Business 7115 · O Level · Business and the international economy
Business and the international economy — practice question
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.’
(a)[2]
What does the term ‘joint venture’ mean?
(b)[2]
Identify two advantages that QCH gains from having objectives.
(c)[4]
Identify and explain two reasons why QCH may want to enter new markets.
(d)[6]
Identify and explain two factors that QCH should take into account when choosing the site of the new factory.
(e)[6]
The Finance Director thinks that QCH’s expansion into country C could benefit other businesses there. Do you agree? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “When two or more businesses agree to launch a (new) project together and share risks” …