Theme 4 Key terms
Sub
Key term Definition Theme
Theme
Economies are considered to be: Brazil, Russia, India, China and South
BRICS 4 4.1.1
Africa.
Economic An increase in the GDP - value of output of goods and services
4 4.1.1
growth produced in an economy over time
An area/country where goods and services are produced, sold and
Economy 4 4.1.1
bought
Emerging The economies of developing countries where there is rapid growth, but
4 4.1.1
economy also significant risk
A key indicator of growth looking at unemployment rates, trends, labour
Employment
costs and productivity as well as education qualifications and potential 4 4.1.1
patterns
employees
Gross Domestic Product. Measures the output of goods and services in
GDP 4 4.1.1
an economy over a period of time
Is a composite index focusing on three basic measures of human
development: Life expectancy at birth, mean years of schooling and
HDI 4 4.1.1
expected years of schooling and standard of living, measured by gross
national income per capita
A key indicator of the level of development and may include, life
Health expectancy at birth, mortality, pollution exposure and clean access to 4 4.1.1
water
A key indicator of growth. The literacy rate looks at the percentage of
Literacy 4 4.1.1
adults that can read and write
MINTS Economies are considered to be Mexico, Indonesia, Nigeria and Turkey 4 4.1.1
Goods or services that a firm produces in its home market, but sells in a
Exports 4 4.1.2
foreign market
Foreign Direct Investment, when a business invests by setting up
FDI 4 4.1.2
operations or buying assets in businesses in another country
Imports Goods and service that are bought into one country from another 4 4.1.2
Specialisatio When an economy or a business concentrate on a specific range of
4 4.1.2
n products or services.
Foreign
Direct When a business with head office in one country, sets up factories,
4 4.1.3
Investment offices etc in another country
(FDI)
A process by which economies and cultures have been drawn deeper
Globalisation together and have become more interconnected through networks of 4 4.1.3
trade and the rapid spread of technology
International A regulation or policy that restricts international trade, for example:
4 4.1.3
trade barriers tariffs, quotas, customs duties, rules and regulations
The movement of people from one country to another to seek
Migration 4 4.1.3
employment or a better life
Structural Where some businesses grow while others will shrink or close down e.g.
4 4.1.3
change those in primary, secondary and tertiary sectors
Trade The reduction, and sometimes removal, of trade barriers between
4 4.1.3
liberalisation countries
Transnationa Companies that own or control production or service facilities outside the
4 4.1.3
l companies country in which they are based
Domestic Financial support given to a domestic producer to help compete with
4 4.1.4
subsidies overseas firms
Import
A physical limit on the quantity of imports allowed into a country 4 4.1.4
quotas
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Policies used by a government to protect domestic businesses by
Protectionis
making foreign owned products less attractive. Examples include tariffs, 4 4.1.4
m
quotas, subsidies and regulation
Tariffs A tax on imports to make them more expensive 4 4.1.4
Trade
Measures designed to restrict trade 4 4.1.4
barriers
ASEAN The Association of Southeast Asian Nations 4 4.1.5
The European Union, the most powerful trading bloc in the world. A
EU single market that guarantees the free movement of people, goods, 4 4.1.5
services and capital through member states
NAFTA The North American Free Trade Area. Replaced by the USMCA. 4 4.1.5
A market where almost all trade barriers between member have been
Single
removed and common laws or policies aim to make the movement of 4 4.1.5
market
goods, services, capital and labour between countries easy
A group of countries that trade freely with reduced or no tariffs and
Trading bloc 4 4.1.5
quotas on trade between businesses in these countries
Moving a business function or department to a specialist external
Outsourcing 4 4.2.1
provider which may or may not be overseas
The conditions that exist elsewhere that appear to be more
Pull factors advantageous and may cause a business to move to those areas to take 4 4.2.1
advantage of them
The conditions that make a business’ current location less desirable and
Push factors 4 4.2.1
may cause it to leave and move elsewhere
When a business moves to a new location. This can improve the use of
Relocating 4 4.2.1
premises and can lead to lower costs, such as lower rent
Risk Limit the various risk that a business faces eg avoiding over dependence
4 4.2.1
spreading upon one market
Saturated Where most of the customers who would buy a product already have it,
4 4.2.1
market or there is limited opportunity for growth
Disposable The amount of money that households have available for spending and
4 4.2.2
income saving after taxes have been paid
The number and severity of barriers a business faces when entering a
Ease of new market/country. A high ranking means a business faces fewer
doing barriers. Such barriers include dealing with/amount of government 4 4.2.2
business regulations, access to energy sources, tax regimes, employment law
and enforcing contracts
The systems and services that an economy needs to function effectively,
Infrastructure 4 4.2.2
these include transport links and communications
Materials or substances occurring in nature which can be exploited for
Natural
economic gain e.g. raw materials like iron ore, coal or large forests or 4 4.2.3
resources
lakes
Subsidy A payment to a producer to offset/lower the costs of production 4 4.2.3
Global When companies from different countries combine assets and
4 4.2.4
merger operations
A produce that is a creation of the mind, such as invention, that the law
Intellectual
protects from unauthorised use by others. It includes patents, copyrights 4 4.2.4
property
and trademarks
When two or more businesses come together for a specific project. It is
Joint venture not a formal takeover or merger, and the businesses remain 4 4.2.4
independent of each other
Legal rights to a monopoly on a new product or process. The innovator
Patent applies to the patent office. Businesses cannot legally copy the patented 4 4.2.4
product without permission
Global
The extent to which a business or a geographical area such as a
competitiven 4 4.2.5
country, can compete successfully against rivals
ess
Skills
When employers cannot find enough workers with a particular skill 4 4.2.5
shortages
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Ethnocentric/
Where a business approaches the world primarily from the perspective
domestic 4 4.3.1
of its own culture. Products and marketing are not adapted
approach
Geocentric/m A combination of both Ethnocentric and Polycentric marketing. Maintain
ixed and promote the global brand name, but tailor its products to local 4 4.3.1
approach markets
Global
A marketing strategy that adapts a global product or service to suit
localisation
differing tastes and preferences in different regions e.g. ‘think global, act 4 4.3.1
or
local’
glocalisation
Polycentric/I
Where a business considers each host country to be unique. Businesses
nternational 4 4.3.1
adapts their marketing mix to these individual markets to maximise sales
approaches
Cultural Recognition that people across the globe have different interests and
4 4.3.2
diversity values
Smaller, specialised parts of a global market where there are specific
Global niche
customer needs in more than one country are not met by the global 4 4.3.2
market
mass market.
Balance of A record of all transactions associated with imports and exports and all
4 4.4.1
payments international capital movements
The transfer of funds by an MNC to purchase and acquire physical
FDI flows 4 4.4.1
assets such as factories or machines
A multi national company i.e. a business that operates in more than one
MNC 4 4.4.1
country
A system operated by MNC's. It is an attempt to avoid relatively high tax
Transfer
rates through the prices which one subsidiary charges another for 4 4.4.1
pricing
components and finished goods
Child labour The employment of children to undertake business activity 4 4.4.2
A substance that is produced and sent out into the air that harms the
Emissions 4 4.4.2
environment
Exploitation When an agent takes advantage of another agent e.g.an employer
4 4.4.2
of labour abusing an employee
Supply chain
The way a business treats and monitors the labour involved in the
consideration 4 4.4.2
production of raw materials, components and services
s
When a business is able to meet present needs without damaging or
Sustainability 4 4.4.2
compromising the needs of the future
Waste
The process of getting rid of unwanted materials 4 4.4.2
disposal
Government policy that exists to promote competition and ensure that
Competition
firms don’t abuse their market power, do not attempt to fix prices or use 4 4.4.3
policy
pricing strategies to drive out competition
Tax
Using legal methods to reduce the amount of tax that a company pays 4 4.4.3
avoidance
Tax evasion Using illegal methods to avoid paying taxes that are owed 4 4.4.3
The World Trade Organisation that supervises world trading
WTO arrangements and trade negotiations and promotes the benefits of free 4
trade
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