What’s an emerging economy??
An economy in the process of rapid growth & industrialisation!
What are 4 common features if emerging economies??
- Rapid industrialisation
- Faster long-term economic growth than most developed economies
- Many inhabitants still in poverty, though economic growth is taking many out of poverty
- Businesses struggle to access global markets
What’s protectionism??
Government policies that restrict international trade to help domestic industries!
What’s BRICS??
5 examples of emerging economies!
Brazil
Russia
India
China
South Africa
What’s MINT??
4 examples of emerging economies!
Mexico
Indonesia
Nigeria
Turkey
What are 3 impacts of economic growth on businesses??
- Potential more profits (new markets and more customers)
- Reduced costs of production (cheaper labour and raw materials in emerging economies)
- Increased trade opportunities (more demand for goods and services)
What are 3 impacts of economic growth on individuals??
- Reduced unemployment (more demand means more labour needed to increase output)
- Increased average incomes
- Access to quality public services (more tax revenue is generated for government can improve public services)
What are 4 key risks of doing business in emerging economies??
- Heavy reliance on exports exposes to external shocks
- Political uncertainties
- Variable approaches to financial & legal dealings
- Low-cost production makes developed economies uncompetitive in some markets
What’s glocalisation??
Product or service that is developed and distributed globally but also adjusted to accommodate consumers in a local market!
What are 3 reasons that emerging economies are likely to continue to have high growth rates??
- Industrialisation
- Rise of middle classes
- Workforce will improve skills & be more productive
What are the 4 key indicators of growth??
- Gross Domestic Product (GDP) per capita
- Literacy (determines quality of workforce and customers)
- Health (has impact on quality of the workforce)
- Human Development Index (HDI)
What’s Gross Domestic Product (GDP) per capita??
Calculated by diviing the total output of a country by the number of people in that country!
High GDP per capita is associated with a high standard of living
What’s the Human Development Index (HDI)??
Combines life expectancy, education and income to determine quality of development of citizens within a country!
However…
- It doesn’t account for inequalities in a country
- There’s a lack of reliable data in certain countries
What’s international trade??
Exchange of products (goods & services)
-> Trade doesn’t take place between countries, it takes place between businesses and consumers
What are 3 benefits of international trade??
+ Jobs help reduce poverty
+ Technology is spread, improving productivity
+ Knowledge & skills cross borders
What are 3 drawbacks of international trade??
- Transport costs
- pressure on wages & working conditions
- Carbon footprint (from longer transport)
What are exports and imports??
Exports = Arise as a function of international trade whereby products produced by one country are sold to another country
Imports = Opposite of exports, products brought into one country from another
Give 2 places where UK exports go!
15% go to US (machinery, transport equipment)
9.7% go to China (gold, cars, pharmaceuticals)
Why are some countries better at producing certain goods or services than others??
- Relative opportunity cost of production is lower than in another country
- A country is relatively more productively efficient than another
Specialisation is also important!
Give 2 examples of specialisation!
Bangladesh for tactiles
Angola & UK for crude oil
What is Foreign Direct Investment (FDI)??
Investment from one country into another (normally by companies rather than governments) that involves establishing operations or acquiring tangible assets, including stakes in another business.
Which country is the largest recipient of inward FDI flows??
USA
What’s free (open trade)??
Economic policy of not discriminating against imports from and exports to other countries. Buyers & sellers from separate economies may trade without the domestic government applying tariffs, quotas, subsidies or prohibitions on their products
What are benefits of free trade?? (aka arguments against protectionism)
- Countries benefit from comparative advantage (certain countries have cheaper products compared to others, consumers know where they can get cheaper products)
- Economies of scale
- Encourages competition & economic efficiency
- Enables businesses to grow beyond domestic borders
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3.1.1 Corporate Objectives10
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3.1.2 Theories of Corporate Strategy31
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3.1.3 SWOT Analysis & 3.1.4 Impact of external influences30
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3.2 Business Growth21
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3.3 Decision-Making Techniques44
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3.4 Influences on Business Decisions42
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3.5 Assessing Competitiveness16
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3.6 Managing Change30
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4.1 Globalisation38
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4.2 Global Markets & Business Expansion28
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4.3 Global Marketing24
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4.4 Global Industries and Multinational Corporations5
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Pre-release: Current trends in consumption of confectionery9
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Pre-release: Business growth and different businesses in the confectionery industry10
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Pre-release: External business environment and its impact on small businesses in the confectionery industry12
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Pre-release: Economic influences on confectionery businesses4
