Unit 5A Glossary
BTEC Level 3 Business Studies. Unit 5: International Business
Access to new markets - The new customers a business has the opportunity to sell to as a result of expanding internationally.
Additional revenue streams - The opportunities to earn money from different sources as a result of expanding internationally.
Agencies that support international business - Banks, chambers of commerce, regional advisory organisations ..
Associated businesses - Organisations that support with aspects of international trade such as marketing and logistics
Bank loans - Amounts of money borrowed from a bank by a business to be repaid in smaller installments with additional interest payments.
Brand exploitation - Increasing the returns on investment of a successful brand by expanding into overseas markets.
Comparative advantage - The ability to produce a good at a lower opportunity cost than another producer
Developed economies - A classification for high-income industrialised nations, which have high living standards and the most technically developed infrastructure
Diversification - Selling a range of different products to different markets to reduce risk
Economies of scale - The reduction in average unit costs that a business benefits from as they increase their scale of production.
Emerging markets - Countries in the process of rapid growth & industrialisation.
Export credits - Loans provided to overseas buyers of exporters to ensure that they can pay their invoices.
Exporting business - Firms that sell goods and services to buyers in other countries.
Fiscal benefits - The benefits gained from the way governments collect tax and spend tax revenue in different countries.
Grants for international promotions - Money issued by the government to encourage firms who expand overseas. Growth - An objective of a firm to increase in size by expanding into overseas markets.
Importing business - Organisations that buy goods and services from overseas to either sell in their domestic markets or to support their operations.
Increasing market share - A objective to increase the percentage of the target market that purchase from a business.
International business - The trading of goods and services between organisations in multiple countries.
International partners - Organisations a business should connect with when expanding globally such as advisors and financial institutions
Less developed economies - Low income economies that struggle with structural development due to lack of finance.
Letters of credit - Letters that are issued from the customer's bank to confirm that they are able to pay an invoice and can do so on time.
Logistics - Activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost
Market leadership - The firm with the largest market share in a particular market
Methods used to finance international trade - Prepayment by the importer, letters of credit, export credits and bank loans.
Multinational enterprises - Firms that produce and sell products in more than one country.
Preferential tax rates - A reduction in the tax on profits that governments impose as an incentive to set up operations in their country
Prepayment by the importer - The customer of the product makes the payment before the product is shipped or produced depending on the agreement.
Reasons for conducting business internationally - Growth, additional revenue, brand exploitation, access to new markets, diversification, increasing market share, market leadership, technological dominance, comparative advantage, economies of scale, fiscal benefits and preferential tax rates.
Technological dominance - Having access to sophisticated technology making it easier to set up sales and operations in overseas countries
Trade fairs - Large conferences or exhibitions where organisations are brought together to showcase and sell their goods and services.
UK Export Finance Advisors - Agencies who give advice on overseas transactions, risks and financing for international organisations.