Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business and Economics A2 > Unit 3- International Business > Flashcards

Unit 3- International Business Flashcards

1
Q

What is an absolute advantage?

A

the ability to produce more units of goods/services than some other producer using the same quantity of resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is comparative advantage?

A

the ability to produce a good/service at a lower opportunity cost than others.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what is free trade?

A

is where there are no restrictions within the economy and goods/services can be freely brought and sold.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

give 3 reasons why you would want to be ethical?

A
  1. improved relations with suppliers.
  2. having ethical produced products/services means higher quality.
  3. favorable media attention, leading to a greater brand image and competitive advantage.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what is protectionism?

A

stopping the amount of imports coming into the country, it reduces competitiveness.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

give 3 reasons for globalization?

A
  1. bigger storage for transpiration over sea’s.
  2. you will have better relationships with customers as you are spreading out your customer base.
  3. barriers have come down.
  4. real GDP per ca-pita has increased.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

give 3 reasons why you would want money coming into your country?

A

better economic growth.
lower unemployment rates.
can supply more goods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is an import?

A

goods brought into the country, money goes out the country to their suppliers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what is balance of balance?

A

the amount of money coming in/out of the country at a given time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

why have international markets become important to trade? (give 5 reasons)

A

km

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is globalisation?

A

It measures the input/output of trade throughout countries on an international scale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a stakeholder?

A

An individual or a group interested in a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Name 3 benefits of globalisation?

A

Wider choice throughout the world,
Lower prices,
Higher economic growth,
Creates more jobs and also higher quality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is a tariff?

A

A taxation on an import

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Define the product life cycle?

A

A product life cycle is the stages a product goes through in terms of sales such as; growth and maturity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Define global sourcing?

A

A procurement strategy where a business seeks to find the most cost effective way to make or sell a product.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Why would you want to global source, list 5 reasons?

A 
Land may be cheaper abroad.
Business could be cheaper.
Capital or labour cost may be reduced.
Newer technologies. Ie. America
Lower trade barriers such as the EU, therefore no tariff costs.
Cheaper manufacturers.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

benefits of a MNC, give 5 reasons?

A

creating employment for the countries. eg. increasing living standards and giving them more GDP per capita.
multiplier effect
creates greater tax revenue for the host country
provides a larger service and product range.
skills and technology transfer of countries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Cons of a MNC, give 5 reasons?

A

greater pollution (environmental impact)
effects small businesses within that community, may take their sales.
transfer cost of the MNC to the country.
exploitation of workforce- e.g. minimum wage or child labour.
cultural imperialism

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

why would you want to become a MNC in the first place??

A

market saturation in their current market.
profit.
extending their product life cycle.
accessing new markets.
reduce costs- benefit from economies of scale.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

factors that limit the power of being an MNC?

A

pressure groups/trade unions. e.g. environmental groups.
competition laws.
legal laws.
taxation on the MNC, coming to that country.
Media- publicity, showing they are unethical.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

why be ethical in the first place?

A

favorable media attention, leading to a better brand image and a competitive advantage.
having ethical goods/services means it will be of a higher quality.
it will improve relationships with suppliers and customers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

why not to be ethical?

A

higher costs (labour) effecting all stakeholders.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

with the assessments of country markets, what is the a cranium?

A 
PESTEL F
political 
economic 
social
technology
environment 
legal
financial
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

political factors to consider when moving elsewhere?

A 
taxations.
tariffs and quotas.
level of government intervention.
grants and subsides.
political stability.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

economic factors to consider when moving elsewhere? (List 5 reasons)

A 
unemployment levels.
inflation rates.
exchange rates.
size of economic growth.
population size.
GDP per capita
start up costs.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

social factors to consider when moving elsewhere? (list 5 reasons)

A 
communication links.
language.
religion differences.
pressure groups.
fashion and trends interest.
cultural differences.
media.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

technological factors to consider when moving elsewhere?

A

skills and technology.

capital availability.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

environmental factors to consider when moving elsewhere?

A

poverty.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

legal factors to consider when moving elsewhere?

A

laws
regulations.
embargo’s.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

financial factors to consider when moving elsewhere?

A 
payback
investment of government
taxation.
balance of payments.
net present value.
grants and subsides gained.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

why have new markets, in which to trade became important?

A 
cheaper cost of production
greater customer base
higher sales/profits/market share.
economies of scale.
no barriers .e.g Europe.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

what is global sourcing?

A

a procurement strategy when a business seeks to find the most cost effective way to make or sell a product.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

reasons for global sourcing?

A 
land/labour may be cheaper abroad.
newer technologies.
employees cheaper-lower minimum wage.
cheaper manufactures.
lower trade barriers.
specialization.
grants and subsides.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

what is outsourcing?

A

obtain (goods or a service) by contract from an outside supplier.

36
Q

what else matters when outsourcing?

A 
what product is being made.
availability of low cost labor.
transport costs.
where your customers are located.
how big the customer base is.
37
Q

the decision to be ethical depends on.. (list 5 reasons)?

A 
the decision of the stakeholders.
laws- are you breaking any?
cost itself of being ethical.
importance of the companies image.
level of exposure by pressure groups/green piece.
38
Q

define ethics?

A

is the embody of the moral value with the objective to do the right thing, acting with honesty and integrity.

39
Q

name 6 types of stakeholders?

A 
CEO
employees
customers
suppliers
government
shareholders.
40
Q

with low growth in domestic markets and increasing foreign competition, why is their an increase in foreign competition in home markets?

A 
domestic markets become saturated.
low trade barriers. e.g coming into the EU.
product no longer appeals to them.
increase number of customer base.
extending the product life cycle.
41
Q

assessing countries markets, factors you may consider? (list 15)

A 
level of GDP
government intervention
customer base size
population
access of resource
transportation links.
exchange rates.
interest rates.
inflation.
demand and supply factor.
health levels
maximum/minimum wage.
level of competition.
laws.
level of unemployment/employment.
communication links.
cultural differences.
taxes.
trade barriers
42
Q

what is organically?

A

the business goes to the new country and starts itself. e.g. Tesco and fresh and easy.

43
Q

what is inorganically?

A

when a business goes to a country and joins with another firm. e.g. joint venture, merger or take over.

44
Q

why do firms want to grow via mergers and take overs?

A

benefit from economies of scale, profit, synergy, risk, their market is saturated and little opportunity to grow, there is a more established customer base in that country and it can help with entering foreign markets where government regulations on a new business are strict.

45
Q

what is a synergy?

A

2+2=5, two firms joint together are better than one.

46
Q

problems with mergers/take overs?

A

expensive,
disagreements between both firms,
clash in management,
have to share the profits.

47
Q

why grow organically? (list 3 reasons)

A

..no cultural clashes as you are making the business yourself.
..easier to avoid diseconomies of scale.
..they want to keep their brand image intact, instead of merging with another company and they ruin theirs.

48
Q

name 3 benefits on UK individuals of the development of India and China?

A

..more choice range in products.
..creation of jobs opportunities in China and India, as they grow they may need our skilled workforce.
..as they are known for buying our luxury products, as these countries grow they will have more disposable income, so we will need to employ more people to make these products.

49
Q

name 2 drawbacks on UK individuals of the development of these countries? (India and China)

A

..less UK manufactures will be needed, as these countries are taking all the demand.

50
Q

name 2 benefits these developing countries will have on UK businesses? (India and China)

A

..larger target market for our exports.

..Joint ventures with these developing firms.

51
Q

name 2 drawbacks these developing countries will have on UK businesses?

A

..more foreign competition, they may see a fall in demand as they can produce cheaper goods abroad.
..we cannot meet there lower production costs, therefore we have to try sell our products at a lower price, meaning less profit

52
Q

Name 3 positives these developing countries will have on the UK economy?

A

..trade links.
..skills/technology transfers.
..more tax revenue, if they decide to come and manufacture here.

53
Q

Name 3 drawbacks these developing countries will have on the UK economy?

A

..environment damage- if these firms come to the UK, they could exploit our land. e.g. putting chemicals into the sea like BP did in Mexico.
..increased purchasing power and foreign investment- as these economies are growing, they can put more investment into purchasing raw materials for the future. which we may need.
.. balance of payments deficit- these developing countries effect what goes in and out of our country, as their products are brought/sold in the UK

54
Q

Name 5 advantages of trading with China?

A

…they have low costing manufacturing, which means they make larger profit margins.
.. newer technologies.
.. larger population to buy/sell goods and services.
.. market economy, with no democratic government so can do stuff whenever they want.

55
Q

methods of growth in global industries? (Name 5)

A 
mergers
takeovers
joint ventures
organic growth
inorganic growth
56
Q

problems with growing organically? (explain 3 reasons)

A

..it can be a slower process and more difficult to build market share.
.. you have to establish distribution channels.
.. R+D is done by the other firm, they could make cultural/language errors.

57
Q

name 3 drawbacks of being a joint venture?

A

..you have to share the profits with the other firm, growing organically you don’t.
..there could be communication barriers between both firms. e.g. a British and Chinese one.
..disagreements between both companies, could lead to being less productive.

58
Q

name 5 advantages of being a Joint venture?

A

..No excess R+D costs.
..Share the costs, therefore can buy more things at a higher cost as it is now spread out.
..Spreading out the risk..
..can use existing supply and distribution channels, this process cuts costs and is much quicker.
.. one firm may not have the local knowledge in one country, can benefit from local enterprise

59
Q

define global marketing?

A

global marketing refers to the marketing strategies used by businesses when operating in a global market.

60
Q

what are the marketing strategies?

A

price
product
place
promotion.

61
Q

what is an ethnocentric model?

A

a firm transfers their existing domestic business model to international business. this means that they see the foreign firms identical to domestic markets.
(they use only one strategy)

62
Q

benefits of international (global) marketing by using ethnocentric model (one strategy)? name 3 reasons.

A

..standardisation, leading to brand awareness as your product is the same on a multinational scale.
.. benefit from economies of scale (purchasing and risk bearing).
.. increased growth prospects- quicker processes.
..use of spare capacity- no excess costs spent. e.g. same revenue on goods/services.

63
Q

name 3 risks of only having one strategy? (ethnocentric model)

A

.. you cannot meet local/customer needs, so you won’t be as competitive against local businesses, who are better identified.
.. you could cause offence locally- cultural/language.

64
Q

what is the polycentric model?

A

an approach that considers each host country to be unique. the business develops their own unique business and marketing strategy in order to suit these particular needs. (many marketing strategy’s)

65
Q

what is the geocentric model?

A

can meet/local customer needs as you “adapt” your strategy to benefit the country. (Adapting strategy)

66
Q

the global marketing mix, why is the “product” the most important?

A

.. can be changed to meet local circumstances.

.. backwards innovation, make an older product simpler/ better design and sell them to a different market.

67
Q

the global marketing mix, why is the “price” the most important?

A

..breaking into new markets, you need lower prices to be competitive.
.. using penetrating pricing to be competitive.

68
Q

two reasons why you may put high tariffs on imported goods? e.g. host country to mcdonalds.

A

improvements in their balance of trades as they will be giving money towards the government which they can do social improvements etc.
..also, by putting high tariffs on goods/services, it will lead to higher pricing. meaning it could reduce their amount of competitiveness.

69
Q

what are commodities?

A

are raw materials or semi- manufactured products that are traded in bulk. e.g. iron ore, cotton and oil.

70
Q

define specialisation?

A

means that people or an economy, make the most of their skills by concentrating on what they do best. e.g. as skilled labour person produces more, output per head rises.

71
Q

what is the WTO (World Trade Organisation)?

A

it states to provide and regulate the international trading environment. its main objectives are to help freer trade and promote free trade, and encourage economic growth by reducing trade barriers.

72
Q

define the EU?

A

A collection of European countries which aim to co-operate on trade, social affairs and some laws.

73
Q

name 4 advantages of being in the EU?

A

..larger market, firms can gain from selling and buying goods/services.
..no tariffs and quota’s between it’s members. free trade and no constrictions.
.. free movement of labour, meaning any EU citizen can work in any country within the EU, without any laws being broke.
.. higher economic growth and a standard of living, as they work as a team, they will be buying/ selling more goods within the EU.

74
Q

name 3 disadvantages of being in the EU?

A

.. more competition, free trade is likely to bring more competition.
.. MNC’s could drive out local firms, as they can benefit from economies of scale they will drive out local firms. these MNC’s provide tax revenue and have a multiplier effect so will not be told to leave.
.. Job losses, increased competition and specialisation can lead to job losses. e.g. somewhere else in the EU, could produce the goods at a cheaper cost of production, meaning that business will fall.

75
Q

definition of a global niche market?

A

are a smaller, more specialised parts of a global market. where customers have specific needs and wants in a variety of countries.

76
Q

3 benefits of operating in a niche market?

A

.. can make higher profits, as they sell their goods/services for premium prices.
.. demand for these goods are price/income inelastic, they are seen to be essential to some customers.
.. reduced competition than mass marketing and also reducing the risk as you sell your goods to a smaller target market.
.. higher brand loyalty
.. can meet customer needs more than a mass market brand.

77
Q

3 drawbacks of operating in a niche market?

A

.. cannot benefit from economies of scale, as they are too much of a small firm.
.. niche businesses can be easily swallowed up by larger firms because they can set lower prices and can easily steal their ideas.

78
Q

why might a business seek international markets- moving else where? (give 5 reasons)

A

.. current market is saturated, therefore entering a new market to try gain sales and profit.
.. extend the product life cycle, a product could be at the end or maturity stage. therefore, selling the product/services to customers that have never experienced before.
.. can benefit from risk bearing economies of scale, they are spreading the risk. if one market doesnt work, they rely on the others to gain its sales.
.. benefit from global sourcing, gaining cheaper labour and cheaper production costs.
..

79
Q

name 4 benefits of specialisation?

A

..increases efficiency and output.
.. economies of scale gained as output increases.
.. competitive advantage enhanced.
.. goods can be produced more cheaply.

80
Q

name 4 disadvantage of specilisation?

A

over specialisation could lead to structural unemployment if demand should fall.
..can lead to over reliance from one area of the economy.
.. reliant on imports or other goods/services.
.. comparative advantage can move elsewhere.

81
Q

why would you want to put tariffs on stuff coming into your country? (3 reasons)

A

..protect domestic firms from being affected from foreign competition.
.. to raise tax revenue for the government and their economy.
.. used as a trade barrier to prevent imports coming in.

82
Q

give 3 reasons why international trading has increased?

A

…reduction in trade barriers.
…FDI (investing in a specific economy).
… developing countries- China/India.

83
Q

why would a government impose higher tariffs?

A

..protect infant industries.

.. good source of tax revenue.

84
Q

give 3 reasons why increased foreign FDI, will be good/bad for an economy?

A

good:
…job creation.
..more revenue coming into that economy.
…skills/technology transfer, helping infant industries.

negatives:
…increased foreign competition, as they might move here.
…could only be a temporarily move, which could effect that specific economy.

85
Q

explain 4 reasons why you would want to expand into a another market i.e. china/India.

A

…extending product life cycle.
…current market is satured.
…benefit from risk bearing EOS.
…wanting to increase revenue/profits.

86
Q

give 3 reasons why “brand names” are important/not important when trading abroad?

A

good reasons:
… brand recognition.
… repeat purchase.
… increased price in-elasticity- leading to more sales and revenue.

bad:
…may not translate well in their language- could be offensive.
…brand names may not be important.
… need 4 P’s- i.e. price/product- as they may need to change sizings in clothes.

87
Q

give 5 reasons why you want to be ethical?

A 
...increase brand image.
...high quality products.
...fairer wages- increased staff moral.
...can enhance a competitive advantage.
...increased brand loyalty.

Business and Economics A2 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions