4.2 Global markets and Business expansion Flashcards
(14 cards)
1
Q
What is off-shoring
A
moving manufacturing industries to a part of the world with lower production costs
2
Q
pros of Off-shoring
A
- Lower Wage Rates
- Access to Raw materials
- Access to skilled workforce
3
Q
Cons of Offshoring
A
- Damage to reputation in home country
- Cultural + language barrier
4
Q
What is Outsourcing
A
Moving Business function to a specialist external provider in another country
5
Q
Pros of Outsourcing
A
- Allows business to upgrade
- Takes advantage of Country’s comparative advantage
- Access to specialist facilities (without fully investing)
6
Q
Cons of Outsourcing
A
- Reliance on Third parties (NO control)
- Cultural and language barriers
- business becomes less flexible, dependent on specialist provider
7
Q
What are factors that decide of a country should be a market
A
- growth in disposable Income
- ease of doing Business
- Developed infrastructure
- political stability
- stable Exchange rates
8
Q
Factors that decide of a country is a good production location
A
- Costs of production
- Skills + Availability of labour
- location in Trading Bloc
- Government Regulations
- developed infrastructure
9
Q
What is a Global merger
A
permanent agreement where two or more companies from different countries combine to one entity
10
Q
Pros of being in a global merger
A
- Econ of Scale
- New talent + expertise
- tech sharing
- Financial strength
11
Q
Cons of being in a global merger
A
- Cultural + communication barriers
- Integration difficulties
- Job losses
12
Q
What is Joint Venture
A
two or more companies agree to collaborate on a specific project, remaining separate entities
13
Q
Pros of a Joint Venture
A
- Access to new markets
- Sharing knowledge
- Shared costs and risks
14
Q
Cons of a Joint venture
A
- potential differences
- profit sharing
- dependence on partner performance
