Week 1 - internal and external environment of firms

Question 1

What is economics about

Answer 1

A social science that studies how individuals, businesses and governments allocate resources to mark choices that satisfy their needs and wants

Question 2

What is time, resources and businesses connected with

Answer 2

Scarcity (finite)

Question 3

What is opportunity cost

Answer 3

The cost of choosing one option resulting in the loss of the next best option

Question 4

What can incentives be (2 things)

Answer 4

Financial or non - financial
Encourage or discourage

Question 5

What is microeconomics concerned with

Answer 5

The behaviour of individual households, firms and industries

Question 6

What are the key topics associated with microeconomics

Answer 6

• supply and demand
• market structures
• consumer behaviour
• the role of government regulating markets

Question 7

What is an example of an microeconomic event in the UK

Answer 7

The rental cost crisis

Question 8

What is macroeconomics concerned with

Answer 8

Studies the economy as a whole, nationally or globally

Question 9

What are key macroeconomic topics

Answer 9

• GDP
• unemployment rates
• fiscal policy
• monetary policy
• exchange rates

Question 10

What is an example of a macroeconomic event in the UK

Answer 10

UK high inflation and cost of living crisis

Question 11

What are the 3 factors of the operational environment

Answer 11

• Suppliers
• customers
• competitors

Question 12

Departments involved with product decision making (5)

Answer 12

• production
• marketing
• research and development
• finance
• personnel

Question 13

Reasons for structural change in a business

Answer 13

• market dynamics
• global economic conditions
• competitive pressure

Question 14

What is the definition of globalisation

Answer 14

The process of integration on a worldwide scale of markets and production

Question 15

Factors leading to globalisation

Answer 15

• technological advancements
• reduction in trade barriers
• favourable economic policies
• international institutions

Question 16

Examples of international organisations

Answer 16

• The world bank
• The world health organisations

Question 17

What has been a negative of globalisation

Answer 17

The benefits of globalisation has not been shared equally globally

Question 18

What happens when countries are open to international trade

Answer 18

They experience faster levels of growth then countries that are not

Question 19

What do barriers to trade encourage industries to be

Answer 19

Uncompetitive

Question 20

Benefits of globalisation

Answer 20

• greater specialisation
• faster growth
• all businesses benefit

Question 21

Drawbacks of globalisation

Answer 21

• benefits not shared equally
• issue of equality and human rights and impact of environment

Question 22

Positives of globalisation on firms

Answer 22

• larger markets
• access to global talent
• innovation
• economies of scale

Question 23

Challenges of globalisation on firms

Answer 23

• increased competition
• complex supply chain
• cultural differences
• political risk

Question 24

The impact of globalisation on strategy

Answer 24

• diversification
• adaption to local tastes
• offshoring and outsourcing
• sustainability focus

Question 25

Reason for deglobalisation

Answer 25

- trade protectionism - supply chain disruptions - geopolitical conflicts - environmental concerns

Question 26

What is trade protectionism

Answer 26

Government actions and policies that restrict or limit international trade

Question 27

What is nationalism

Answer 27

a political ideology centered on promoting the cultural and identity of a nation, prioritising national interests over foreign influences

Question 28

What is populism

Answer 28

A political approach that seeks to represent the interest of ordinary people who feel they are being ignored by political establishments or institutions

Question 29

What are supply chain disruptions

Answer 29

Unexpected events or circumstances that interfere with the normal flow in a supply chain

Question 30

Examples of events that have/would disrupt a supply chain

Answer 30

- covid 19 - natural disasters - geopolitical tensions

Question 31

How can geopolitical lead to deglobalisation

Answer 31

Countries are becoming more aware and concerned with the economic dependence on rival nations e.g Europe are reducing their reliance of Chinese technology and manufacturing

Question 32

How might environmental concerns lead to deglobalisation

Answer 32

Global supply chains contribute significantly to carbon emissions, so some countries are prioritising local production to decrease their environmental impact