Business and the international economy

Alkin is a multinational company. It produces breakfast foods, including many leading cereal brands. Alkin intends to begin selling in country Z, which is a rapidly growing market. Alkin plans to set up a joint venture with a local business based in country Z. ‘Effective communication will be important to our success but I think there are many advantages in expanding this way’ said Alkin’s Managing Director. The Government of country Z is concerned about the impact of multinational companies such as Alkin on consumers.

May/June 2015

Identify and explain four factors DD ought to think about when cakes are packaged for export.

May/June 2015

KLG operates in country X. It makes electrical parts and sells them to washing machine manufacturers in country X. The Managing Director intends to move to country Y, which is a low-cost country. She said: ‘This will let us pay employees low wages for long hours because there are few legal controls on employment and health and safety. KLG cannot be both ethical and profitable. Changes in exchange rates and import tariffs may create problems once we start exporting.’

May/June 2016

QCH is a global company that manufactures a range of luxury cars. In the previous year, it made a profit of $700m. One of QCH’s objectives is to enter new markets. QCH wants to begin producing cars in country C, a fast-growing economy. The Finance Director said: ‘Meeting customer needs is important. We could form a joint venture or establish our own factory. Both choices would be expensive, costing $800m. I think QCH’s expansion into country C could also benefit other businesses there.’

May/June 2017

Identify two motivational theories and explain how TT could put these theories to work to raise worker motivation.

May/June 2017

SJD works in the private sector. It manufactures steel for construction firms. SJD plans to make 3500 of its 9000 employees redundant. The Operations Director said: ‘Cheap steel imports and high business tax rates are harming our business. There are also ethical issues that we must deal with. The Government should do more to support steel producers. Some of our competitors intend to shut their factories and move to other countries. SJD may need to do the same.’

May/June 2018

Identify and explain two opportunities and two threats that globalisation creates for businesses in country Z.

May/June 2019

Raul runs a small orange farm in country Z. As with every primary sector activity, farming generates external costs and external benefits. Raul sells all 600 tonnes of his oranges straight to a drinks manufacturer in country E. The Government of country E plans to bring in either import tariffs or quotas. Raul commented: ‘This might help country E’s Government meet one of its economic objectives, but what effect will it have on firms that export to country E?’

May/June 2021

Explain two possible reasons for VP to expand.

May/June 2023

NSL operates in country X. Its output includes food products such as bread and breakfast cereals. In its factory, NSL relies on lean production. Quality control matters to NSL. The business brings in $15\%$ of its raw materials from abroad. Movements in country X’s exchange rate may influence firms that import raw materials. NSL’s Marketing Manager understands that the business ought to adapt to shifts in consumer spending patterns. She also knows that market research can support business decision-making.

May/June 2025

Identify and explain how the following could affect Rafael's business. An import quota on motorbikes.

Oct/Nov 2015

AHP is a multinational company. It manufactures mobile (cell) phones in Europe in country X. 80% of its sales are in Europe. Some people are worried about AHP’s effect on the environment. The Operations Director stated: ‘AHP always aims to make sure it complies with all legal controls. Globalisation has opened up many opportunities for AHP and its stakeholders. The Operations Director is planning to move its factories to a low-cost country in Asia. Raw materials would have to be carried an extra 4000 kms. Interest rates are likely to rise across Europe.’

Oct/Nov 2018

Identify and explain two sources of finance that PP could use to fund its expansion.

Oct/Nov 2018

Explain two reasons that the owners of CC may wish to expand the business.

Oct/Nov 2022

SNT operates as an ethical business. It makes a variety of soft drinks by using batch production. During 2023, SNT produced 300 000 bottles of soft drinks each week. A number of factors influence the level of inventory the business ought to keep. SNT’s directors plan to grow the business into fresh markets in other countries through a joint venture. They are also weighing up licensing as another method that could help deal with the possible difficulties of moving into these new markets.

Oct/Nov 2024