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Business A-level > 4.1 + 4.2 > Flashcards

4.1 + 4.2 Flashcards

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1
Q

Globalisation definition

A

The process that enables markets to operate internationally. It requires the free movement of products, resources and finance so that businesses can produce and sell in a world market.

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2
Q

PESTLE

A

P-political (government supporting innovation)
E-economic (investment overseas)
S-social (lifestyle,fashion + outlet)
T-technological (improvement in resources)
L-legal (regulations + standards)
E-environmental/ethical (global warming)

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3
Q

BRICS + MINT (are ……)

A

Emerging countries

Brazil
Russia
India
China
South Africa

Mexico
Indonesia
Nigeria
Turkey

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4
Q

Emerging economy definition

A

Economies of developing countries where there is rapid growth but low income per head and operating risks

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5
Q

Features of emerging economies (4)

A

-Rapid industrialisation
-Faster long-term economic growth
-Many inhabitants are still in poverty (low income per head)
-Businesses struggle to access global market

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6
Q

Business threats of emerging economies (3)

A

-Large pools of skilled but low cost labour
-Undervalued currencies making exports cheaper
-Inadequate protection of brand

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7
Q

Business opportunities of emerging economies (3)

A

-Growing numbers of educated consumers = increase in consumer spending
-culture shifts
-potential for joint ventures

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8
Q

GDP meaning

A

gross domestic product= a measure of the size of an economy

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9
Q

expansion meaning

A

the process of increasing the size/target market of the business in order to increase revenue

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10
Q

what are the 6 main indicators of growth

A

-GDP
-GDP per capita
-PPP (purchasing power parity)
-literacy rate
-health (life expectancy + mortality)
-HDI (human development index)

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11
Q

GDP per capita definition

A

a broad measurement of average living standards or economic well-being

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12
Q

PPP definition

A

purchasing power parity = an economic theory of exchange rate determination, measuring prices at different locations

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13
Q

literacy rate definition

A

the proportion of the adult population that has the ability to speak read and write

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14
Q

health meaning

A

the state of being free from illness or injury

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15
Q

life expectancy meaning

A

the average period a person may expect to live

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16
Q

mortality definition

A

the state of being subject to death

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17
Q

HDI meaning

A

human development index, a country’s summary of achievements in social and economical dimensions
-health
-knowledge
-standard of living

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18
Q

implications of economic growth - globalisation (6)

A

-expansion in trade of goods/services between countries
-increase in transfers of financial capital across nations
-development of global brands
-shifts in production + consumption
-increased labour migration
-shifts in economic + political strength

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19
Q

implications of economic growth - result of emerging economies (6)

A

-urbanisation process continues to develop quicker
-industrialisation
-population growth
-per capita income growth (middle/working class)
-improve in workforce productivity
-technological innovation

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20
Q

implications of economic growth - employment patterns (3)

A

-rise in number of people seeking jobs
-productivity rises and income expands
-structural change in employment from primary, to secondary + tertiary

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21
Q

GDP per capita formula

A

= GDP/population

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22
Q

HDI limitations (1)

A

-takes no account of income distribution

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23
Q

international trade meaning

A

= the exchange of goods/services across international borders

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24
Q

import meaning

A

= goods that are made in one country and brought into another

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25
export meaning
=goods that are made in a domestic country and sold abroad
26
stakeholder meaning
= an individual, group or organisation that has interest in the activities of a business
27
specialisation meaning
= when a business/entity focuses on one product or a limited scope of products so as to become more efficient.
28
competitive advantage meaning
=the ability of a firm to produce goods/services that are unique and have some form of superiority about them
29
comparative advantage meaning
= the ability of a country to produce goods/services at a lower opportunity cost than other firms
30
give one example of a specialised country
india -specialises in IT
31
benefits to specialisation (2)
-increased productivity + output = reduced average costs + economies of scale -increased productivity will lead to GDP growth + sale increase will boost economic growth
32
specialisation drawbacks (3)
- a country may become over reliant on one industry - other countries may become cheaper in the same industry -may suffer from diseconomies of scale due to lack of coordination/communication
33
diseconomies of scale meaning
when a company or business grows so large that the costs per unit increase
34
FDI meaning
foreign direct investment = an investment a firm or business makes to another in a different country
35
why do businesses prefer FDI over exporting ? (5)
-managers want to keep control over countries operations -to protect intellectual property -to be close to its customers -reduce transportation costs -trade barriers/political opposition
36
inward FDI meaning
=receiving investment from overseas
37
outward FDI meaning
=investing overseas
38
horizontal FDI
=producing the same product or services as is done in the home country
39
vertical FDI
=where a firm seeking to acquire materials or support for its own products of services
40
different forms of FDI (3)
-joint ventures -strategic alliances -mergers + acquisitions
41
how does vertical FDI allow businesses to grow ? (2)
-builds a new business in another country -new jobs
42
how does horizontal FDI allow businesses to grow ? (1)
-buying an existing business + facilities
43
how does FDI benefit the host country ? (3)
-brings high paying new jobs -brings new tech + creates new markets -increases exports
44
what is migration ?
the movement of a person or people from one region to another
45
factors contributing to increased globalisation (8)
-trade liberalisation -political change -reduced cost of transportation + communication -increased investment (FDI) -migration -structural change -growth of labour force
46
trade liberalisation meaning
=the process by which international trade is made easier through a relaxation of the rules which govern it
47
benefits of trade liberalisation (6)
-more competitive markets -creates business opportunities -lowers prices and broadens range of the quality of goods/services -diversifies risks + channels resources -facilitates competition/investment -increases productivity
48
political change benefits (3)
-now happens on a global scale -less protectionist policies -open trade between nations
49
benefits of transnational companies (3)
-cheap labour -mass produce goods for a global market -productive + high profits
50
benefits of increased investment (FDI) (1)
-increased GDP
51
drawbacks of increased investment (FDI) (2)
-can have a damaging effect on competition -possible loss for domestic rivals
52
benefits of growth of labour force (2)
-helps drive global demand -boosts number of businesses globally
53
joint venture definition
a commercial arrangement between two or more participants who agree to co-operate to achieve a particular objective.
54
protectionism meaning
involves protecting a country's domestic industries, companies and jobs from foreign competition.
55
3 main methods of protectionism
-tariff -import quota -government legislation + subsidies
56
tariff definition
=tax imposed on a product when entering a country
57
quota meaning
= restriction of the actual quantity of good imported.
58
domestic subsidy meaning
reduction of costs for domestic firms, making them more internationally competitive
59
non-tariff barrier meaning
law and other restrictions on the type of goods imported into a country
60
push factor definition
factors/threats that force a business to expand overseas
61
pull factor definition
factors/opportunities that encourage a business to expand overseas
62
push factors (5)
-saturated domestic market -low growth opportunities -end of product life cycle at home -need to diversify -need to reduce risk
63
pull factors (6)
-attraction to new overseas markets in emerging industries -opportunity to gain EOS -new markets -exploit competitive advantages -ways to extend product life cycle -risk spreading
64
why do businesses want to target international markets ?(5)
-reduce dependence on domestic market -access faster growing markets + demand -achieve economies of scale -better customers located overseas -build brand value, particularly global brands
65
2 main conditions that prompt trade
-push factors -pull factors
66
outsourcing definition
=where a business function is contracted out to a third party
67
outsourcing benefits (5)
-improved focus on core business activities -increased efficiency -controlled costs -increased reach (more access to facilities) -greater competitive advantage
68
drawbacks of outsourcing (5)
-possible slower service -breach of confidentiality -lack of flexibility -management difficulties -instability (over reliance)
69
offshoring definition
= when a business relocates overseas
70
offshoring benefits (5)
-business growth -access to staff -greater availability -reduced risk -control
71
drawbacks of offshoring (7)
-communication issues -cultural differences -social barriers -time zone differences -security -loss of intellectual property -external factors
72
what factors do businesses need to consider when making assessment of a country as a market
PILEE -political stability -infrastructure -levels of disposable income + growth -exchange rates -ease of doing business
73
political stability meaning
=how secure a government is and how strong the political framework supports the country
74
infrastructure meaning
= the physical systems that a country or business require to operate properly
75
levels of disposable income + growth meaning
= the total income an individual has available to spend after paying taxes/bills
76
ease of doing business meaning
=how accessible markets are for a business
77
what factors would a business need to consider when moving production (8)
-skills + availability -natural resources -governement incentives -market conditions -production costs -risks -location is in a trading bloc -likely return on investment
78
reasons for mergers/joint ventures (5)
-risk spreading -entering new markets -acquiring national/international patents/brand names -securing resources/supplies -maintaining/increasing global competitiveness
79
what does SPICED stand for
strong pound imports cheaper exports dear
80
appreciation meaning
= when the pound is stronger against another currency
81
depreciation meaning
= when a pound is weaker against another currency
82
low cost leadership meaning
= producing the same equality products as its competitors at a lower price
83
how may a business gain low cost leadership ? (3)
-good resource management -efficient production methods -waste minimisation
84
differentiation meaning
= producing unique product or giving a unique service
85
causes for increase in exchange rates (4)
- increasing demand for exports -lower demand for imports -increase in interest rates -FDI into currency
86
factors affecting the significance of exchange rates depends on... (4)
- how much the business exports to other economies -whether domestic businesses face strong competition -how much a business relies on importing goods -the PED
87
who wins from lower exchange rates ? (2)
-businesses exporting into international markets -businesses earning substantial profits overseas currencies
88
who loses from lower exchange rates ? (2)
-businesses importing goods + services -overseas businesses trying to compete in the industry
89
skill shortages meaning
= when there is a lack of workers with the right qualifications in the industry
90
what are skill shortages caused by (3)
-imbalance in the global economy -many skilled jobs being replaced with machinery -lack of qualification
91
negative impacts of skilled workers (3)
-higher labour costs -increased training requirements -harder to recruit
92
who is mostly responsible for skilled worker shortages ?
the government
93
what can be done to overcome skilled shortages - government (4)
-invest in vocational education -provide firms + industries to offer more/better industries -encourage inwards migration -provide tax for firms to invest in training education
94
what can be done to overcome skilled shortages - businesses (4)
-raise wages + renumeration -offer better training -collaborate with other firms -offshore activities with skill shortages -outsource to specialist providers
95
benefits of internationalisation
- can give businesses access to larger market of customers, which can increase sales rev. + profit -can reduce business risk incase demand in home market declines rapidly following a change in tastes + fashions

Business A-level (20 decks)

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