1
Q
What is globalisation?
A
The increasing integration of world economies through trade, capital flows, technology, movement of people and MNC expansion.
2
Q
Why is globalisation important for businesses?
A
It gives access to larger markets, increases competition, reduces costs through global production, and forces innovation.
3
Q
What are the key drivers of globalisation?
A
Trade liberalisation, reduced transport costs, FDI growth, increasing migration and MNC expansion.
4
Q
What are emerging economies?
A
Countries experiencing rapid industrialisation and rising incomes (e.g., BRICS, MINT).
5
Q
Why are emerging economies important for global businesses?
A
Fast growth markets + rising incomes (sales), plus lower costs (cheaper labour + resources) (profits) and diversification/first-mover advantage.”
6
Q
What are the risks of entering emerging economies?
A
Political instability, corruption, weak legal systems and poor infrastructure
7
Q
What does GDP per capita measure?
A
measures the average economic output (income) per person in a country used as a rough indicator of average living standards/spending power.
8
Q
Why do health indicators matter for assessing markets?
A
Higher life expectancy and lower mortality reflect a healthier, more productive workforce.
9
Q
What is HDI and why is it used?
A
Human Development Index measures education, income and health — used to compare long-term growth potential.
10
Q
What is international trade?
A
Exchange of goods and services across borders through imports and exports.
11
Q
What is specialisation?
A
When a country focuses on producing A good/service providing a competitive advantage
12
Q
Why does specialisation increase efficiency?
A
It reduces unit costs and increases productivity.
13
Q
What is FDI?
A
Foreign Direct Investment — when businesses invest capital into production or operations overseas.
14
Q
Why do firms invest overseas?
A
To access new markets, cheaper labour, lower costs, gain access to local resources/suppliers.
15
Q
What are the benefits of inward FDI for a country?
A
Job creation, technology transfer, skills development, infrastructure improvement, tax revenue.
16
Q
What are the drawbacks of inward FDI?
A
Environmental damage, worker exploitation,foreign ownership, profit repatriation.
17
Q
What are push factors for expansion?
A
Saturated home markets, declining domestic sales, rising competition, and economic downturns.
18
Q
What are pull factors for expansion?
A
“Access to larger, faster-growing foreign markets, economies of scale, diversification and cheaper resources.
19
Q
What is offshoring?
A
Moving production abroad to reduce costs or access skilled labour
20
Q
What are the advantages of offshoring?
A
Lower labour costs , access to raw materials and skilled labour, which helps the business to become more competitive
21
Q
What are the disadvantages of offshoring?
A
Loss of local home jobs, quality issues, language barriers, ethical concerns.
22
Q
What is outsourcing?
A
Contracting external firms to handle part of production or services.
23
Q
What are the benefits of outsourcing?
A
Reduces cost, increases flexibility, allows focus on core activities.
24
Q
What are the drawbacks of outsourcing?
A
Loss of control, reputational risk, possible lower quality.
25
what is a product life cycle extension strategy and an example of it?
Is a method used by a business to lengthen the life cycle of a product or service
eg. Selling declining products internationally where demand is still growing.
26
What 6 factors matter when assessing a country as a market?
Disposable income, growth rate, ease of doing business, infrastructure, exchnage rates , political stability.
27
Why is disposable income important in market selection?
It determines consumers’ ability to afford products.
28
Why does ease of doing business matter?
less strict Rules and regulations reduces time and costs of setting up operations.
29
What is the role of infrastructure in market attractiveness?
Better roads, transportation and communication allow for more efficent operations
30
Why is political stability essential for foreign entry?
Instability increases risk of not gaining ROI , corruption and government seizure.
31
What 9 factors matter when assessing a country as a production location?
cost of production,natural resources, high skill levels of labour , infrastructure, gov incentives, trade bloc membership, ROI , political stability, EODB
32
What are the benefits of producing in low-cost countries?
Lower unit costs, increased price competitiveness and higher profit margins.
33
What risks come with producing abroad?
Political instability, exploitation concerns, supply chain disruption.
34
What is a joint venture?
when two businesses join together to share their knowledge, resources and skills to form a separate business entity for a limited period of time
35
Benefits of joint ventures?
Risk sharing, market knowledge access, shared resources.
36
Drawbacks of joint ventures?
Culture clashes, profit sharing, disagreements.
37
Why do firms pursue mergers internationally?
To gain instant market access, increase market share, acquire technology or reduce competition.
38
What is global competitiveness?
A business’s ability to compete worldwide based on cost, quality, flexibility and innovation.
39
How do exchange rates affect global competitiveness?
Strong currency → exports expensive Weak currency → exports cheaper
40
What is a tariff?
Tax on imported goods designed to protect domestic industries.
41
What is a trade bloc?
A group of countries with reduced trade barriers between members (e.g., EU).
42
How do trade blocs support expansion?
Easier access to large markets and reduced transaction costs.
43
What is a global marketing strategy
is the process of planning, producing, placing and
promoting a business’s product or service in the global market
44
What is ethnocentric marketing?
Standardising the product globally with minimal local adaptation.
45
Advantages of ethnocentric marketing?
Economies of scale, consistent brand image, lower costs.
46
Disadvantages of ethnocentric marketing?
Cultural insensitivity, low local appeal.
47
What is polycentric marketing?
Adapting marketing strategies to fit local tastes, cultures and preferences.
48
Advantages of polycentric marketing?
Higher sales potential, better market acceptance.
49
Disadvantages of polycentric marketing?
Higher costs and more complex operations.
50
What is geocentric marketing?
Combining global efficiency with local responsiveness — 'best of both.'
51
Why is geocentric often the best approach?
Balances cost savings with local relevance.
52
What is glocalisation?
is a strategy where businesses aim to reach customers globally and also take into consideration the needs of the local market
53
Examples of glocalisation?
McDonald’s vegetarian menu in India; Nike region-specific campaigns.
54
Why does culture matter in global marketing?
Cultural norms influence product preferences, advertising, communication and branding.
55
Why must businesses adapt promotions abroad?
Different languages, humour, symbols, and values vary across countries.
56
What must businesses consider when setting global prices?
Income levels, cost differences, exchange rate volatility and local competition.
57
What are global niche markets?
Highly specialised customer groups spread worldwide with specific needs.
58
Why are global niches attractive?
Higher margins, customer loyalty, less competition.
59
How does the marketing mix change for global niches?
Higher quality, premium pricing, personalised promotions, selective distribution.
60
What is an MNC?
A multinational corporation operating in multiple countries with coordinated global strategies.
61
How do MNCs benefit local economies?
Job creation, infrastructure improvement, tax revenue and skill transfers.
62
What are negative impacts of MNCs on local economies?
Exploitation, environmental damage, crowding out local firms, profit repatriation.
63
How do MNCs support national economic growth?
FDI inflows, export increases, improved competitiveness, technological progress.
64
What is profit repatriation?
When MNCs send profits earned in foreign countries back to their home country.
65
Why is profit repatriation a problem?
Reduces local economic benefit.
66
What are the ethical issues associated with MNCs?
Sweatshops, child labour, low wages, unsafe conditions, pollution, manipulation of governments.
67
How can MNCs positively impact technology in host countries?
They transfer knowledge, modern machinery and advanced management skills.
68
How can governments control MNC behaviour?
Regulation, taxes, labour laws, fines, environmental standards and monitoring.
69
Why is controlling MNCs difficult?
They have high bargaining power, may threaten relocation, and can influence politics.
70
What are pressure groups?
Organisations that attempt to influence MNCs on ethical, environmental or social issues.
71
How do pressure groups affect MNCs?
They can damage reputation, force policy changes, or push for boycotts.
72
What are global competitive pressures?
Constant need to innovate, reduce costs, and maintain quality to compete worldwide.
73
How does the global environment affect pricing?
Exchange rates, transport costs, tariffs, and global supply chain prices.
74
Why do some MNCs move production frequently?
To chase lower labour costs, avoid tariffs, or access new markets.
75
What is CSR in global industries?
Corporate Social Responsibility — MNCs acting ethically in foreign markets.
76
Why is CSR important for global businesses?
Builds trust, avoids scandals, improves brand-image and prevents consumer backlash.
77
What is BRICS:
Brazil, Russia, India, China and South Africa
78
What is MINT:
Mexico, Indonesia, Nigeria and Turkey
79
What is Inward FDI
Inward FDI occurs when a foreign business invests in the local economy
80
What is outward FDI
occurs when a domestic business expands its operations to a foreign
country
81
What is Trade Liberalisation
Trade liberalisation is the removal or reduction of barriers to trade between different countries
82
Benefits of Trade liberalisation
Increased international trade allows businesses to increase their market size This leads to increased output, so countries can benefit from economies of scale
Freer trade helps businesses reduce costs, as imported raw materials and components can be sourced more cheaply
83
Drawbacks of Trade Liberalisation
Domestic firms, in particular infant industries, may not be able to compete against international firms
Some industries may be subject to dumping as businesses abroad may sell excess products at unfairly low prices
84
What is Protectionism
is when a government seeks to protect domestic industries from foreign competition
85
Use of a Tariff
A tariff increases the price of imported goods, which helps to shift demand for that product/service from foreign businesses to domestic businesses
86
Advantages of Tariffs
Protects infant industries so they can eventually become more competitive globally
Increases government tax revenue
Reduces dumping by foreign businesses, as they cannot sell below the market price
87
Disadvantages of Tariffs
Increases the cost of imported raw materials leading to higher prices,
Reduces competition for domestic firms, as they may become more inefficient and produce poor-quality products for their customers
Reduces consumer choice, as imports are now more expensive, and some customers will be unable to afford them
88
What is An import quota
An import quota is a government-imposed limit on the amount of a particular product allowed into the country
89
Advantages of An import quota
To meet the extra demand, domestic businesses may need to hire more workers, which reduces unemployment
The higher price for the product may encourage new businesses to start up in the
industry
90
Disadvantages of An import quota
Quotas limit the supply of a product, and whenever supply is limited, the price of the product rises
Domestic firms may become more inefficient overtime as the use of quotas reduces the level of competition
91
Whos part of USMCA
UnitedStates,Mexico and Canada
92
Whos part of ASEAN
Brunei , Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Tailand, and Vietnam
93
What are the benefits for businesses inside a trading bloc
Free movement of labour ,Wider markets ,external tariff walls
94
What are the Drawbacks for businesses inside a trading bloc
Increased competition damaging for small businesses , Common rules and regulations, Tariff retaliation ,Inefficiency due lack of competition form inside the bloc
95
What is a a global merger
is a permanent agreement between two businesses from two different
countries to join together
96
Impact of skill shortages on Product Differentiation
is less likely to occur if workers lack the skills and expertise to produce highly differentiated products
96
Impact of skill shortages on Cost Leadership
could be difficult to achieve if the workers lack skills, as they may not be as productive
97
How must place be adapted when marketing globally?
Businesses must choose the most suitable distribution channels for each market and consider available technology, such as the use of e-commerce.
98
How should products be adapted for global markets?
Firms may need to modify products to meet local needs and decide whether to use an ethnocentric, polycentric, or geocentric approach.
99
What factors affect pricing in global markets?
Pricing depends on customer incomes, costs of production, taxes, the stage of the product life cycle, and the state of the economy (boom or recession).
100
How must promotion be adapted for global markets?
Promotion must reflect language and cultural differences, and firms should choose the most effective promotional methods for each market, such as social media.
101
What is Ansoff's Matrix
is a strategic planning toolthat helps businesses identify potential
growth opportunities by analysing their product and market strategies
102
What is market penetration in global markets?
103
What is market development in global markets and what are the risks?
Market development involves selling existing products in new global markets. Risk is higher because businesses must adapt products to meet different customer needs and preferences, and may lack understanding of local consumer behaviour
104
What is product development in global markets?
Product development involves introducing new products into existing global markets. Businesses must research customer needs and adapt their marketing mix so new products suit local preferences, increasing risk compared to market penetration.
105
What is diversification in global markets and why is it high risk?
Diversification involves developing new products for new global markets. It is the highest-risk strategy due to limited knowledge of both the market and customers, requiring deep understanding of local conditions and consumer behaviour.
theme 4
flashcards
Decks in class (18)
# Cards
-
theme 4106
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4.1.1 GROWING ECONOMIES11
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4.1.2 INTERNATIONAL TRADE AND BUSINESS GROWTH6
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4.1.3 FACTORS CONTRIBUTING TO INCREASED GLOBALISATION7
-
4.1.4 PROTECTIONISM8
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4.1.5 TRADING BLOCS4
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4.2.1 CONDITIONS THAT PROMPT TRADE11
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4.2.2 ASSESSMENT OF A COUNTRY AS A MARKET6
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4.2.3 ASSESSMENT OF A COUNTRY AS A PRODUCTION LOCATION7
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4.2.4 REASONS FOR GLOBAL MERGERS OR JOINT VENTURES5
-
4.2.5 GLOBAL COMPETITIVENESS6
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4.3.1 MARKETING7
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4.3.2 NICHE MARKETS5
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4.3.3 CULTURAL / SOCIAL FACTORS5
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4.4.1 IMPACT OF MNCs7
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4.4.2 ETHICS6
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4.4.3 CONTROLLING MNCs5
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final theme 491
