international trade -U7

international trade

occurs when enterprises in one nation trades with enterprises another nation

open economy

an economy that allows the Flow of goods and services(capital and labour) across its border

exporting

when businesses sell goods/services abroad, they are earning money from trade when exporting. positive figure in balance of payments

importing

purchasing goods from abroad , money is leaving when we are importing , negative figure

visible trade

importing or exporting of physical/tangible goods eg beef or electronics

balance of trade

the difference between the visible exports and visible imports

invisible trade

the importing and exporting of services eg tourism/insurance

balance of invisible trade

the difference between the invisible experts and invisible imports

balance of payment

refers to the difference between the total export and the total imports in a country over a specific timeframe, if the sum of imports is larger that exports the country has a balance of payments surplus

current account

shows the goods that were imported and those that were exported within the country , it is calculates by subtracting the total value of all imports from the total of exports

reasons why countries export

• small domestic market - increase market size

• economic of scale - switch form batch to mass

• reduce dependance on a single market

• foreign currency

deregulation

the reduction of regulations and state protection and interference in business activities , free enterprise is encouraged , allowing domestic and private competition into the market

globalisation

dominant global firms treating the world as one single market, and produce their commodity in a standardise fashion without regard for culture or traditions

challenge/opportunity of globalisation

• challenge - increases the level of competition for the firm to compete with

• opportunity- will increase the market share and help them gain economic of scale

technology

has reduced the costs of global communication, allows for instant live world communication

opportunity / challenges of technology

• opp- new business methods like e-businesses

• challenge- constant adaptation in the firms like training staff increasing costs

deregulation opportunities/challenges

• opp- offers choice to consumers so they can get high quality at a lower price

• challenge- higher competition for irish firms

migration

increased movement of populations around the European union due to the SEM world wide

migrations opportunities/challenges

• opp- helped increase the supply of workers into the tertiary and construction sectors

• challenge- brain drain, highly skilled educated workers leave Ireland to more to the world wide region

Brexit

the UK leaving the European Union

opportunities and challenges of Brexit

• opp- irish firms can increases their sales as UK goods become more expensive in the EU consumers will pick the cheaper option

• challenge- tariffs are placed on irish goods entering the UK making them more expensive there

opportunities for irish businesses in developing markets

• increased market size - achieve high quality and get awards ISO

• least dependancy on domestic market- reduces risk in cases of domestic slow down

• educational qualifications - irish economy benefits from a well educated skilled workforce, giving competitive advantage

challenges for irish businesses in developing markets

• exchange rates and inflation- must be proactive in Faquirunng foreign currency

• cultural differences- - sending diplomats to advice on cultures

• distribution costs- channels of distribution are longer

• international competition

ICT and international trade

• increased sales - e business

• cheap communication

• advertising

indigenous firm

an Irish locally based business that is established and owned by Irish residents