4.2 Global Markets And Business Expansion 💥

Question 1

What is appreciation? What does this mean?

Answer 1

Arising a pound against other currencies

The pound can buy more in a foreign currency - high value

Question 2

What’s the depreciation?

Answer 2

Fall in the value of the pound by less that a foreign currency

Question 3

What is appreciation good and bad for?

Answer 3

Bad for exporters

good for importers

Question 4

What is depreciation good for?

Answer 4

Exporters

Question 5

What is depreciation bad for?

Answer 5

Importers

Question 6

What are the two impacts on a business due to exchange rates?

Answer 6

Can maintain the price and change profit margin - absorb the disadvantages - lower if bad

Or you can change price

Question 7

What are the four things that the effect of the exchange rate depends on?

Answer 7

Inflation -depreciation can lead to an increase in inflation - lead uncertainty for the business

recession - if you have a weak pound - good for exports due to lower prices

but if there will be less disposable income demand will be low

Price elasticity of demand - if inelastic a weak pound will not affect your demand

raw materials - if there is an appreciation more expensive competitive disadvantage for businesses

Question 8

What is global competitiveness?

Answer 8

Ability for business to compete perform better than rivals across different countries

Question 9

What can influence global competitiveness?

Answer 9

Fluctuation in exchange rates

Question 10

What is currency appreciation?

Answer 10

A currency has increased against an of a currency

Question 11

What are the positives and negatives of an appreciation?

Answer 11

import raw materials from abroad ? i cheaper - increase profit margin

Question 12

What is the disadvantages of appreciation?

Answer 12

Export? - expensive

fall in sales
Demand shift to domestic products

Question 13

What is currency depreciation?

Answer 13

Value of one currency has decreased against another currency

Question 14

What are the advantages of depreciation?

Answer 14

if a business exports , they become more competitive because it becomes cheaper to purchase

Less Competition in domestic markets as imports are expensive

Question 15

What are the disadvantages of depreciation?

Answer 15

If you import raw materials from abroad, they become more expensive

Question 16

What kind of global operation bring?

Answer 16

Bigger economies of scale

Question 17

What are the three significant changes in the exchange rate on businesses?

Answer 17

Elasticity of demand -inelastic full price would only have a small increase in demand

economic growth of countries - if a country is in a recession demands for their economic exports are weak

significance of the cause of fluctuation in exchange rates- if the pound increases because there’s been an improvement in efficiency and productivity - more demand

If not - other weakness of other businesses business will be uncompetitive due to the increase in the pound

Question 18

What made business is used to counteract fluctuations in exchange rates?

Answer 18

Fixed contacts - temperature changes - to the exchange rate will have small impact onto the business lessens uncertainty

Question 19

What is economic risk?

Answer 19

Risk that future cash flows will change - due to unexpected exchange rate fluctuations

Question 20

What are the two factors that provide competitive advantages?

Answer 20

Porters generic strategies

Cost leadership and differentiation

Question 21

What is cost leadership?

How can this be utilised?

Answer 21

What a business reduces the cost of their production

Can become cost leader if they reduce their prices or keep it the same to increase profit matches

Question 22

How many may cost leadership be achieved?

Answer 22

Increase the productivity of the workforce

using machinery or technology efficiently

outsourcing

offshoring

capacity utilisation

Question 23

What is differentiation under
Porters strategies?

Answer 23

When the business differentiate its products from competitors 

Question 24

What are the main impact of skill shortages? what made this effect and lead to ?

Answer 24

If they are unable to find a labour with required skills - affect their ability to gain a competitive advantage - may not be as productive increasing costs due to waste

Question 25

What is less likely to occur if there’s a skill shortage?

Answer 25

Product differentiation - unable to highly different shape products

Question 26

How may a business overcome skill shortages?

Answer 26

outsource or offshore to access skills needed

Question 27

What are the five ways to control MNCs?

Answer 27

Political influence Legal control Taxation policy Pressure groups social media

Question 28

What are political influences?

Answer 28

Political institutions enforce laws and regulations which businesses need to adhere to

Question 29

What should MNCs do under political institutions?

Answer 29

work within the institutional framework of that country

Question 30

What can MNCs do to local governments under political influences?

Answer 30

exert pressure on national governments through lobbying - create favourable conditions for their business

Question 31

What are the positive negatives about using political influences to control MNCs?

Answer 31

Positives can create manage and end businesses Help elected officials to challenge the power private businesses Negatives facilitate corruption Can lead misallocation of capital

Question 32

What is legal control?

Answer 32

Governments can enforce legislation and regulation to control the operations of MNCs

Question 33

what does legal control to prevent?

Answer 33

Anti-Competitive or unfair practices

Question 34

Why do governments want MNC through legal control?

Answer 34

Allows them to boost their economy creating legal control in areas relating to taxes and employment ensures stability for the MNC

Question 35

What are pressure groups?

Answer 35

An origination operate to influence company and public policy

Question 36

What are the three ways pressure groups can take action?

Answer 36

Naming and shaming - Businesses ethics are promoted through publicity and naming a shaming - unethical businesses- threatening reputation direct action- demonstrations protests can sabotage business operations lobbying - taking issues directly to the government

Question 37

How does social media control MNCs?

Answer 37

Allows stakeholders to share information about the unethical behaviour of MNCs -forced to address the issues raised on social media - high level of public exposure and information can spread rapidly

Question 38

How many MNCs use social media to their advantage?

Answer 38

spread awareness and promote their business on a global scale

Question 39

What may MNC’s influence on social media be and why?

Answer 39

limited in some countries as they have regulations in place to manage social media power

Question 40

What are the four benefits of using pressure groups to control MNCs?

Answer 40

Enlists committed people, including volunteers Social media involved - enlist very quickly- gather + engage Raises issues that may not become public knowledge Alert politicians when it becomes concern to the public

Question 41

What are the three drawbacks of using social media pressure groups to control MNCs?

Answer 41

Campaign can become ill informed or misguided Direct action can lead to violence or miscarriages of justice Information goes viral, impossible to control

Question 42

How many taxation policies control MNCs?

Answer 42

Countries can maintain low corporate taxation to attract for a direct investment

Question 43

Why are vinyls growing in popularity? 

Answer 43

Collectability - some records are seen as collectors items worth a lot of money authentic listening experiences more authentic streaming the cracking sound as to the experience can be touched long life investment aesthetics appeal to new audiences younger gen record store date a music festivals DJ a music production the growth of these retailers People like to frame it and put them on walls