Edexcel Business A Level Revision

Pull factors - are those that attract a business to a global market. These may include lower levels of competition or an untapped market or customers. Pull factors are the opportunities a business may see for expansion into a foreign market. The factors are linked to the foreign market in which the businesses wishes to operate. Economies of scale are present when unit costs fall as output rises. Globalisation has meant a rise in opportunities for international businesses to reduce unit costs by increasing sales volumes to new and emerging markets, thus being able to buy the raw materials to make the products in bulk. Businesses have also moved production to new markets where costs such as wages are significantly cheaper than in their domestic market. Risk spreading is a benefit from moving into markers in order to reduce dependence on the home market. A wet summer in Britian does not worry Wall's ice cream as it sells ice cream in lots of overseas markets. Therefore they nega...

Foreign Direct Investment - is investment made by a business or other entity from one country into the production capacity of a business or other entity from another country e.g. factories Inward FDI / Horizontal FDI - An investment into a country involving an external or foreign company either investing in or purchasing the goods of a local economy. Outward FDI / Vertical FDI - A business strategy in which a domestic firm expands its operations to a foreign country via an investment, merger/acquisition or expansion of an exisiting foreign facility. FDI can be used by businesses to achieve the aim of growth. Countries try to attract FDI using strategies such as lower levels of corporation tax, subsidies for the building of factories, and investment in infrastructure such as roads, ports and airports. It was originally believed that FDI occurred due to differing interest rates in different countries. Businesses would transfer money globally to where they could obtain the highest...