Theme 4 Flashcards
(39 cards)
What are the BRICS?
Brazil Russia India China South Africa - ranked among the world's fastest-growing emerging market economies for years, thanks to low labour costs, favorable demographics and abundant natural resources at a time of a global commodities boom.
Economic growth?
An increase in a country’s productive capacity
Emerging economies?
The economies of developing countries where there is rapid growth, but also significant risk
Human Development Index (HDI)?
A collection of statistics that are combined into an index, ranking countries according to their human development
Literacy rate?
The percentage of adults (over 15) that can read and write.
Purchasing Power Parity (PPP)?
A measure of real growth the uses the price of purchasing a standardised basket of goods and services in order to compare prices across economies
Comparative advantage?
The theory that a country should specialise in products and services that is can produce more efficiently than other countries.
Competitive advantage?
The idea that a business should specialise in any area (products, services, management, research etc.) where it can perform better than its competitors
Division of labour?
Different workers specialising in different productive activities
Foreign Direct Investment (FDI)?
Investing by setting up operations or buying assets in businesses in other country
Possible reasons for international growth?
- Benefit from EOS
- Risk spreading - Ansoff - Market Development
- Labour productivity - costs - avaliable skills
- Revenues - domestic growth exhausted - saturation and mature
- Competition from domestic markets
- Saturated markets
- Market power and share
Factors that contribute to globalisation?
- Containerisation
- Technological change
- Economies of scale
- Differences in tax systems
- Less protectionism
- Growth strategies of TNCs and MNCs in pursuit of revenue and product growth
- Infrastructure
Whats an ethnocentric approach?
.
Whats an polycentric approach?
.
Whats an geocentric (mixed) approach?
.
What are the 4 MINTS?
what the economies have…
MINT members are Mexico, Indonesia, Nigeria and Turkey. Similarly to BRICS ,the four MINT nations have been identified as emerging economic giants.
The MINT economies all have large and growing populations with abundant numbers of young people of working age.
What is offshoring?
Offshoring is where a business relocates all or part of its operations to another country, e.g. functions such as production, customer service, and finance. More on this in Section
What demand will be like in emerging economies?
Demand in emerging economies is likely to be income elastic, providing opportunities for increased revenue and profitability.
Why countries import and export?
Many products and services cannot be offered by the domestic economy for various reasons, e.g. climate; whereas others are more cost-effective to be produced outside of the country due to specialisation.
What is specialisation?
Specialisation is where a country, or group of countries, focus on the production of a specific or limited range of products and/or services.
The aim of specialisation?
The aim of specialisation is to maximise the efficiency of the production process, thereby creating a range of benefits
Benefits of specialisation?
2…
Lead to comp…
- Lower unit cost, which then allows a business to reduce its prices or increase profit margins.
- Leads to local clusters of workers with expert professional skills/experience.
- -> The competitive advantage will enable the business to either reduce the price of its products compared to rivals or alternatively differentiate itself to justify a higher price than rivals
What is FDI?
It is a measure of foreign ownership of land, factories and organisations, leads to inward capital investment.
What is globalisation?
globalisation is the process through which economies–and, therefore, domestic businesses–integrate into global markets.
