Product/Market conditions that may prompt a business to trade internationally

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What is a benefit of global sourcing?
Potentially significant labour cost reductions
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What is the definition of offshoring?
The relocation of a business process from one county to another
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What is Protectionism?
Shielding a country's domestic industries from foreign competition by taxing imports
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Why would Protectionism be negative in the long term?
It weakens the protected industry because there would be no reason to innovate due to lack of competitors
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Give some examples of trading blocs:
The EU, ASEAN, & NAFTA
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Advantages of being in a trading bloc:
Firms inside the bloc are protected from cheaper imports from outside e.g. EU shoe industry from China/Vietnam imports
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What is backwards innovation?
Strategy of innovating in developing markets and then distributing in developed markets e.g. wind-up radios
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Definition of globalisation?
"The increased freedom and capacity of individuals and firms to undertake economic transactions with residents of other countries on a global scale"
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Other cards in this set

Card 2

Front

What is the definition of offshoring?

Back

The relocation of a business process from one county to another

Card 3

Front

What is Protectionism?

Back

Preview of the front of card 3

Card 4

Front

Why would Protectionism be negative in the long term?

Back

Preview of the front of card 4

Card 5

Front

Give some examples of trading blocs:

Back

Preview of the front of card 5
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