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Business > theme 4 > Flashcards

theme 4 Flashcards

1
Q

list factors contributing to globalisation

A

reduction of international trade barriers
increased FDI
Reduced cost of transport and communications
growth of labour force

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2
Q

what is an FDI?

A

Investing by setting up operations or buying assets in business in another country

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3
Q

state the benefits of FDI

A

high potential of profits
avoid barriers to entry
acquires direct knowledge of local markets

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4
Q

what is an emerging economy?

A

economies in developing countries where there is rapid growth

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5
Q

list the acronyms of BRIC and MINT

A

Brazil, Russia, India, China

Mexico, Indonesia, Nigeria, Turkey

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6
Q

list indicators of growth

A

GDP
health
human development index: life expectancy, mean years of schooling

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7
Q

what is protectionism?

A

an approach used by a government to protect domestic abusers

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8
Q

list examples of protectionism

A

government legislation
tariffs
import quotas
subsidies

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9
Q

list the benefits of trading blocs

A

FDI
economies of scale
competition

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10
Q

what might encourage a firm to trade in another country (market)

A

levels and growth of disposable income
exchange rates
ease of doing business

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11
Q

what might encourage a firm to move production to another country?

A

cost of production
skills and availability of labour
political stability
natural resources

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12
Q

what are the pull factors that prompt trade?

A

economies of scale

risk spreading

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13
Q

what are the push factors that prompt trade?

A

saturated markets

competition

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14
Q

how do businesses merge globally?

A

liscencing: another firm using its brand for a fee

Franchising

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15
Q

what is the difference between offshoring and outsourcing?

A

offshoring: moving manufacturing/service industries to a location with lower costs
outsourcing: moving an entire business project to a specialist service provider

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16
Q

list the benefits of global mergers

A

brand loyalty
avoids high risk
limits competition

17
Q

list the reasons for global mergers

A

entering new markets and trade blocs

spreading risks over different regions

18
Q

what are the ethical considerations for markets?

A

misleading labelling

inappropriate promotional activities

19
Q

what are the ethical considerations for the environment?

A

emissions

waste disposal

20
Q

what are the ethical considerations for stakeholders?

A

consumers: misleading advertising
product safety
employees: pay and conditions
employee redundancies

21
Q

list the ways to control MNCs

A

pressure groups
legal control: taxation policy
political influence

22
Q

list the benefits of MNCs to countries they operate in

A

significant employment and training
transfer skills and expertise
adds to host country’s GDP through

23
Q

what is a MNC?

A

a business that has operations in more than one country

24
Q

list the drawbacks of MNCs

A

domestic businesses may not be able to compete
profits earned may be emitted back to MNCs home country
may use transfer pricing or tax avoidance

25
Q

what are some cultural/social factors affecting global businesses?

A

cultural differences
language
different tastes

26
Q

what are the features of a niche global market?

A

emphasis on quality
clear understanding of needs and wants
excellent customer service

27
Q

what are the implications of a niche global market?

A

higher prices->price inelastic
product is distributed through specialist retailers
products sold in small volumes

28
Q

what is a global niche market?

A

customers who live in more than one country and have particular needs that are not met by the global mass market

29
Q

what are the benefits of global competitiveness?

A

bigger economies of scale
closer to international customers
diversify risk

30
Q

what are the effects of exchange rates?

A

an appreciation will make exports more expensive

31
Q

how can a MNC achieve global competitiveness?

A

cost-competitiveness

differentiation

Business (4 decks)

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