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Unit 9 chapter 13 (Assessing internationalisation) (Factors influencing…
Unit 9 chapter 13 (Assessing
internationalisation
)
Assessing internationalisation.
:globe_with_meridians: :mag:
Key terms
:pencil2:
A
tariff
is a tax placed on foreign goods and services. :money_with_wings:
A
quota
is a limit on the number of imported goods and services :100: :forbidden:
Free trade
occurs when there is trade between countries without barriers such as tariffs and quotas. :free:
A
customs union
occurs when there is free trade between member countries but an agreed tariff on non-members. :flag-eu:
More key terms :sleepy:
Outsourcing
occurs when a business moves its production overseas. :earth_asia: :flag-cn:
Re-shoring
occurs when a business moves production back to the domestic country. :flag-gb: :factory:
A
multinational company (MNC)
has operations based in overseas markets. :earth_americas:
Causes of internationalisation
Technology :iphone: :desktop_computer:
Trade agreements between countries
:smiley: :flag-eu:
Transportation costs :airplane: :money_with_wings: :boat:
Benefits of internationalisation :+1:
Reduces risk
because the spread of sales allows a fall in sales in one region to be compensated by a rise in sales in another. :warning:
A larger target population :flag-cn: :silhouettes:
Methods of entering international markets
Licensing
Alliances/ventures
Exporting
Direct investment
MNCs
bring benefits to overseas countries such as
bring skills and expertise, bring employment bring investment, increase demand for local goods and services and increase tax revenue.
:+1::skin-tone-6:
Some
MNCs
have been criticised for
exploiting local resources, only employing locals for low level jobs, keeping the majority of their profits for their head office and not investing locally and tax avoidance.
:-1::skin-tone-6:
Factors influencing the attractiveness of a market.
Expected costs of entering the market. :money_with_wings:
The macroenvironment
(PESTLE)
.
Size and growth of a market. :mountain:
How culturally similar to the UK the market is. :womans_clothes: :champagne: :pray: :place_of_worship:
How much the business has to change for the local environment.
Degree of competition. :checkered_flag:
Perceived risk involved. :warning: