A2 Flash Test 3 - Globalisation and International Markets Quiz

What is one of the causes of globalisation?

• Decreased trade

• Cultural homogeneity

• Reduced technology

• Limited infrastructure

Answer explanation

Cultural homogeneity is a cause of globalization as it leads to the spread of similar cultural practices and values across different regions, facilitating trade and interaction among diverse populations.

Ella is exploring ways to expand her business internationally. Which of the following is a method she can use to enter international markets?

• Importing

• Licensing & Franchising

• Domestic investment

• Local partnerships

Answer explanation

Licensing & Franchising allows companies to enter international markets by granting rights to foreign entities to use their brand or business model, making it a strategic method for expansion.

What is a potential opportunity for UK businesses brought by globalisation?

• Increased isolation

• Access to new markets

• Reduced competition

• Limited resources

Answer explanation

Globalisation offers UK businesses the chance to access new markets, allowing them to expand their customer base and increase sales. This opportunity contrasts with isolation, reduced competition, and limited resources.

Leo runs a small tech startup in the UK. What is a threat for his business due to globalisation?

• Enhanced local support

• Increased competition

• Decreased market size

• Limited innovation

Answer explanation

Increased competition is a significant threat for UK businesses due to globalisation, as it allows foreign companies to enter the market, making it harder for local firms to maintain their market share and profitability.

Which of the following is NOT a method of entering international markets?

• Exporting

• Joint Ventures

• Direct Investment

• Local Trading

Answer explanation

Local Trading is not a recognized method for entering international markets, unlike Exporting, Joint Ventures, and Direct Investment, which are established strategies for market entry.

Matilda is considering entering international markets for her handmade jewelry business. What is one advantage of exporting as a method for her?

• High initial investment

• Low risk

• Limited market access

• Complex regulations

Answer explanation

Exporting is a low-risk method for entering international markets because it requires less investment and commitment compared to other strategies like direct investment, allowing businesses to test new markets with minimal exposure.

What is a disadvantage of direct investment in international markets?

• High control

• Low cost

• High risk

• Limited influence

Answer explanation

Direct investment in international markets often involves high risk due to factors like political instability, currency fluctuations, and market volatility, making 'High risk' the correct disadvantage compared to the other options.

Which of the following is a cause of globalisation?

• Decreased infrastructure

• Improved technology

• Reduced trade

• Cultural diversity

Answer explanation

Improved technology facilitates communication and transportation, making it easier for countries to trade and interact, thus driving globalisation. In contrast, decreased infrastructure and reduced trade hinder it.

Anaya and Eesha are considering entering a joint venture to expand their business into international markets. What is a benefit of this approach?

• Full control

• Shared risk

• High cost

• Limited resources

Answer explanation

A key benefit of joint ventures in international markets is shared risk. By partnering with another company, businesses can distribute the financial and operational risks associated with entering new markets.

What is a disadvantage of licensing in international markets?

• High control

• Low risk

• Limited control

• High cost

Answer explanation

Licensing in international markets often results in limited control over the brand and operations, as the licensee manages the business. This can lead to inconsistencies and potential damage to the brand's reputation.