Edexcel Business A Level Revision

Multinational Corporation (MNC) - is a business that is based or registered in one country but has outlets/affiliates or does business in other countries.  Such companies have offices and/or factories in different countries (typically emerging economies or undeveloped countries due to cost savings) and usually have a centralised head office (typically in western markets e.g. UK and US) where they coordinate global management. Characteristics of a MNC include; Dominant players in the market Complex structures, multi-site and multi-product Grown through organic and inorganic growth Heavy investment in R&D Globally recognised brands Globalisation is one of the major reasons for the growth in MNCs. A number of businesses in order to grow and develop have had to take on a global or internationak perspective, MNCs have also caused further globalisation. MNCs impact the local economy in the following ways; Local labour, wages, working conditions and job creation Local bu

Cultural/social factors - are the lifestyle, customs and values of a group of people. It is important for a business to recognise these factors when targeting markets. Without an insight and understanding it is likely that a business will fail to establish a significant presence in the market. It is essential that a business understand the requirements of the target market, whilst at the same time ensuring that it does not use inappropriate marketing, very likely innocently, to upset them. Cultural and social factors include the following; Cultural differences Different tastes Language Unintended meanings Inappropriate/inaccurate translations Innappropriate branding and promotion. Cultural differences occur because different types of people have different lifestyles, customs and values. For example, in India a handshake for a business meeting is considered critical, though Indian women are not supposed to shake hands with men. Any drink such as tea must be accepted as a

Niche market - A smaller segment of a larger market where customers have specific needs and wants. Marketing mix - The set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4Ps - price, product, place and, promotion - make up a typical marketing mix. The marketing mix needs to be applied effectively to global niche markets in order to be of use to the business. A business will have to invest in each element of the marketing mix numerous times in order to meet the requirements of the variety of consumers that they are targeting. This will require expertise and insight into these specific markets. PRODUCT Product will be the most important factor. The quality must be extremely high in order to target wealthier individuals on a global basis. This means that businesses must undertake significant market research and R&D in order to meet customer requirements. PRICE Businesses will be able to charge high prices as they are tar

Niche market - A smaller segment of a larger market where customers have specific needs and wants. Global market niches are subcultures in world society. These share common interests and can be identified as market segments on a global scale. Although a niche tagets a smaller market, on a global scale, this can be sizeable. This is particularly profitable when we recognise that these are likely to highly differentiated products rather than low costs. This means that the world's wealthiest consumers can be targeted, with the quality of the product being the most important factor. Other common features of a global niche market include; Requires high levels of customer service as demanding customers pay for quality not quantity Highly skilled employees with the expertise and, at times, the reputation required to create and sell the desired products Product innovation is essential in order to product the highly differentiated products that customers require A high level

Niche market - A smaller segment of a larger market where customers have specific needs and wants. Cultural diversity - is the range of different people and their values within a society, which may be based on ethnicity, beliefs or other similar factors. Society attempts to take into account all people's values in order to create a just and fair world.  Global niche markers are similar to domestic niche markets in that they target a very specific range of people, though the key is to position a product so that it appeals to a wide range of customers across the global market. CULTURAL DIVERSITY Cultural diversity recognises that the ideas, customs and social behaviour of a particular people or society vary in different global markets. Those businesses that cater for this will thrive but will struggle to identify exactly what niches in the marker that they have to fill. Those who don't are likely to lose market share. Cultural diversity needs to take into account d

Ansoff Matrix - The Ansoff matrix is a famous strategic marketing planning tool that helps a business determine its product and market growth strategy. It suggests that a business's attempts to grow depends on whether it markets new or existing products in new or existing markets. MARKET PENETRATION A business might wish to pursue a strategy of market penetration targeting the same customer base in its current global markets.  To do this it will look at its EPG (Ethnocentric, Polycentric and Geocentric) marketing approach and decide where and how to invest. This will be dependent on the forecast return on investment from each market that it already operates in. It will look to see if it should continue its current approach e.g. ethnocentric or adapt it to meet the changing requirements of the marker e.g. to one of geocentricity.  MARKET DEVELOPMENT Global businesses will always be looking to pursue a strategy of new market development. As markets grow and disposable inco