Theme 4 Global Business Flashcards
(100 cards)
1
Q
What is Globalisation?
A
Increase in how interconnected the world is
2
Q
What does Global Trade impact?
A
Firms and consumers in one country can affect the economies of other countries
3
Q
LEDCs stand for?
A
Less Economically Developed Countries
4
Q
MEDCs stand for?
A
More Economically Developed Countries
5
Q
What does GDP stand for?
A
Gross Domestic Product
6
Q
What is GDP?
A
Total market value of good and services produced within a nation over a period of time
7
Q
What does GDP indicate?
A
Size of Nations Economy
8
Q
How is GDP expressed?
A
per capita
9
Q
What is literacy rate?
A
The percentage of the population that can read and write
10
Q
WHO stand for?
A
World Health Organisation
11
Q
HDI stand for?
A
Human Development Index
12
Q
What are the four factors indicating economic growth?
A
GDP
Literacy Rate
Health
The Human Development Index (HDI)
13
Q
What is an emerging economy?
A
Fast growing but not yet fully developed
14
Q
What is BRICS and MINT?
A
Countries with emerging economies
15
Q
What countries are in BRICS?
A
Brazil
Russia
India
China
South Africa
16
Q
What countries are in MINT?
A
Mexico
Indonesia
Nigeria
Turkey
17
Q
What is international trade?
A
Importing and Exporting
18
Q
What are imports?
A
Products brought from overseas
19
Q
Advantages of imports?
A
Increase variety of goods and services in a country
May be cheaper then domestic goods and services
20
Q
What are exports?
A
Products sold overseas
21
Q
Advantage of exports?
A
Increase market size
22
Q
What is competitive advantage?
A
Something that allows a business to generator more sales then its rivals
23
Q
What is Specialisation?
A
When a firm focuses on producing one product (or a very narrow range of products)
24
Q
Advantages of Specialisation?
A
Improves efficiency
Workers become highly skilled
Speed product made is increased
Quality of product increases
25
Disadvantages of Specialisation?
Risk losing sales if there is a decrease in demand
Increase cost of training staff
26
FDI stand for?
Foreign Direct Investment
27
What is FDI?
Is when a firm in one country invests in a business in another country
28
What does it mean when FDI is horizontal?
Firm invests in a foreign business that is at the same stage of the production process as the business in their country
29
What does it mean when FDI is vertical?
Where firm invests in a foreign business that is in a different place in the supply chain to its original business
30
Examples of FDI?
Merger
Take over
Open office or branch overseas
31
Advantages to FDI?
Access to new markets
Access to skilled local labour
Overcome international trade barriers
First hand knowledge (legal system)
32
What are trade barriers?
Things that make trade between different countries more difficult or expensive
33
Examples of trade barriers?
Procedures
Regulations
Tariffs
Quotas
34
What is trade liberlisation?
Removal of trade barriers
35
WTO stand for?
World Trade Organisation
36
What does WTO do?
Negotiate trade agreements and promotes trade liberlisation
37
Advantages of trade liberlisation?
Raw material imports will be cheaper
Exporting goods becomes cheaper/easier
Increased competition
38
Disadvantage of trade liberlisation?
Force domestic businesses out
Removal of natural culture
39
Different type of industries in the economy?
Primary
Secondary
Tertiary
Quaternary
40
Primary industries?
Concerned with obtaining raw materials
41
Secondary industries?
Manufacture goods from raw materials
42
Tertiary industries?
Services
43
Quaternary industries?
Knowledge based (IT or scientific research)
44
MNCs stand for?
Multinational Corporations
45
TNCs stand for?
Transnational Companies
46
Causes of increased Globalisation?
Transport and Communication cheaper
More people able to work
People are more likely to migrate
Political change
47
What is Protectionism?
Government protects domestic businesses and jobs from foreign competition
48
Types of Protectionism?
Tariff and Quotas
Government Legislation
Domestic Subsidies
49
Definition of tariffs?
A tax that has to be paid when certain products are imported into a country
50
Definition of quotas?
Government limits volume of particular products that can be imported into a country
51
What are domestic subsidies?
Sums of money provided by the government to domestic firms in a certain industry
52
What are Trade Blocs?
Agreement between different countries to reduce barriers of trade
53
Types of Trading Blocs?
NAFTA
ASEAN
EU
54
What does NAFTA stand for?
North American Free Trade Agreement
55
What does ASEAN stand for?
Association of Southeast Asian Nations
56
Advantages of Trading Blocs?
Removal of Trade Barriers
Greater Competition
Fewer Regulations
Expanding market
57
Disadvantages of Trading Blocs?
Domestic businesses at risk
Increase Unemployment
58
What is a push factor?
Motivates a firm to look at business opportunities in other countries
59
What is a saturated market?
All consumer demand has been or is being met
60
What is a pull factor?
Something which makes it attractive for a business to trade abroad
61
Examples of pull factors?
Lower production cost
New markets
Lower material cost
62
Offshoring meaning?
Means moving parts of a business to cheaper countries
63
Reshoring meaning?
When a business moves departments back to its country of origin
64
Outsourcing meaning?
When businesses contract out some activities to other businesses rather then doing them in-house
65
Advantages of outsourcing?
Specialised knowledge and reduce costs
66
Disadvantage of outsourcing?
No control over quality produced
67
What will a business look at before entering a countries market?
Exchange Rates
Infrastructure
Political Stability
Ease of doing business
68
Five factors business will consider when locating production in another country?
Costs of Production
Skilled Labour
Infrastructure
Trading Blocs
Ease of doing business
Natural Resources
Political stability
69
What is a joint venture?
A legal agreement between two or more firms to work together on a joint project
70
What is a global merger?
When two or more firms in different countries agree to become a single business
71
Definition of cost competitiveness?
When a business has relatively low cost compared to competitors, allows it to charge lower prices
72
Advantages of cost competitiveness?
Attract customers
Increase firms market share
Force competitors out
73
Definition of Differentiation?
Product has unique features that are not possessed by competitors
74
What is appreciation of the currency?
Currency rises in value
75
What happens when currency appreciates?
Exports will become expensive and will make business less competitive with that currency
Imports will become cheaper
76
What is depreciation of the currency?
Currency falls in value
77
What happens when currency depreciation?
Exports become cheaper and and will make business more competitive
Imports will be more expensive
78
Definition of Ethnocentric approach?
Similar market strategy in each country
79
Advantages of Ethnocentric approach?
Economies of scale
Less time and money
Maintain global brand
80
Disadvantage of Ethnocentric approach?
Different countries have different preferences meaning product may not sell well
81
Definition of Polycentric approach?
Uses different marketing strategies in each country
82
Advantages of Polycentric approach?
Adapt to different countries wants and needs
Ensures sales
83
Disadvantages of Polycentric approach?
Less likely to get economies of scale
Expensive market research
Expensive to make new product
84
Definition of Geocentric approach?
A mix between the other approaches
85
Ansoff matrix?
Market Penetration
Market Development
Product Development
Diversification
86
Definition of cultural diversity?
Presence of different cultural groups in society
87
Global Niche Markets advantages?
Minimal competition
Customer loyalty
Price inelastic
Maximise product
88
Global Niche Market disadvantages?
Low sales volume
Fall in demand in one country
89
What is a MNC?
A business that has branches and departments in more than one country
90
MNC positive effect on local economies?
Create jobs
Improve infrastructure
Employment means better standard of living
91
MNC negative effect on local economies?
Exploit workers or employ children
Cause pollution and waste
92
How can an MNC avoid paying tax?
Tax avoidance schemes
93
MNC positive effect on national economy?
Large FDI flow
Introduce new technology
Train staff
Economies of scale
94
Definition of FDI flows?
Flow of money into and out of the country from FDI
95
MNC negative effect on national economy?
Force domestic firms out
Loss of national culture
More money leaving the country
96
Definition of ethics?
Rules and principles that state which behaviours are acceptable for society, individuals or groups
97
What can influence MNC behaviour?
Government
Pressure groups
Social media
98
How can the government control MNC?
Legislation
Regulations
Tariffs and Quotas
99
What are pressure groups?
A group of people that want to change government policies or the behaviour of businesses
100
What can pressure groups use to spread awareness?
Social media
