4.2 Global Markets And Business Expansion Flashcards
(12 cards)
What are push factors?
Factors that prompt a business to move part of their business operations to another country as a REACTION to current market conditions
Saturated markets for push factors
Where there is little or no potential for growth in the home market
Competition for push factors
Too much competition in a domestic market
What is a pull factor?
Factors that encourage a business to be PROACTIVE and operate part of their business in another country
EOS pull factor
Expanding production via another country to reduce ACPU and helps margins
Risk spreading pull factor
Reducing dependence on one particular market (diversification)
What can conditions that prompt trade lead to?
- Extending product life cycle
- Offshoring and outsourcing
Assessment of a country as a market
When a business is looking to trade in another country
Factors to consider when assessing a country as a market
- Disposable income
- Ease of doing business
- Infrastructure
- Political stability
- Exchange rates
Assessment of a country as a product location
Looking to offshore production in another country
Factors to consider when assessing a country as a product location
-COST OF PRODUCTION (labour, RM)
- Skills and availability of labour force
- Political stability
- Ease of doing business
- Location of trade bloc market
- Infrastructure
- Natural resources
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