A2 EDEXCEL BUSINESS STUDIES UNIT 3 KEYWORDS

Absolute Advantage     

Exists if the real resource cost of a product is lower in one country than another               

Backward innovation    

involves developing low cost products that will appeal to people with relatively low incomes. Will frequently have the most basic functions of sophisticated manufactured products and may be similar to the early versions of a products that are not sold with more features in developed economies

Commodities   

Are raw materials or semi-manufactured products that are traded in bulk and are not recognizably originating from any particular business e.g. iron ore, cotton wheat and oil    

Common markets

 Have completely free trade internally and a single unified trade policy covering all member countries trade with the rest of the world. free movement of goods, services, people and capital. Individuals in all member countries can work in any other member country. Businesses based within the common market can invest in any member country.       

Corporate Social responsibility

Means taking decisions in a way that takes into account all stakeholders interests. treating employees, customers and suppliers fairly, avoiding polluting activities and contributing to the local economy may all be part of this               

Cultural imperialism

the practice of promoting, distinguishing, separating or artificially injecting the culture of one society into another.         

Developing countries

relatively low standards of living, compared to developed countries. they have small manufacturing sectors and the majority of the population may be engaged in agriculture. They have limited infrastructure and levels of investment are often low. many of the worst often damaged by wars   

Developed countries

have high incomes. Through capital investment have acquired sophisticated production facilities. Singapore and South Korea are now developed          

Diversifying

Selling more than one product, or the same product in more than one market. if there is a decreasing demand for one product, or in one particular market, profits can still be made with other products or in other markets

 - Growth in emerging markets can balance the decline in mature or saturated markets

 -investments in many countries spreads risks

 - Acquiring brand names or patents- already have loyal customers and a market presence          

Economies of scale

are a reduction in average costs of production brought about by an increase in size and scale of the business     

Emerging Economies

characterized by rapid growth. They have seen big increases in manufacturing output and standards of living e.g. India and Mexico

Ethical decision making               

following codes of practice that embody moral values. the objective is to do the right thing, acting with honesty integrity and taking into consideration the interests of everyone affected by the decision.            

Ethnocentric model

an approach to marketing based on the tendency to look at the world primarily from the prospective of ones own culture. a business believes that what was a success story in the domestic market will also be so in the other countries in which it operates             

Extension strategies

aim…