Scheme of Work Edexcel Econ/Business Studies A2 Unit 3 September 09 January 2010

Wk Edexcel specification Edexcel amplification Key issues Resources

Why does a business seek international markets? Students will consider why some companies wish to sell overseas and could review case studies of companies that have done so successfully or unsuccessfully. Extending the product life cycle Will need to be caseProduct or market conditions that through selling in new markets or driven, ie the content of an may prompt a business to trade selling product innovations in multiple argument will depend upon internationally markets; global sourcing; limited the business context, e.g. growth in domestic markets; foreign Tesco v BBC competition in home markets; improvements in transportation and communication links with countries.

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Topical Cases Dec 2008: Rough Smoothie. Topical Cases: International Location. Super simulation exercise that will get students thinking. Business Review: Feb 08 The Pharmaceutical Industry (good basis for discussion on international v national corporations); Sept 06: Tesco v Walmart (P14/15); Nov 2005: International Competition and UK manufacturers A-Z Worksheets: Extending the life cycle; Global sourcing; Improving transport & communications Anderton, ch 76, short chapter on Trading Blocs; useful background Marcouse, Ch 85 contains useful material on the EU and on free trade. Case B1 is highly relevant. Cadburys Purple Reign. Pp 125-132 tells of Cadburys first overseas expansion (to Australia) and how it was helped by the trade barriers that Australia placed on imports in the 1930s A-Z Worksheets: World Trade Organisation A-Z Worksheets: Trade barriers; Trade liberalization; Trading blocs

Increasing trade liberalisation through reduction of international trade barriers; ability to trade within a trading bloc, eg European Union.

Its always fair to ask an exam question on the reverse of something, e.g. increasing protectionism; also the implication of being outside a trading bloc, eg Britain withdrawing from the EU

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Key players in the world economy: Students are to briefly consider how firms and individuals may be affected by the growing economic power of India and China. Students should consider how a national business may seek to do trade with India or China. The differences between What will be the likely impact of Implications of their population size; China and India are the growing economic power of economic growth and export rates; considerable; worth China and India on individuals, increased purchasing power and exploring as they will help national or multinational firms in foreign investment; predicted students develop more the 21st century? economic power compared with US sophisticated analysis and EU; barriers to market entry; trade opportunities for UK firms; differences between China and India, eg state ownership of firms.

Anderton, ch 85 focuses on Third World trade, which is useful scenesetting for China/India (and use Q1 on p591) Marcouse: Ch 92: China vs India. Make sure to use question B2 on pages 668/669 to dispel some myths. Powerpoints: China v India Wholl Win long-term? (Ian M) A-Z Worksheets: Chindia Econ Structure A-Z Worksheets: China FDI

Business Review: Sept 07 China v India, P10; Sept 05 China Crisis? (quite a while ago, but a v. useful introduction to China) Chindia: Section 1 covers the rise of China and India Undercover Economist: Ch 8 Why Poor Countries Stay Poor and Ch 10 on How China Grew Rich A-Z Worksheets: Chindia: Demographics A-Z Worksheets: Chindia Constraints on growth How does a company decide which countries to target? Students should consider the attractiveness of country markets to companies based on the product or service being offered. Students are not expected to remember figures or details about countries in exams, but may have to analyse such information if it is provided in the exam. Assessment of country markets Assessment of potential country This requires a strong markets is based on corporate policy analytic base, to avoid (which countries the company wants descriptive Geography-ish to target) and market attractiveness. factors. Look for a combination of business methods, eg investment appraisal and economic: GDP plus government plus resource factors Comparative advantage and the role Advantages for a company of trading Needs some quite technical of specialisation by countries with a country which can produce a teaching. good or service more cheaply through specialisation.

Marcouse, Ch 63 provides students with a good grasp of market analysis. This is a starting point for analyzing different countries. Business Review: Feb 08 Doing Business in Vietnam, P4: April 2009: Watch out for India and April 2009: Ian Marcouse on India (with a focus on Cadbury and JCBs successes) A-Z Worksheets: Emerging Markets A-Z Worksheets: Market attractiveness Anderton, ch 69, including Question 2 on page 464 and the Data Question on page 470 Advantage Dyson Undercover Economist Ch 9 (Beer, Chips and Globalisation), especially P206-213 on comparative advantage A-Z Worksheets: Comparative advantage

Other considerations before trading internationally This topic addresses the practical issues of trading internationally such as creating an international brand, how to sell and cultural differences in doing business. Responsibility to stakeholders Ethical decisions as to what and Many complex issues where to manufacture; balance here; a huge risk that between capital and labour; where to students will reflect sell; pay and working conditions; media/popular hobbyenvironmental factors, eg emissions, horses. waste disposal. Potential conflicts of A key issue is the socially responsible and ethical difference between behaviour with profit-based and responsibility and ethics other objectives.

Marcouse, Ch 53 is on Responsibility to Stakeholders. It is nicely skeptical, especially in relation to CSR. Cases B1, B2 and especially B3 are very worthwhile. Business Review: Feb 08 Doing Business in Vietnam, P4: April 2009: Ian Marcouse on India A-Z Worksheets: Ethical decisions; Ethics & outsourcing; Environment & ethics

Social/cultural differences in doing business

The purpose of tariffs, laws, import quotas.

Different promotional message for different countries; international branding; distribution channel; joint ventures; pricing strategy for different countries. Why tariffs, laws or import quotas are used, eg to protect domestic industries or balance of trade. Constraints on businesses that these barriers provide.

The overall strategic issue is one-size-fits-all (the globalisation ideal) versus flexible glocalisation. To critique this topic, there is a need to understand the infant industries argument

Globalisation This topic is intended as a brief introduction as to why some companies trade globally and the similarities in global niches.

Topical Cases Dec 2008: Rough Smoothie Topical Cases Nov 2008: The Dealership Business Review: Sept 06: Doing Business in China (a look at the cultural issues; Feb 07: Business etiquette and cultural awareness (by Paul Hoang, Hong Kong) Anderton, ch 70. The text is super, though avoid the graphs and the questions. A-Z Worksheets: Infant Industries Stiglitz (Making Globalisation Work) P 70-73 covers the infant industries argument in a well-balanced way (and the section after on Fair Trade v Free Trade is good too Anderton, ch 68, Useful background text on Globalisation, including some useful background info on P461 Marcouse, Ch 83 contains a useful summary of the debate over globalization, drawing upon Stiglitz. Cases B1 and B2 are very worthwhile. Powerpoints: Globalisation or Colonisation? (Ian M) Marcouse, Ch 81 covers takeovers and mergers quite conventionally, but moves on to analyse takeovers through Ansoffs matrix, including an international perspective on Walmart. Case B1 on LOreals takeover of Body Shop is useful. Topical Cases: the 30/70 rule (on takeovers) Topical Cases Nov 2008: The Dealership Business Review: Sept 06 Body Shop (purchase by Nestle) A-Z Worksheets: World Trade Trends Cadburys Purple Reign, Pp 198-203 tell the story of Cadburys startup in India, developing a heat-resistant chocolate (like Smarties) for the local market. Pp 288-289 shows how a multinationals takeover of a local brand can mean focusing on the local brand instead of going for a homogonous product Marcouse, Ch 65 focuses on marketing strategy, especially through Ansoffs Matrix. P464 looks specifically at marketing strategy in international markets. Case B1 on iPod is worth using. Cadburys Purple Reign, Pp 292-294 looks at Cadburys Global Position A-Z Worksheets: Global Market Niches Undercover Economist Ch 9 (Beer, Chips and Globalisation), gives some useful insights. Topical Cases Nov 2008: The Dealership

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Global industries

Global strategy versus global localisation; role of takeovers/mergers in strengthening company position; sourcing; ability to balance resource investments in countries.

Huge issues here, none bigger than takeovers and mergers; treat it with great seriousness, arming students with language such as horizontal and vertical, but perhaps also Ansoffs Matrix

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Global marketing

Concentration on product markets, emphasis on the similarities of customers aspirations or tastes and access to media. Promotional message may be the same leading to reduced average marketing costs. Sales incentives used may vary due to differences in local market segments. Companies may identify a target

This returns to the issues identified before about in effect - mass marketing v niche marketing

Global market

In effect this is the

market across countries that is much larger than a single domestic market, eg for luxury goods.

BMW approach; luxury goods seem to be more internationally tradable than other goods

Business Review: Feb 08 Fishermans Friend (showing that global niches are not just for luxury goods)

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Are multinationals a force for good or should they be controlled? This topic should enable students through the examination of case studies to look at the good and bad behaviour of multinationals operating overseas and what can be done to control their actions. Benefits that multinational bring to How multinationals have contributed The Spec states this in overseas countries to an improvement in local living far too black and white a standards; employment and economic manner; different growth in overseas countries. perspectives are clearly needed

Anderton, ch 77, Good, straightforward text on pages 520/521 Stiglitz (Making Globalisation Work) P 187-210 covers the Multinational Corporation some thoughts on benefits of multinationals, though more on the negatives A-Z Worksheets: Global location A-Z Worksheets: Multinationals; Multinationals the advantages

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Potential negative impact of multinationals on overseas countries

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Can multinational firms be controlled?

Influence on foreign governments to gain concessions; exploitation of labour in developing countries; implementation of working practices which would be unacceptable in their home country; sale of unsafe products to consumers; use of unsustainable resources; degradation of the local environment. Political, legal or economic constraints; competition policy; pressure groups.

The same is true here; the word exploitation has to be considered with care.

Anderton, ch 77, Good, straightforward text on pages 521/522 Business Case Studies: Case 90 raises many terrific issues re multinationals, including transfer pricing (tax avoidance) Stiglitz (Making Globalisation Work) P 187-210 covers the Multinational Corporation some thoughts on benefits of multinationals, though more on the negatives A-Z Worksheets: Multinationals the disadvantages

The key here is to distinguish between what can be done and what is being done

Stiglitz (Making Globalisation Work) P 187-210 covers the Multinational Corporation including how governments need to cooperate to control them Business Review April 2007: Globalisation (an article on Tory frontbencher John Redwoods free market views spanning globalization and multinationals urging deregulation of the City, by the way) A-Z Worksheets: Can Multinationals be Controlled? Business Case Studies: Case 71 you must use this. Dont be put off by its age the Bhopal Tragedy remains very real in 2009 in India. The case still shocks and raises many debating points.

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Revision and Review

Advantage Dyson A-Z Worksheets: 50 in total covering Unit 3, so there are many for students to do, especially the revision ones: Nos. 49 and 50. Cooking with the Sun Brian Elliss question from the Unit 3 P.A. book

Resources for Edexcel 2008 Specification A2 Unit 3

Title Topical Cases Economics A Level 5th Edition Author A-Z Business Training Ltd Anderton A. Publisher A-Z Business Training Ltd, Edexcel 2008 978 1 40589 228 5 Cadburys Purple Reign Bradley J. John Wiley 2008 978 0 470 72524 5 Unit Guide for Edexcel Unit 3 Ellis B. Philip Allan 2009 Potted review Ian Marcouses monthly email service providing up-to-date case material. This Autumn the focus will be on International contexts An Edexcel version of Andertons classic text. Its written for straight Economics, but there are some useful chapters for the Econ/Bus A level spec., e.g. Ch 69 on World Trade Attractively produced official biography of Cadbury chocolate. Wonderful pics, but its also the story of how (and why) a British brand went global. Standard Unit Guide format, giving a summary of subject content plus insight into exam technique. Short, sharp insights written as articles rather than chapters, covering a wide range from education to ecology and the economy. But I dislike its anti-China slant. The streetwise, highly approachable book on economics that just might excite some of the better students BUY THIS! A gem for us all, covering the whole of AS and A2 marketing in short, sharp, thought-provoking gobbets. Youll need three for the library, as youll be able to set homeworks on it. In Feb 09 it cost 7.99, so its a bargain. 100 worksheets in a photocopiable pack plus disk for installing on a network or VLE. (Available as Unit 3 plus 4a or 3 plus 4b) OK its getting old, but there are still some timeless cases here for A2

Chindia

Ed. Engardio P.

McGraw Hill 2007 978 0 07 147657 7

The Undercover Economist

Harford T

Abacus 2006 978 0 349 11985 4

FAQs on Marketing

Kotler, P

Marshall Cavendish 2008 978 1905 736 492

A-Z Worksheets for Edexcel A2 Level Business Case Studies, 3rd Edn

Ed. Marcouse I Marcouse I. and Lines D.

A-Z Business Training Ltd 2009 Pearson Ed 2002 ISBN 0 582 40636 6

Business Studies A Level, 3rd Edn

Marcouse I. Ed and lead author Surridge M, Gillespie A et al

Hodder Arnold 2008 ISBN 0 340 96690 7 Penguin 2002 0 141 01038 X

Everything is 100% freshly written to match the new 2008 Specs. As before, plenty of student activities/homeworks plus full answer guide Massive best-seller and a really thoughtful critique from a former insider (Chief Economist at World Bank and, later, Nobel Prizewinner) The follow-up to the above. Passionate and thoughtful, though in truth the fact that it was written pre-Crunch dates it.

Globalisation and its Discontents

Stiglitz J.

Making Globalisation Work

Stiglitz J.

Penguin 2007 978 0 141 02496 7

** With Teachers Guide (answer book plus other resources) Other key contacts: Business Review, Turpin Distribution, Pegasus Drive, Stratton Business Park, Beds SG18 8TQ or phone 01767 604974 Topical Cases, A-Z Business Training Ltd, 3 Rayleigh Road, London SW19 3RE, email marcouse@btopenworld.com or see www.a-zbusinesstraining.com Tutor2U, at www.tutor2u.com currently their classroom materials are poorly suited to the 2008 specs; doubtless that will change.