Impact of Trading Blocs on Businesses (Edexcel A-Level Business): Flashcards
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4 critical strategic decisions in trading blocs
4 critical strategic decisions in trading blocs
Production location, market selection, market entry, strategy adapt
Factor costs definition
Factor costs definition
Availability & price of land, labour, and capital
Comparative advantage in trading blocs
Comparative advantage in trading blocs
Countries focus on producing goods they make more efficiently
Economies of scale definition
Economies of scale definition
Cost per unit decreases as production volume increases
Trade diversion definition
Trade diversion definition
Trade shifts from efficient external to less efficient internal
Trade creation definition
Trade creation definition
New beneficial trade created by trading blocs
Main market access benefit of trading blocs
Main market access benefit of trading blocs
Access to significantly larger markets across entire bloc
RTAs (Regional Trade Agreements) key benefit
RTAs (Regional Trade Agreements) key benefit
Collective bargaining power in international negotiations
Impact of trading blocs on small firms
Impact of trading blocs on small firms
Increased competitive pressure; struggle vs large firms w/ scale
Production location strategy advantage
Production location strategy advantage
Low-cost production in one state + tariff-free bloc access