International trade

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  • International trade
    • Access to more markets
      • This gives the potential for more sales, which will increase their profits, but also give them a bigger market share
    • Tariffs and quotas
      • This may limit the amount of goods the company can sell abroad, or decrease their profit margin
    • Growth
      • This will make the business more well known, so have a greater market share. They could also get economies of scale, which reduces costs
    • Language barriers
      • This can decrease efficincy, as the wrong products may be made. This increases costs, but also decreases customer satisfaction
    • Spreading risk
      • Less risk means the business is likely to be able to get a bank loan easier, so capital is easier to raise
    • Supply chain problems
      • This can lead to wasted costs, and decrease satisfaction if the wrong products are made
    • Exchange rates
      • This may make products more expensive in another currency, which increases costs, and decreases profits
    • More knowledge and employees
      • This means they can diversify, or strengthen areas that a weaker
    • Local laws
      • This could mean some of the products cannot be sold, or that sales won’t increase, especially if they contain banned ingredients. There could also be environmental laws
    • Labour costs reduce
      • Reduced costs means higher profits, so the business can be more competitive, or reinvest more
    • Imports: products bought into the country to sell
    • Exports: products sent to another country to sell

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