External Influences: Emerging markets and the global environment

This topic explores how businesses are affected by the global economy and the opportunities and threats presented by emerging markets. Emerging markets are countries experiencing rapid economic growth and industrialisation, such as Brazil, Russia, India, China (BRICs), and other nations like Indonesia, Mexico, and Turkey. These markets offer significant potential for expansion due to rising incomes, growing middle classes, and increasing demand for goods and services. However, they also pose risks such as political instability, currency fluctuations, and cultural differences. Understanding these dynamics is crucial for businesses aiming to compete internationally.

The global environment encompasses factors like trade liberalisation, protectionism, exchange rates, and international economic organisations (e.g., WTO, IMF). Businesses must navigate these forces to succeed in foreign markets. For example, a UK firm exporting to India might benefit from lower tariffs due to trade agreements but face challenges from volatile exchange rates. This topic links to other areas of business strategy, such as marketing, operations, and finance, as international expansion requires adapting products, managing supply chains, and securing funding.

For OCR A-Level Business, this topic is assessed in both multiple-choice and essay questions. Students must be able to analyse the impact of globalisation on businesses, evaluate the attractiveness of emerging markets, and recommend strategies for entering these markets. A strong grasp of this topic demonstrates an understanding of how external factors shape business decisions and performance.