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
Plus - benefit of emerging markets
L3 of Trading Abroad
- Mass Produced - Because of skilled workforce
- First Mover advantage
- More customers = more sales = more profit
- Lower Costs
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
L4+ of Trading Abroad
Depends on the exchange rate
Culture - Any clashes?
Rules and Regulations
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.
L3 Barriers to Trade
Tarrifs - (Tax on Imports)
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.