International Business Revision Unit 3

HideShow resource information
Preview of International Business Revision Unit 3

First 1076 words of the document:

Monday 6 January 2014
International Business Revision!
Unit 3 Business Studies
! Increased
compe++on
for
domes+c
producers
Common
external
tariff
outside
the
bloc
can
increase
cost
or
of
WHY DOES A BUSINESS SEEK INTERNATIONAL raw
materals
MARKETS?! Agreements
difficult(EU
and
UK)
Product
or
marke-ng
condi-ons
that
may
prompt
a
business
New
rules
etc
not
suit
all
businesses
to
trade
interna-onally
Trading
condi+ons
have
changed
!
Why
trade
is
increasing?
Trade
liberalisa-on
WTO
but
not
global
policmen
and
cannot
force
countries
to
Forma+on
of
trading
blocs
like
EU
cooperate
Reduc-on
in
Trade
barriers
like
tariffs
and
quotas
But
accused
of
favouring
the
richer
countries
at
the
expense
of
Push
Factors
developing
ones
Saturated
domes+c
market
Some
doubt
that
free
trade
&
liberalisa+on
are
the
best
Fierce
compe+on
in
domes+c
market
solu+ons
for
the
developing
na+ons
Compe++on
from
imports
Foreign
Direct
Investment
The
product
is
inthe
mature
or
decline
stage
of
the
PLC
Flow
of
FDI
increased
with
reduced
trade
barriers
Pull
Factors
Investment
mostly
from
developed
to
developed
countries
s+ll
Poten+al
for
increased
sales
and
profits
i.e.
extension
but
more
to
developing
countries
strategies
Associated
with
off
shoring
Economies
of
scale
Risk
spreading
!
Poli-cal
change
Global
sourcing
Breakdown
of
old
poli+cal
order
Increasing
trade
liberalisa+on
Collapse
of
Soviet
Union
and
communist
rule
inEastern
Europe
Expanding
trade
blocs
!
Global
Sourcing
1989
opened
up
areas
to
trade
Russia
became
one
of
BRICS
with
its
huge
reserves
of
Mineral
and
energy
resources
Outsourcing
produc+on
overseas
to
reduce
costs
of
China´s
opening
up
to
trade
and
development
produc+on,
could
be
sourcing
access
to
cheaper
raw
Transporta-on
and
communica-on
materials,
energy
or
labour
Cheaper
air
travel
Specially
called
Off
shoring
!
Trade
liberaliza-on
Bulk
shipping
with
containerisa+on
Technology
Reposning
to
opportuni+es
Interna+onal
ins+tu+ons
Post
WW2
Emerging
economies
with
increasing
disposable
incomes
IMF
tries
to
keep
world
economic
system
stable,
provide
New
markets
for
growing
middle
classes
­luxury
goods
financial
support
for
world
trade
Backward
innova-on
for
lower
incomes
eg
cheaper
mobile
World
Bank
lends
to
developing
countries
to
funds
projects
for
pone
economic
growth
WTO
started
at
GATT.
Supervises
world
trading
agreements
and
!
CHINA AND INDIA!
trade
nego+a+ons
and
helps
to
resolve
disputes
eg.
Recently
India
China
lost
against
US
over
their
Steel
tariffs
charges
!
TRADE BLOCKS!
2011
growth
rate
slowed
to
6.9%(9%
2009)
Average
GDP
growth
2004
to
2011
8.4%
Economic
expected
to
lie
367million
people
out
of
poverty
by
Free
trade
areas
between
groups
of
countries
­loose
alliance
2015
eg
NAFTA
,ASEAN.
MERCOSUR
2030
be
close
to
GDP
level
Common
markets
+ghter
alliance
e.g
EU
of
USA.
2020
will
pass
Germany
&
2025
Japan
Enables
trade
growth
without
tariffs
China
Enacourages
specialisa+on
2011
9.5%
growth
TRADE
CREATION
Average
since
1989
to
2011
9.3,
highest
14.2%
1992
TRADE
DIVERSION
Several
hundred
million
peple
lieed
out
of
poverty
and
living
Benefits
condi+ons
have
improved
for
many
more
people
in
a
shorer
Access
to
other
markets
freely
+me
than
ever
before
Import
of
raw
materials/component
parts
freely
Slump
causing
growth
to
slow
but
s+ll
be
largest
economy
by
Possible
economies
of
scale
2020
Spreading
risk
GDP
Breakdown
of
India
AVracts
FDI
eg
UK
and
Japan
car
industry
55.3%
Services
Compe++on
increases
efficiency
16.1
%
Agriculture
Constrains
28.6%
Industry
Domes+c
industries
threatened
by
blocs
members
imports
GDP
Breakdown
of
China
1

Other pages in this set

Page 2

Preview of page 2

Here's a taster:

Monday 6 January 2014
43.6
Services
TATA
acquired
Jaguar
Land
Rover,
Corus
&
Tetley
(40000
9.6%
Agriculture
employees)
46.8%
Industry
! !
Barriers
to
market
entry
For
UK
businesses:
Although
many
economic
&
financial
reforms
since
1990´s
Opportuni-es
BUT.....…read more

Page 3

Preview of page 3

Here's a taster:

Monday 6 January 2014
New
resources
eg
mining
and
oil
Disadvantages
Rise
in
China´s
demand
for
raw
material
and
commodi+es
Can
lead
to
over-reliance
on
one
area
of
the
economy
generally
Compara+ve
advantage
can
move
elsewhere
China
a
leading
player
in
seeking
raw
materials
Emerging
economies
oeen
rely
heavily
on
one
commodity
Demographic
acributes
product9all
your
eggs
in
one
basket)
Structure
and
make
up
popula+on
e.g
market
segmenta+on
Fluctua+ng
commodity
prices
can
be
a
problem
Eg.…read more

Page 4

Preview of page 4

Here's a taster:

Monday 6 January 2014
Labour
costs
increase
Cigareces:
raw
materials,
light,
energy,
water
costs;
packaging;
Supplies
and
materials
higher
costs
transporta+on;
health
damage
costs;
buying;
distribu+on;
Controlling
environmental
damage
increase
costs
environmental
cost-
possibility
of
fires,
liVer,
contamina+on.…read more

Page 5

Preview of page 5

Here's a taster:

Monday 6 January 2014
Social/cultural
differences
in
doing
business
domes+c
firms.
However
cheap
labour
a
source
of
compara+ve
Language
advantage.
Business
mee+ngs
<different
approaches
Protec-onism
against
`unfair'
foreign
compe--on
­
On
the
E.g
emo+onal
or
reserved
part
of
foreign
businesses
takes
the
form
of
two
par+cular
Problems
of
misunderstandings
prac+ces:
!
JOINT VENTURES !
Dumping-
Selling
goods
on
a
foreign
market
below
their
costs
of
produc+on.…read more

Page 6

Preview of page 6

Here's a taster:

Monday 6 January 2014
Not
always
the
case
50
years
ago
there
were
a
lot
of
inward
Denmark
&
Sweden
collaborated
to
build
a
22
mile
bridge
looking
trade
policies
across
the
sea,
integra+ng
their
local
economies
on
both
sides
Inward
Looking
Trade
Policies
of
the
water
Use
import
controls
to
protect
their
domes+c
producers
from
G20
governments
meet
to
co-ordinate
their
policies
in
order
to
foreign
compe++on.…read more

Page 7

Preview of page 7

Here's a taster:

Monday 6 January 2014
Glocalisa+on
adapta+on
for
local
market
Inves+ga+on
in
a
distribu+on
system
in
the
new
market,
Segments
served
&
revenue
&
profits
increased
possibly
by
senng
up
retail
outlet
BUT
less
economies
of
scale/market
research
&
adapta+on
of
Set
up
produc+on
in
the
new
target
market,
building
factories/
products
costly
joint
venture
Trade
off
between
very
cost
effec+ve
approach
&
glocalisa+on
The
two
methods
above
are
examples
of
organic
growth
which
Approach
depends
on
Business
product
e.…read more

Page 8

Preview of page 8

Here's a taster:

Monday 6 January 2014
marke+ng
sales
and
manufacturing
is
only
brought
to
foreign
Technology-
MNCs
have
large
amounts
of
capital;
they
indulge
country
in
huge
amounts
of
research
and
develop
new
technologies.
At
Effects
on
wider
economy-
profits
can
be
repatriated
home,
the
same
+me,
the
transfer
of
technology
to
host
countries
taxes
can
be
avoided.
They
encourage
a
"race
for
the
limits
the
technical
knowledge
of
local
subsidiaries.…read more

Comments

emily

Helpful thank you!

Bobby sanghera - Team GR

really good revision pack! 

Similar Business Studies resources:

See all Business Studies resources »See all resources »