4.2

Question 1

Push factors for trade

Answer 1

Saturated markets- when a product has become so common in a market that there’s no potential customers left to sell to has to enter new market (market development)
Competition- arrival of big multinational , may have to flee to international markets to extend product life cycle .

Question 2

Pull factors for trade

Answer 2

Eos-
Spread the risk- may fail in one country but have demand in another

Question 3

Offshoring and outsourcing

Answer 3

Move factory to another country , cheaper labour maybe.

Finding another company to do a certain task maybe abroad, customer service.

Question 4

Factors to consider to make a market attractive

Answer 4

-disposable income ,US, Norway
-ease of doing business ,UK take 4 days to set up a company , China 23
-exchange rate spiced
-competitors

Question 5

Factors assessing of country as a production location

Answer 5

• cost of production, )labour wages
  -skills and availability of labour force
  -location in trade bloc(so can access free trade) e.g china and India not in ASEAN.
  -government incentives(grants machinery)
  —natural resources (coal)availability

Question 6

Joint venture vs global merger

Answer 6

JV short term only for a project , 2 businesses come together. (Launching a product)

Merger 2 business come together to form a new business more long term.

Question 7

Reasons for merger or venture

Answer 7

-spread risk over diff countries,
-entering new markets and trade
-mainting and increasing global competitiveness
-natural resources

Question 8

Impact of a high exchange rate

Answer 8

Have large exports
Appreciation of the £ = products more expensive in other countries who u export to = lower demand

Question 9

Impacts of low exchange rate

Answer 9

Uk
Depreciation of pins means cost more for supplies that are imported.

Question 10

Competitive advantage through cost competitiveness

Answer 10

Predatory pricing