Theme 4

Bric: Brazil, Russia, India and China
Mint: Mexico Indonesia, Nigeria and Turkey

The state of a country or region in terms of the production and consumption of goods and services.

Education/Literacy Rate, GDP, Health/Life Expectancy and HDI

Imports - Goods coming into a country.
Exports - Goods coming out of a country.

Specialisation - The process of concentrating on and gaining expertise in a particular subject or skill.
Comparative Advantage - An economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners.

A foreign direct investment is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.

Globalisation is the word used to describe the growing interdependence of the world's economies, cultures,
and populations, brought about by cross-border trade in goods and services,
technology, and flows of investment, people, and information.
It may be caused by FDI, migration, global labour force and structural change.

Process by which international trade is made easier through relaxation of tarrifs and barriers.
Pros: Higher competition, Large Investments, Lots of Promoting.
Cons: Developing countries becoming overly dependant on industrialised countries.

Causes: Political Change, FDI, Migration, Global Labour Force.
Effects: Reduced cost of transport and communication - Advances in technology allow this

Structural change is an economic condition that occurs when an industry changes the way it operates

The World Trade Organisation was created by GATT (The General Agreement on Tarrifs and Trade) in 1994 and exists to reduce barriers to trade and to ensure that countries keep to the agreements they have made.

Theory or practice of protecting country's domestic industries from foregin competition by taxing

A tariff is a tax placed on an import to increase its price and decrease its demand

A quota is a physical limit on the quantity of goods imported or exported

Tarrifs, Quotas, Domestic Subsidies, Government Legislation

1) Type of intergovernal agreement to reduce regional trade barriers.
2) Thailand, phillppines, Malaysia, Vietnam, Burma, Laos. Cambodia, Brunei

USA, Canada, Mexico

1) Enlarged market, protection from international competition outside Bloc, freedom of movement of people
2) Dominance of developed countries, kill of domestic business on nationals, reduce sovereignty of identity

1)May force business to consider selling abroad
2)Sautrated market, high competiton

1) May persuade business to move to a certain country
2) Potential opportunites in oversea markets, spread risk, gain EOS, seen in extention of product life cycle

1) Relocate some of its production process to another country
2) Business functions controlled out to third party business, e.g. call centers in India

Amount of money that household earnings oe gains,each year after taxes,
money avaliable to households to spend on goods/services.

Levels and growth of disaposable income,
ease of doing business, infrastructure,
political stability, exchange rate

Cost of production. Skills and availability of labour force,
infrastructure, location in trade bloc, Government incentives,
ease of doing business, political stability, Natural resources,
Likely return of investment

1) Commercial enterprise undertaken jointly by two or more parties which otherwise retain their district only temp arrangements.
2) Where two businesses come together to become one.

1) Access to knowledge and resources such as capital staff..
2)Complex of intergrate operations and wkrk for culture.

1) Exchange rate are the value of one currency In terms of another.

A strong Pound Sterling means that imports become cheaper and exports become dearer. (SPICED)

1) Gets weaker against currencies. Makes exports to countries cheaper
2) Cause imports to be dearer.

1) Low Cost Leadership - Ability to produce at lower price due to EoS.
2) Diffrentiation - Providing a Unique Selling Point.

A business which does not differentiate its products or marketing between countries.

Pros: EoS can be achieved in production, lower marketing costs, brand recognition increases.
Cons: Various cconsumer wants/needs may not be met, less diffrentiation, legal issues in specific countries.

Products/Services sold to gloibal customers but designed to meet the local market's wants and needs.

Adopts marketing mix to maximise sales in different country.
Subsidary business develops their own marketing strategy.

Foreign operations subordinate to domestic markets, sold without adaptation

A mixture of ethno/polycentric, gains advantages of global approach to gain EoS,
But alters approach to meet needs for individual markets.

Coca-Cola has sweeter or less sweet products in different countries.
McDonalds offer products unique to individual countries

International setting of prices is very complex, must take into account exchange rate and barriers/import duties.

Can be used internationally but must adapt to language/political climate.

Market Penetration - Current products and markets. Product Development - New products, current markets.
Market Development - Current products, new markets. Diversification - New Products in new markets.

1. A small specialised market that focuses on a particular product or service.
2. A small market in each country ehich collectively across all countries can make enough demand to make profit.

A range of people whom have different origins interacting with one another.
Greetings or communicational principles may differ from culture to culture.

Pros: Less competition, customer loyalty, greater profit, reduced PED
Cons: Less EoS, May require unique ingredients/production techniques

Beliefs, moral values, traditions, language, laws made by a country

Lifestyle, religions, economic wealth, family structures, education, political systems held by a country.

Multinational corporation - A business which operates in more than one country.

They: create employment, improve infrastructure, improve balance of payments,
raise a country's profile, increase standard of living, increase skill base

They: have poor safety records, may pull out quickly, the jobs they provide are low pay,
Widen the poverty gap, increase urbnisation, and leak profits out of country operating in.

The scale FDI will likely raise a significant amount due to MNCs providing opportunities for the economy

More goods are likely to be exported and less imported.
Previously imported goods can be bought domestically, and the MNC is the production facility for exporting goods.

Brings in newer technology and production methods and workers are trained accordingly to use this technology.

Local population can purchase a wider range of goods at likely cheaper price than importing.

Having moral principles that govern how a company does business.
Knowing right from wrong.

Owners want to charge greater prices whilst customers want to buy for cheaper.

Suppliers want to charge high prices and owners want cheap prices to then make greater profit.

Owners may want to pay their workers badly or may not prioritise good working conditions.
The government seeks to ensure businesses are lawful, ethcal and pay taxes.

Low emmisions, Safe waste disposal, paying fair wages rates, sourcing sustainable raw materials.

Higher emmisions, pollution, waste disposal.

A system of businesses, people, activities, information, and resources
involved in the movng of a product or service from supplier to customer.

If its misleading, false advertising, inappropriate, targeting wrong age groups.

Political influence, legal control, pressure groups, social media.

Pros: MNCs may seek political approval from government, helping trade and finding new locations to set up.
Cons: Politicians can be bribed in host countries.
Government may be ignorant to issues due to wealth generated.

Pros: Laws can control actions of MNCs already operating in that country.
Cons: MNCs may move production to locations with less legal control.

Pressure groups are organisations which campaign for changes in laws.
Pros: Can raise pubblic awareness of MNC's unethical activity.
Cons: Must be large and organised if it wants to make a large impact.

Pros: Can put pressure on large corporations to change the way they operate. Raises awareness.
Cons: Can only effect the short term, very dynamic therefore people may not be involved for a long time.
MNCs can also ignore social media's concerns entirely.