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Absolute advantage?
exits id the real resource cost of a product is lower in one country than another
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Backward innovation?
involves developing low cost products that will appeal to people with relatively low incomes, (early versions of phone in africa etc)
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Brazil, Russia, India, China, fast growing ecnomies
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Raw materials or semi-manufactured products that are traded in bulk and not branded
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Common markets?
Have completely free trade, single unfired trade policy, free movement of goods, services people and capital.
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Corporate social responsibility?
Means taking decisions in a way that takes into account all stakeholders interest, fair wages, avoiding pollution etc
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Developing countries?
relatively low standards of living, compared to developed countries, have small manufacturing sectors and majority of population engaged in agriculture
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means selling more than one product, or the same product in more than one country, decreasing demand in one market can be buffered by profits still being made in other markets
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Economies of scale?
reduction in average cost of production brought by an increase in size and scale of the business
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Emerging economies?
characterised by rapid economic growth, seen big increases in standards of living and manufacturing outputs
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Ethical decision making?
Means following codes of practice that embody moral values, objective is to do the right thing
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Ethnocentric model?
A business believes that what was a success story in domestic market will also be in other countries, looking at the world from the perspective of ones own culture (global marketing strategy)
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Foreign direct investment?
means investing in a country other than where the head office is
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Free trade areas?
are groups of countries that trade completely freely with each other
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Global market niches?
are smaller, more specialised parts of the global market where customers in more than one country have particular needs that cannot be fully met by the mass market
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process through which an increasingly free flow of ideas, people, goods and serves leads to integration of economies and societies
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globalisation & localisation, emphasise that idea that a global product or service is more likely to succeed if adapted to specific requirements of each market.
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international monetary fund, tries to keep system table and provide finance for world trade to continue without interruption
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includes all means of transport and communication facilities as well as basic services such as energy and water supply
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Inorganic growth? Organic growth?
Merger or take over, organic growth occurs when a business expands its own capacity by investing directly
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intellectual property rights?
right to own and exploit ideas or inventions, trademarks and patents
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Joint ventures?
when two businesses come together for a project, typically one provides the finance from abroad, the other helps for local contacts and know-how. In china they ensure relevant permission can be obtained from the communist party
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Market saturation?
Occurs when it becomes impossible to expand sales further in that market
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multinational corporations?
businesses that are active in more than one country
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offshoring and outsourcing?
offshoring = locating production in a foreign country,outsourcing = getting inputs from an independent supplier in another country
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polycentric model?
considers each host country as unique with specific needs
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The product life cycle?
development, introduction, growth, maturity, decline
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any government policy aimed to protect the domestic economy
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Pressure groups?
organisations attempting to influence public opinion and government legislation
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physical limits on level of specific imports in any one year
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Social and cultural differences?
come from the fact that individual societies and groups within them may have a distinctive way of living, different marketing strategies are needed for different countries and cultures
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means that people (or an economy) focus on what they do best, output per head rises
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Any individual or group interested in or directly affected by a business, customers, employees, shareholder, government, pressure groups, environment
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are groups of people who have values and interests in common
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the idea that after a merger of takeover the performance combined will exceed that of its previously separate parts, 2 + 2 = 5
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takeover or acquisition?
refers to the situation where one companies buys another, more than 51% of the shares
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Are taxed on imported goods, making imports more expensive and generally sales lower
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The theory of comparative advantage?
If each country each specialise in the product with the lowest opportunity cost, then trade, real incomes for both countries will be higher
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Trade blocs? Trade creation? Trade diversion?
Trade blocs = groups of countries where trade barriers are reduced or eliminated Trade creation = increase in total traded because of reduced trade barriers within a trading bloc Trade diversion =when trading bloc reduces imports from non members
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Trade liberalisation?
Process of reducing trade barriers
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The world bank?
Lends to developing countries in order to fund projects which will help them to raise incomes and make their economies more efficient
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The world trade organisation?
supervises world trading arrangements and trade negotiations and resolves disputes between governments
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Transfer pricing?
one part of the MNC transfers goods or services to another part, say they have more profit in low tax countries, increasing profits overall
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Card 2


Backward innovation?


involves developing low cost products that will appeal to people with relatively low incomes, (early versions of phone in africa etc)

Card 3




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Card 4




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Card 5


Common markets?


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