand

and have 10 countries

with a potential 600 customers

Question 3

What are the disadvantages of ASEAN 2

Answer 3

• Chinese firms can export goods at a low cost, which can increase the carbon footprint as the transport costs are Hugh

-increased dominance in the markets, force UK businesses to change their practices and compete in the price wars

Question 4

What are som advantages of ASEAN 3

Answer 4

Increases economic growth- us knowledge to decrease unemployment and increase disposable income

-large markets- China has a large population meaning the The Uk has a large market to export goods

-cheaper materials- raw materials from ASEAN may be cheaper due to low production costs

Question 5

whsts the purpose and aims of ASEAN 3

Answer 5

• create free trade bloc of 10 countries. there will be few if any restrictions on trade between members which encourages trade between them

-aim to increase their exports to other countries and to attract FDI into their economies… accelerate their economic growth and the standard of living for each nation

-they can collaborate for greater agriculture and industries, to help improve the facilities of their people

Question 6

whats the challenges for UK organisations of trading with ASEAN 4

Answer 6

-increased competition from organisation in ASEAN- uk businesses may have to lower prices to remain competitive… reduction in profit and less appealing to potential shareholders

-distance from suppliers in ASEAN- transport costs increase- increase CO2 emission, bad reputation

-ASEAN remains very diverse in terms of religion and culture. UK organisations need to be aware of local prefrences and cultural sensitivities, apadpt marketing to meet local needs

-13 official language in ASEAN which can create communication difficulties between countries- UK organisations may have employ local agents to liase with local companies

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Question 7

whats the benefits for UK organisations of trading with ASEAN 6

Answer 7

• ASEAN has a potential market of 600 million. this leads to increased sale profit and more dividends to shareholders

-UK firms can take advantages of lower labour costs in Asian countries . increase competitiveness and can invest elsewhere

-there is a large number of raw materials available to access in ASEAN countries such as oil, gas, palm oil and rubber which can be exported quickly. less expenditure

-ability to spread the risk eg companies can raise capital in Singapore and set up factories in low cost locations such as vietnam

-ASEAN and Chinese organisations have been investing/buying in UK businesses, which may keep struggling UK companies stable.(1)
furthermore, local suppliers to these businesses have regular customs

• there is potential subsidies from the UK gov to UK businesses, in response to increased competition from ASEAN companies