4B Flashcards
Push factors
Domestic factor, adverse
Pull factors
Overseas factor, not favourable
Examples of push factors
-Saturated market, no potential for growth
-High levels of competition
New legislations
-poor economic conditions, recession
-changing consumer tastes and preferences
Examples of Pull factors
-Little competiton
-greater disposable income
-WPIDEC-favourable exchange rate
-Lower trade barriers
-Economies of scale
-cheaper labour
-risk spreading
Factors should be considered when assessing a country as a market
-Levels of disposable income
-ease of doing business
-quality of infrastructure
-political stability
-exchange rates, favourable
What is ease of doing business
How long it takes to set-up a business in a country, measured in days.
Factors that should be considered when assessing a production location
-costs of production
-skills of workers
-infrastructure
-location in trading bloc
-govt incentives
-ease of doing business
political stability
-natural resources
Global merger
an agreement between two firms from different countries to join forces and integrate permanently.
e.g
Heinz and Kraft
Global joint venture
A global joint venture is an agreement by firms in different countries to work together on a specific project for an agreed time period
Reasons why firms agree to merge
-spreading risk
-synergy
-enter new markets
-shared finance
brand names
securing resources and supplies
skilled labour
increased global competitiveness-EOS
Tax advantages
How can mergence increase global competitveness
-increased eos
-increased product ranges
-greater productivity
-greater efficiency
-increased skilled labour
Licensing
A commercial agreement between one company and another company allowing the licensee to manufacture in whole or in part, a certain product. In return the licensee pays the licensor a fee
Challenges with mergence
-Corporate clash
-language barriers
-DEOS
What is a firms competitiveness
A firms ability that gives a firm the edge over its rivals, cost leadership, brand loyalty, USP
