Notesale: Turn your study into money

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Theme 4

Administrative barriers
Rules and regulations (such as trading standards
and strict specifications) that make it difficult for
importers to penetrate an overseas market
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These can include incumbents' high
capital investment and strong economies of scale,
restrictive government policies, and labour unions
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Globalisation
The process of businesses starting to operate
internationally and develop international
influence
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A combination of the words 'globalisation' and
'localisation'
...


Common market

High-context cultures

A market where goods, labour and capital can
move freely across the member states; tariffs are
generally removed and non-tariff barriers
eliminated, or at least reduced
...


Cultures, including much of the Middle East, Asia,
Africa, and South America, that are relational,
collectivist, intuitive, and contemplative
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Developing trust is an
important first step to any business transaction
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Competition policy

Import quota

Government policy that exists to promote
competition and ensure that firms don't abuse
their market power, do not attempt to fix prices or
use pricing strategies to drive out competition, and
do not collude against other producers or the
consumer
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Theme 4

Competitive advantage

Imports

The advantage one company has over another, or
several others, in the provision of a particular
product or service
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Competitive advantage

Goods and services that are bought into one
country from another
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) where it can perform better than its
competitors
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Cost competitiveness
Through acquiring ever-increasing economies of
scale, a company creates the cheapest product on
the market
...
It describes a way to establish the
competitive advantage and essentially means the
lowest cost of operation in the industry
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Institutional framework
The system of formal laws, regulations and
procedures, and informal conventions customs and
norms that shape activity and behaviour
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A product that is a creation of the mind, such as an
invention, literary work or artwork, that the law
protects from unauthorised use by others
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Theme 4

Customs union
A union where member states remove all trade
barriers between themselves and members adopt
a common set of barriers against non-members
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The business may then try to
command a higher price for creating this
differentiated product
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Disposable income
The amount of money that a person has left over
after they have paid their taxes, national insurance
and other deductions
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Dumping
Where an overseas firm sells large quantities of a
product below cost in the domestic market
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Labour productivity
The amount of goods and services produced by
one hour of labour
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Literacy rate
The percentage of adults (over 1 5) that can read
and write
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Low-context cultures
Cultures such as those of North America and much
of Europe, that tend to say what they mean
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Theme 4

Economic and monetary union
An economic union that uses a common currency
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Economic risk
Risk that future cash flows will change due to
unexpected exchange rate changes
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Economies of scale
Increasing the scale of production leads to a lower
cost per unit of output
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Economies of scale
Savings facilitated by an increased level of
production
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Off-shoring
Shifting jobs to other countries
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Preferential trading area (PTA)
A type of trading bloc where certain types of
products from participating countries receive a
reduced tariff rate
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Product life cycle
The stages that many products go through:
development; introduction; growth; maturity;
decline
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Emerging economies
The economies of developing countries where
there is rapid growth, but also significant risk
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Ethnocentrism
The tendency of people to view their own cultures,
ethics and norms as superior
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Exchange rate
The price of one currency against another
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Pull Factors
Factors that entice firms into new markets and are
the opportunities that business can take advantage
of when selling into overseas markets

Purchasing Power Parity (PPP)
A measure of real growth that uses the price of
purchasing a standardised basket of goods and
services in order to compare prices across
economies
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Exports

Reshoring

Goods or services that a firm produces in its home
market, but sells in a foreign market
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Theme 4

Foreign direct investment

Reverse engineering

Investing by setting up operations or buying assets
in businesses in another country
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Foreign direct investment (FDI)

Risk

Business investment undertaken by a firm in
another country; building a factory for example
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McDonald's is a well-known example of a
franchise
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Rules of Origin
A system of allocating certificates whereby a
defined amount of a product or service must be
certified as being created within that region
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The point when most of the customers who want
to buy a product already have it, or there is limited
remaining opportunity for growth in sales
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Global marketing strategy
The process of adjusting a company's marketing
strategies to reflect conditions, consumer tastes
and demand in other countries
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Skills shortages
Where potential employees do not have the skills
demanded by employers
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A production strategy where a business focuses on
a limited scope of products or services
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Trade barriers

Stakeholders

Measures designed to restrict trade
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Trading bloc
A group of countries that has signed a regional
trade agreement to reduce or eliminate tariffs, I
quotas and other protectionist barriers between
themselves
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It is an attempt to
avoid relatively high tax rates through the prices
which one subsidiary charges another for
components and finished goods
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Groups or individuals who can affect or be affected
by the actions of a business
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Tariffs
Taxes that are imposed on imports
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Tax avoidance
Using legal methods to reduce the amount of tax
that a company pays
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It polices free trade agreements,
settles trade disputes between governments and
organises trade negotiations
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