Why does a business seek international markets? Topic 1 Product or market conditions that may prompt a business to trade internationally

Learning Objectives by the end of this lesson students at …. Will be able to analyse the reasons for trading internationally Analysis ~ GCE Grade B Will be able to evaluate the impact of internationally trade on the business Evaluation ~ GCE Grade A* Will be able to propose reasons for trading internationally Synthesis~ GCE Grade A Will be able to demonstrate understanding by using examples/cases Application ~ GCE Grade C Will be able to explain the considerations of trading internationally Comprehension ~ GCE Grade D Will be able to recall reasons a business will trade internationally Knowledge ~ GCE Grade E 10 1

Success Criteria

Why think about trading internationally? Hard to expand market share in the UK Market Saturation – impossible to expand sales further in that particular market

Conditions to prompt a business to trade internationally 2 mins Conditions to prompt a business to trade internationally On your whiteboard write down: Product or market conditions that would prompt a business to trade internationally Extension Task: Are there examples that would be more costly than others?

Product or market conditions to prompt international trade Extending the product life cycle Selling product innovations in multiple (country) markets Selling in new (country) markets due to domestic competition

Extending the Product Life cycle Product Life cycle = phase which many products go through between their first introduction to the market and eventual decline in sales that may lead to production ceasing

Extending the Product Life cycle Businesses work hard to maintain their market share Staying competitive is hard If the product has passed growth/maturity, businesses need to look at ways stop the product going into decline.

Extending the Product Life cycle Extending the Product Life Cycle can help products from going into decline Improvements or small changes in the product could help it keep its market However, changes in tastes/fashions can lead to products in decline quickly. New markets may provide sales growth that would be impossible to achieve in the domestic market through minor changes

Innovation Innovation = new product development or an improvement in the design of an existing product Some products are also replaced by improvements in technology/innovations e.g. computers/mobile phones An international market increases the incentive to keep researching potential innovations and reduces risks Sales may decline in one market but not likely to do so in all markets

Limits in the domestic market Tesco £1 in every £9 spent by consumers in the UK is spent at Tesco Gives Tesco Market Penetration Market Penetration = process of expanding market share so as to reach a larger number of customers No longer able to expand in the UK, opening new stores in Japan, Thailand, Poland etc.

2 mins Examples On your whiteboard write down: Business example extending product life cycle Business example of innovation Business example of new market (country) Extension Task: Are there any examples of businesses using either mass or lean production? Progress Arrow

Against The Clock You have 5 minutes in groups (before the sand runs out!) to write on your whiteboards: The different reasons a business will seek an international market Now Feedback to class

Task

Task List 10/20 items in your household that have not been made in Britain Identify why each of these items has been made/bought abroad rather than in the UK Progress Arrow

Possible reasons Exchange rates, eg if the pound is relatively strong buying iPods in the USA proves to be very cheap The growth of China as a manufacturer of cheap goods and clothing The inability of the UK to grow agricultural products such as bananas and coffee No barriers to trade with the European Union Better quality goods abroad, eg German-made cars.

Homework

Plenary: Articulate!

Lesson Keywords Product Lifecycle Innovation Market Penetration

Why does a business seek international markets? Exit pass On your cards Topic 1: Why does a business seek international markets? Write down: 2 or more things you found easy to understand/ remember from the lesson What did you find difficult to understand

Learning Objectives by the end of this lesson students at …. GCE Grade B Analysis ~ Will be able to analyse the reasons for trading internationally Evaluation ~ GCE Grade A* Will be able to evaluate the impact of internationally trade on the business GCE Grade A Synthesis~ Will be able to propose reasons for trading internationally GCE Grade C Application ~ Will be able to demonstrate understanding by using examples/cases Comprehension ~ GCE Grade D Will be able to explain the considerations of trading internationally GCE Grade E Knowledge ~ Will be able to recall reasons a business will trade internationally 10 1

Success Criteria 