International — common mistakes

When evaluating the impact of globalisation on a business, always consider both opportunities and threats. Use the business's specific context (e.g., its size, industry, and current market position) to justify whether the overall impact is likely to be positive or negative.

In a case study, if a small or medium-sized enterprise (SME) with limited capital is considering international expansion, recommending exporting as an initial strategy is highly justifiable. Contrast this with a large MNC, for which exporting might be too limiting.

When analysing FDI, focus on the strategic rationale. A business might use FDI not just to access a market, but to secure cheaper resources, gain a strategic foothold against a competitor, or to be closer to key suppliers in a global supply chain.

Analyse the chain of effects of a tariff. For example: Tariff on imported steel -> Increased costs for a car manufacturer -> Decision to raise car prices or accept lower profit -> Potential loss of price competitiveness -> Possible long-term decision to source steel domestically or move production.

Use the concept of 'glocalisation' (Think Global, Act Local) in your answers. Justify why a specific element of the marketing mix (e.g., product flavour, promotional message) would need to be adapted for a given country, linking it to a specific cultural factor.

Not necessarily. While globalisation offers opportunities like access to larger markets, it also brings significant threats. These include intense price competition from low-cost international rivals, the risk of becoming uncompetitive if exchange rates move unfavourably, and the complexity of managing global supply chains. For a business that relies on a protected domestic market, globalisation can be a major threat to its survival.

This is a common mistake known as ethnocentrism. Assuming a 'one size fits all' approach ignores crucial differences in culture, religion, income levels, legal regulations, and consumer tastes. For example, a food product may contain ingredients that are not consumed in another country, or a promotional campaign's humour might be offensive elsewhere. Successful international marketing often requires significant adaptation of the product, price, promotion, and distribution.

No, tariffs are just one type of trade barrier. Governments also use non-tariff barriers (NTBs). These include quotas (a physical limit on the quantity of a good that can be imported), subsidies to domestic producers (making them more competitive), and complex administrative or technical regulations (e.g., safety or labelling standards) that are difficult or expensive for foreign firms to meet. These NTBs can be just as effective as tariffs at restricting trade.