4.3.2.1 CONDITIONS THAT PROMPT TRADE

What are push factors?

Factors that force a business to leave the market in which it operates in to look for new markets.

Name a main push factor!

Saturated market

If a business is struggling in a saturated market, that means it may not be competitive and may indicate that the business could struggle in other markets. They therefore might undertake market development and move to global or new markets.

What is a pull factor?

Factors that attract a business to a global market.

Name 2 pull factors.

• EoS

• Risk spreading (business becomes less reliant on just one/a few markets)

What is outsourcing?

When a business contracts production to another business e.g. catering or cleaning

One way a business can extend the product life cycle?

Introduce mature products to other less mature markets, adapting product to suit local tastes

What are the factors that prompt trade?

Push and pull factors.

How does a market become saturated?

When the market growth for a product or service stalls or halts completely as businesses compete for customers

How do pull factors entice businesses into a market

lower levels of competition or an untapped market or customers

How might trading in global markets help a company’s sales?

Wider markets :. Higher revenue