Lecture notes
International Trade
- Module
- Unit 4 - Global business
- Institution
- PEARSON (PEARSON)
Summary notes on international business. A level second year business
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Business: International TradeChapter 75
Key terms:
- Inward Foreign Direct Investment: Investment into a country (UK)
from other companies abroad. E.g. Buying up one of a business,
buying property assets.
- Outward Foreign Direct Investment: Investment from a country( UK)
to another country. E.g. Setting up a factory in Brazil, buying
property in Nairobi
- Saturated Market: One where nearly everyone who wants a
product or service already has it which could lead to sales slowing
down or slipping back.
- Scientific management: Taylor suggested that managers should
maximise worker productivity by calculating how best to divide
tasks into smaller fragments and incentivise workers to produce
exactly as set out by managers.
- Imports: Products produced abroad and consumed domestically.
E.g. Lindor chocolates
- Exports: Goods sold by domestic businesses to consumers in
other countries. They generate extra revenue
- Specialisation: Occurs when a business produces a limited range
or focuses on producing a particular product
Reasons for trade between countries:
- To gain knowledge and expertise in certain types of production
- Foreign suppliers may offer better-quality products
- Foreign suppliers may sell products for lower prices
Keynotes:
Retailers, for example, Tesco relies heavily on imports. Their success
depends on their ability to source the type of imported goods that their
customers enjoy.
Jaguar Land Rover imports many of its parts
20% of UK firms export goods
The main reason why firms export is to find new markets
Firms benefit from economic growth because rising incomes created by
growth make for a bigger market.- Long term benefits
Economic growth rates can vary greatly- short and medium-term
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