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globalisation Flashcards

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1
Q

what is globalisation

A

how interconnected the world is
resulted in businesses operating in several countries across the world

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2
Q

GDP

A

gross domestic product
idicates size of nations economy
total makret value of goods and services within a market over a period of time
expressed per capita-meaning GDP divided by number of people in country
measures economic performance of a country

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3
Q

other indicators of growth

A

literacy rate-literacy rate people over 15 year old

health-

human development index-average incomes

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4
Q

economic growth

A

when economy growing, increase in demand for products

increase in employment opportunities

increase in peoples disposable income

people move out of poverty

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5
Q

what is an emerging economy

A

economy which is growing but not yet fully developed

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6
Q

examples of emerging economies

A

MINT

BRICS

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7
Q

international trade

A

importing and exporting

imports-products brough from overseas
money goes back to foregin business who brought it from
money flowing out of an economy

exports-products sold from overseas
money given by person who brought it too
money flows out of an economy

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8
Q

specialsiation

A

way to gain a competitive advantage
where busiensss narrow down range of products focuing on one or narrow range

adv-increases producivity and efficiency due to workers becoming skilled at making those specific products
speed they are produced and quality they are produced at increase

reduces cost per unit, allows price to be reduced, profit margin to be increased

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9
Q

dis of specialisation

A

changes in consumer trends, effect more as less to fall back on

extensive training to become specialsed at narrow range of products

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10
Q

foregin direct investment

A

where one business invests into another business

need some type of managerical control

adv-increases access to makrets

first knowledge of nations legal system

advnatge of skilled local labour

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11
Q

trade liberslaition

A

removal of restrictures or barriers of trade

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12
Q

adv of trade libersliation

A

increases consumers choice

exports cheaper

raw materials are cheaper

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13
Q

dis of trade liberlisation

A

may force out smaller firms or doemtic firms out of business as not comeptiev enough

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14
Q

plotical change

A

government might change political system to one which supports trade liberilsation

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15
Q

strutural changes to economic developemnt

A

primary industries-obtaining raw materials
secondary-manafacturer goods
teritary-finanical and health services
quarternary-it knowledge based services

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16
Q

more people in the world are able to work

A

world population increasing, people living and working longer, more women at work
more people at work, people have more freedom to set up business operations wherever they want

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17
Q

protesctionism

A

where government helps protect domectic frims from foregin competiton

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18
Q

way of remember ways sof protectionsim

A

Social
Learning
Therory

subsides-fixed sum of money paid by government to help domestic firms
adv-can reduce their costs making them have lower pcires then inmports

dis-people having to pay more tax

legisaltion-laws placed by government to stop international trading
trade embaragos-banning trade altogtehr
trade sanctions-restricting trade

tarrifs and quotas
tarrifs-tax paid on particlar imported goods making peoople less liekly to import more
quotas-placing limits on amount of imported goods that can come into country

adv-helps domestic frims as face less compeition
dis-restricts consumer choice nad means customers may have to pay more for products
dis-lack of competition may remove incentive for domestic firms to imporve efficiency and quality

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19
Q

trading blocs

A

signed legal agreements betweeen several coutnerires to restict or remove trade barriers

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20
Q

adv of trading blocs

A

being cheapest supplier in bloc

avaliabilty of skilled workers

access to new markets

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21
Q

dis of trading blocs

A

change regualtions to ones that fit trading bloc

smaller firms in trading bloc may be pushed out

buying products which are not within trading bloc may become more expensive

expensive to import products from counteries not within the bloc

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22
Q

push factors

Study These Flashcards
A

negative effects in the domestic market

saturated makrets-wherer all demand is met, theres not much chance to grow
moving may create chance for new access to markets
moving to unsaturated overseas market may mean increase in sales

competition-may be highly compeitve where currently located
may be less demadn for prodcut in place aborad

23
Q

pull factors

Study These Flashcards
A

postive factors about overseas markets

spread of risk-if demand goes down in one country, have less of an impact as oculd be high in another country

economies of scale-reduce their unit costs

24
Q

why would moving abroad increase a products life cycle

Study These Flashcards
A

product may be in decline stage in one country but growth stage in another

25
offshoring
branching out deparments into other counteirs adv-imports andd exports cheaper access of new skilled workforce reduces costs
26
reshoring
moving departments back may be due to consumers noticing that busienss is exploting its workers adv-easier to manage importing and exporting is quicker as within same country
27
what are the non financial benefits to a country
improve working conditions and pay, increasing standards of living imporves infrastructure, imporving community
28
dis of moving to another country
job losses and unemployment in orginal country
29
outsourcing
contracting out business acitivities to other businesses adv-reduced costs as not having to pay for full time workers adv-might be able to accept contracts that they may have turned down dis-cant monitor so chance that they produce something of low quality, negatively impacting repuation of business
30
assessing a country as a market
how much disposable income country has-HIGH disposbale income so more people willing to spend rather then save cultures and languasges simialr-therefore avoids any cultural and lanaguage barriers laws-large amounts of regualtions coculd make trading more complicated infrastrastructure-good infrasturcture if not may ahev to then spend moree money on imporving it poitical stability-whetehr its politcally stable or not if not, then peopels employment may be consistneyl changign and dont know how much money people will have exchnage rates remember-pile DC
31
assessiing a country as a production location
PIC political stability-is it politically stable infrastructure-want imports and exports to be easily trasnported back adn forth costs of production-often mean moving to country where pay forgin workers much lwoer wages then would with UK employees useful for businesses who dont need skilled workforce land and office space also tends to be cheaper
32
globa merger
two businesses from different counteries merge togeterh to create one business
33
joint ventures
where 2 businesses remain as seperate entitiys but work on a joint project togetrh where two or more businesses work togeteh on a joint project they tehn share profits and equitys
34
adv of being merger or joint venture
Spreading of risk-could have high risk of making costly kistakes moving into a busines it has little knowldge off other business can help it by bringing good knowledge of local makret, consumer trasks etc fall in demadn in one country will have less of an effect as could sgitll remain high in another country Access to different markets-increases amount of consumers selling too Securing resources and supplies-might ahve god relationship with a particualr supplier tgat the other firm might want, therefore beneficial to business can obtain intellectual property-e.g copyrigths and patents which help protect business from being copied by others beat competion-can join or mergw with competion meaning removes coemptior out of market can achive eEOS, creating comepittive advanatbe to business acroyn: SAS
35
what ways can businesses imporve their compeitive advnatge in global competiton
generic stragies cost leadership/competitiness-being cheapest achieve EOS difefrentiation-have USP
36
what are the 3 types of global marketing stratgeies
ethnocentric polycentric genocentric
37
ethnocentric approach
keeping mareting strategy simailr everywhere adv-global more liekly to become loyal adv-same products everywhere, acheive EOS adv-less time and money spent on makret research make it easier for firms to deal with suppliers and distibutors as well known dis-risk of culture clashes any negativity in one country can impact global brand
38
polycentric approach
changing marketign stragey in each country to suit needs and wants of international makrets adv-guaranteed sales as you know its suited to target audience adv-no risk of culture clashes dis-expensive as need lots of makret research and time consuming fewer chances to reach EOS
39
geocentric approach
mixture of both having global focus of ethnocentric approach but also identifying local factors under polycentric approach adv-eos, global makes easier to supply and distbiibute as well known dis-expensive to adapt
40
product of global niche markets
level of expertise increase quality
41
price
can charge higher prices as specialsied
42
promotion
43
adv of global niche markets
face minimal competition, higher customer loyalty products tend to be price ineasltic so can charge more premium prices risks can be spread across many markets
44
dis of global niche markets
low salves volume in cpmparison to mass markets risk is high, fall in supply in one country can mean firms struggle to survive
45
culture clashes
use makret research to assess social norms in a country can adpat marketing mix to different cultures
46
should also consider anguages wgen makreting abroad
making sure languages are right and are not misundersootf or inappropriate or offensive to consumers may need langauge translators which can be expensive
47
what are MNCS
businesses which operate in several counteries
48
adv of MNCS on local economy
creates jobs increases standard of living, reduces unemployment improve infrastructure
49
dis of MNCS on local economy
may explot their workers as see LEDS as a chance to pay lower wages due to less strict laws increase pollution in country
50
transfer pricing
where a busienss purposely charges higher prices to the counteirs they operate in with a lower tax rate adn then lower prices to counteries they operate in with higher tax rate this way they are gainign more profit, and gaining less tax to pay
51
adv of MNCS on national economy
bring in it skills so once person leaves busienss, skills can then be transferred to other businesses increase amount of entreprenurs as people can work out that they are capable of setting up their own business imporvents FDI flows-increases amount of money flowing into and out of business icnreases balance of payments imporves balance sheet
52
dis of MNCS on national econom y
may force domestic firms out of business
53
what are ethics
rules and principles that state which bheaviours are acceptbale for society, individuals and groups idea that mncs may take advnate of less strict rules in LEDS and decide to explout wrokers, lower working conditions and poorer pag spening less on safty equipment poor sanitation
54
what are the 3 ways of controlling MNCS
government legisaltion-laws set by goverment to contorl MNCS pressure groups-gorups of people who want to change behaviours of businesses adv-raise awareness of issues quickly, prtcilaurly using soical media dis-may not have ability to stop excessive behaviour, making them hve bad reputation and weaknening their influence against MNCS social media adv-quickly shares info about unethical practices shared to wide amount of epeole dis-not good in long term, people just scroll and move past it, may forget it within a few seconds GPS

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