International Business

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Why firms seek International Markets

Limited growth in domestic market 

Innovation in multple markets

Foreign competition in home market 

Extension of product life cycle 

Improvements in communications and transportation 

Global Sourcing 

Plus - benefit of emerging markets 

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L3 of Trading Abroad

  • Cheaper 
  • Mass Produced - Because of skilled workforce
  • First Mover advantage
  • More customers = more sales = more profit 
  • Lower Costs
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L4 of Trading Abroad

  • May lead to bad image 
  • Locals can be exploited 
  • Costly - Setup / Market / Failure
  • Poor Standards of living for local people 
  • Language Barriers 
  • Rules / Regulations 
  • Trading Rules / Tarriffs 
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L4+ of Trading Abroad

Depends on the exchange rate

Culture - Any clashes?

Rules and Regulations 

Spending Power

Trading Blocks 

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L1 Trade Liberalisation

Means reducing the barriers to free trade and remove protectionism. 

Achieved through - Trading Blocs / WTO 

Free trade means no barriers to trade, protectism exists where they are barriers to trade. 

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L3 Barriers to Trade

Tarrifs - (Tax on Imports)

Quotas 

Subsides 

Laws 

Foreign goods are less competitive because of higher price  - 

Subsidy is help from governement to import / support a dcomestic indistry e.g farmering 

Reduces costs / price in home market, it may prevent a country competing in that market. 

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