Glossary

Every term, in one place

The same 59 definitions the lessons link to inline, wherever a sentence uses them — gathered here so a definition is never more than one page away.

A

Ansoff's MatrixAnsoff Matrix, product-market growth matrix: A model crossing whether a product is new or existing (to the firm) against whether a market is new or existing to generate four growth strategies — market penetration, market development, product development and diversification — with risk rising as less of the firm's existing knowledge carries over.

B

balance of paymentsBoP: A record of every transaction between a country's residents and the rest of the world over a period, split into the current account, capital account and financial account (plus a small balancing item). By construction the whole balance of payments sums to zero — a deficit on one account is mechanically matched by a surplus elsewhere.
brand: The name, symbol or design that makes one business's version of a product identifiable and distinguishable from close substitutes — part of why two functionally similar products can sell at very different prices.

C

customs union: A trading bloc combining free trade between members with a common external tariff applied to non-members — the two-part definition the mark scheme credits in full; naming only the free-trade half earns half the marks. More integrated than a free-trade area (each member sets its own external tariff), less integrated than a common market (also free factor movement) or an economic and monetary union (also a shared currency and macroeconomic policy).

D

developed, developing and emerging economiesdeveloped economy, developing economy, emerging economy, developed economies, developing economies, developed country, developing country, emerging market, emerging markets: A single spectrum, not three independent labels — a country's income level (GDP per capita), the structure of its output/employment (how far it has shifted from primary-sector activity toward secondary and tertiary activity), and its institutional development (functioning credit, legal and regulatory systems) all move together as the same underlying growth process advances. 'Emerging' names an economy actively in that transition — moving up the spectrum, not sitting at a fixed point on it — rather than a fourth, separate category.
dumpinganti-dumping: Selling a good in a foreign market below its own cost of production (or below its home-market price), usually enabled by a state subsidy, specifically to undercut and drive out established rivals in that market — the standard justification for an anti-dumping tariff, distinct from ordinary low-cost competition because it targets price below cost, not merely below a rival's price.

E

ease of doing businessEase of Doing Business ranking, EDB ranking: A country-level measure of how straightforward it is to start and run a business there — registering property, obtaining permits, enforcing contracts — used as a factor in both market-entry and production-location assessments; a favourable ranking doesn't by itself confirm other location-specific strengths like workforce skill or supply-chain quality.
economies of scaleeconomy of scale, internal economies of scale: A long-run fall in long-run average cost as output increases, because there is no fixed factor being shared more efficiently — there is no fixed factor at all in the long run. A genuinely different mechanism from diminishing returns, even though both are commonly (and wrongly) described as "efficiency going up."
employment patterns: In the WBS14 mark scheme, a change in WHICH SECTOR people work in as an economy grows — primarily the shift from primary toward secondary/tertiary employment — not a change in the total number of people in work. A confirmed, examiner-reported confusion: most candidates default to describing employment totals when this term is actually asking about the sectoral mix.
ethnocentric approachethnocentric, domestic approach, ethnocentric marketing: A global marketing approach that exports the home-country product, price, promotion and place unchanged into every new market, with no local adaptation at all. Zero adaptation cost, but captures only whatever fraction of local demand the home approach happens to fit — the correct choice only where the cultural or taste mismatch with a target market is genuinely small.
exchange rate: The price of one currency expressed in terms of another — how much foreign currency a unit of the domestic currency buys, or vice versa.
extension strategyextension strategies: A deliberate change to one element of the marketing mix — a product update, a new promotional angle, a new distribution channel, a price change — intended to push a maturing product's sales back into growth before it enters decline, rather than accepting decline as inevitable.

F

footloose MNCfootloose capital, footloose: An MNC whose production can be relocated to another country relatively easily once the cost/return calculus that attracted it there changes — the property that limits how permanent any local benefit (jobs, investment, tax receipts) from hosting an MNC really is, since the same decision logic that brought the investment can just as readily remove it.
foreign direct investmentFDI: Investment by a firm or individual from one country in productive assets (factories, machinery, a controlling stake in a business) in another country — a spec-named cause of potential growth alongside domestic investment, because it adds directly to the host economy's capital stock regardless of where the funding originated.
free-trade areaFTA: The least integrated of the spec-named trading-bloc types: members trade freely with each other, but each still sets its own external tariff against everyone else — no common external tariff, unlike a customs union. Because external tariffs stay independent, a free-trade area needs rules of origin to stop goods entering through whichever member has the lowest external tariff and being re-exported tariff-free to the rest of the bloc, a loophole a customs union's shared external tariff closes automatically.

G

GDP per capitaGDP per head, income per capita, per capita GDP: A country's GDP divided by its population — a rough measure of average income per person that raw GDP alone can't give, since a country with a huge population can post a huge GDP while still being materially poor per person. A percentage change in GDP per capita is NOT simply the percentage change in GDP minus the percentage change in population — population growth compounds in the denominator, so the two growth rates have to be divided, not subtracted, to get the exact figure.
geocentric approachgeocentric, mixed approach, geocentric marketing: A global marketing approach that standardises the elements of a firm's operations and marketing mix where doing so saves real cost, and adapts the elements where local culture or taste genuinely demands it — a deliberate, element-by-element synthesis, not a fixed 'blend' of the other two approaches. Applied specifically to the 4Ps, this approach is called glocalisation.
glocalisationglocalization, glocalisation strategy: The geocentric/mixed global marketing approach applied specifically to the marketing mix (4Ps): standardising the elements of product, price, place and promotion where the cost saved by global uniformity is large, and adapting the elements where local culture, taste or regulation makes standardising too costly in lost revenue — decided element by element, not applied as one uniform 'blend' across the whole mix.
greenwashing: An MNC using its own marketing or media campaigns to present itself as more environmentally or socially responsible than its actual practices justify — a reputational tactic for managing negative public opinion that doesn't necessarily change the underlying practice that caused it.

H

Human Development Index (HDI)HDI: A composite 0–1 measure of development combining normalised dimension indices for education (mean + expected years of schooling), health (life expectancy at birth) and income (GNI per capita at PPP, log-transformed), combined via their geometric mean rather than a simple average so a very low score in any one dimension can't be masked by strength in the other two. Built to capture more than GDP per capita alone, but it says nothing about within-country distribution, environmental sustainability, or political freedom — real, spec-tested limitations, not omissions to gloss over.

I

infant industry argumentinfant industry protection: The case for temporarily protecting a genuinely new domestic industry — with tariffs, quotas or subsidies — until it grows large enough to compete unprotected, on the argument that a promising industry can die in its earliest, highest-cost years without ever getting the chance to reach a competitive scale. The argument only holds up as protection if it is genuinely temporary; permanent protection removes the competitive pressure the industry needs to actually mature.
international competitiveness: How effectively a country's firms can sell in world markets against foreign rivals, measured by relative productivity, relative unit labour costs, and relative export prices — driven by both cost factors and non-price factors (quality, branding, reliability, innovation).

J

J-curve: The short-run pattern in a country's trade balance following a devaluation or depreciation: an initial dip before any recovery, because prices reprice instantly while trade volumes take months to respond. The eventual recovery only crosses back above the pre-devaluation starting point if the Marshall-Lerner condition holds.
joint ventureJV: Two or more otherwise-independent firms agreeing to jointly own, fund and share the risk of one specific project or venture, while remaining completely separate businesses everywhere else — distinct from a merger, which combines the firms entirely, precisely because each partner's independence outside the shared venture is preserved.

M

Marshall-Lerner conditionMarshall-Lerner, M-L condition: The condition under which a currency devaluation or depreciation improves a country's trade balance in the long run: the combined price elasticities of demand for its exports and imports must exceed 1. Below that threshold, the trade balance ends up worse off than before the currency moved.
merger: A mutual combination of two firms, agreed by both boards after negotiation, typically producing one new (or one surviving) entity with shareholders from both original firms holding shares in it. Distinguished from a takeover by consent — a merger requires both sides to agree, a takeover doesn't.
minimum efficient scaleMES: The lowest output at which a firm has captured every available internal economy of scale — the point where long-run average cost first reaches its minimum. A firm below MES faces a real cost disadvantage against a rival producing at MES; growth (including by merger) that pushes a firm past MES moves it into diseconomies of scale instead.
multinational corporationMNC, multinational: A business that owns or directly controls production or service operations in more than one country, coordinated from a single decision-making structure — genuinely different from a firm that simply exports into other countries from one home base, because an MNC's own operations sit inside more than one national economy at once.

N

net migration: Immigration minus emigration over a period — commonly stated backwards by candidates (emigration minus immigration) or dropped to just 'migration' without the 'net'. Positive net migration raises the labour force directly (a cause of potential growth) and affects employment/unemployment in both directions at once, since migrants are also consumers who add to aggregate demand and often fill specific skill gaps — which effect dominates depends on whether incoming workers substitute for or complement the existing workforce's skills.
niche marketniche markets: A small, specific group of customers with a particular need a mass-market product doesn't meet — or a strategy targeting one with a differentiated product, competing on distinctiveness or premium value rather than the low-cost, high-volume advantage a mass-market strategy relies on. Usually fewer direct competitors and room to charge a premium price, at the cost of a genuinely smaller pool of customers to sell to.

O

off-shoringoffshoring: Moving a firm's OWN production to another country while keeping ownership and control of it, typically via foreign direct investment — chosen to capture a lower cost of production while keeping direct control over quality, process and IP. Distinct from outsourcing, which pays an independent external firm instead.
outsourcing (production)international outsourcing: Paying an independently-owned external firm, often overseas, to manufacture goods to a firm's specification rather than the firm owning the production itself — the international-trade counterpart to outsourcing (staffing): control is traded for a variable, no-capital-commitment cost.

P

patent: A registered, time-limited legal monopoly over a genuinely new invention or process, letting the inventor be the sole legal seller for a fixed number of years so they can recover their research and development cost before competitors are legally permitted to copy it. Requires formal registration, unlike copyright.
political stability: A country's freedom from civil unrest, conflict or sudden government change — protects a market assessment's expected revenue stream and, more severely, a production-location assessment's large, physically fixed capital investment, which cannot be relocated the way a marketing budget can be scaled back.
polycentric approachpolycentric, international approach, polycentric marketing: A global marketing approach that treats every market as a fully separate operation, adapting product, price, promotion and place independently in each one with no attempt at cross-market standardisation. Captures the closest possible local fit, at the highest cost of the three named approaches — worth it only where a market's requirements (regulatory, structural, not just cultural) genuinely can't be met by a lighter, geocentric adaptation instead.
Porter's five forcesfive forces, five forces model: Michael Porter's model of five competitive pressures — bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes, and competitive rivalry — that between them determine how much of an industry's value incumbent firms keep as profit rather than lose to suppliers, customers, rivals or new competition.
Porter's generic strategiesPorter's Strategic Matrix, generic strategies matrix: A model crossing a firm's chosen source of competitive advantage (lower cost vs. differentiation) against its competitive scope (the whole market vs. one narrow segment) to generate four broad competitive strategies — cost leadership, differentiation, cost focus and differentiation focus.
pressure group: An organised group that campaigns to influence a business's or government's decisions without seeking to run the business or government itself — distinguished from a stakeholder generally by its explicit, organised campaigning purpose (a boycott campaign, a public report) rather than simply being affected by a firm's decisions.
price elasticity of demandPED, price elasticity: How responsive quantity demanded is to a change in a good's own price: %ΔQd ÷ %ΔP. Negative for any normal downward-sloping demand curve — elastic below −1, unit elastic at exactly −1, inelastic between −1 and 0 — and it changes continuously along a single straight-line demand curve; it isn't fixed for a good.
product life cyclePLC, product life-cycle: The pattern by which a product's sales tend to rise then fall across stages — development, introduction, growth, maturity/saturation, decline — driven mechanically by how much of the finite addressable market has already adopted it. Extension strategies aim to delay the decline stage by changing an element of the marketing mix.
protectionismprotectionist policy, trade restriction: Government action to shield domestic producers from foreign competition — tariffs, quotas, non-tariff barriers (e.g. safety/quality standards) and export subsidies are the spec-named types. Raises prices for domestic consumers and invites retaliation, even when a specific justification (infant-industry protection, anti-dumping, national security) is genuine.
pull factorpull factors: An attractive feature of a market a firm doesn't yet serve — higher sales or profitability, risk spreading across markets whose economic cycles don't move together, or economies of scale from a larger combined output — that draws a firm outward, the opposite direction of cause from a push factor.
push factorpush factors: A condition inside a firm's CURRENT market that reduces the value of staying there — a saturated market with little unclaimed demand left, or intensifying competition compressing margins — pushing a firm to look elsewhere, defined entirely by conditions at home rather than any specific foreign opportunity.

Q

quotaimport quota: A direct limit on the physical quantity of a good that may be imported, letting the domestic price rise to whatever clears the market at that fixed quantity. Unlike a tariff, a quota does not automatically generate government revenue — the gap between the world price and the domestic price becomes a windfall 'quota rent' for whoever holds the import licence, unless the government auctions the licences itself.

R

relative unit labour costsunit labour costs, RULC, ULC: Labour cost per unit of output, compared with trading partners — wage cost divided by output per worker, not the wage level alone. A country with lower wages can still have higher unit labour costs than a rival if its productivity is low enough.
rules of originregional value content, RVC, rules of origin requirement: The test a bloc applies to decide whether a good genuinely originates within the bloc — typically a minimum share of a finished good's value that must come from bloc members — before it qualifies for the bloc's preferential (often tariff-free) treatment. Matters most for a bloc with no common external tariff (a free-trade area, like NAFTA/USMCA), since without this test a business could route goods through whichever member has the lowest external tariff and re-export them tariff-free to the rest of the bloc.

S

self-regulation: An industry or firm voluntarily setting and enforcing its own standards of conduct, without a government imposing and enforcing them by law — the least externally-binding of the mechanisms for controlling an MNC's behaviour, since there is no independent enforcer if the firm's own standards slip.
single marketEU single market, the single market, four freedoms: A level of trading-bloc integration beyond a customs union: free movement of goods, services, capital AND people (labour) between members, not just tariff-free goods. The EU is the spec-named example — a business inside it can move components across internal borders with no tariff and no customs check at all, and recruit staff from any member state without a work permit.
stakeholder: Any individual or group affected by, or able to affect, a firm's decisions — employees, customers, suppliers, the local community, government and pressure groups, as well as shareholders. Every shareholder is a stakeholder, but not every stakeholder is a shareholder.
structural transformationprimary sector, secondary sector, tertiary sector, sectoral shift: The shift of an economy's output and labour away from low-productivity primary-sector activity (agriculture, extraction) toward higher-productivity secondary-sector (manufacturing) and tertiary-sector (services) activity as it grows — the mechanism behind why 'employment patterns' change with growth, and why a falling share of the workforce in agriculture is read as a genuine development signal, not just a labour-market statistic.
subsidygovernment subsidy, producer subsidy: A per-unit payment from government to producers, lowering the effective cost of supplying each unit — the mirror image of a specific tax, shifting supply down/right and splitting its benefit between consumers and producers by the identical elasticity rule that governs tax incidence.

T

takeoveracquisition, hostile takeover, friendly takeover: One firm acquiring a controlling stake in another, bought directly from the target firm's shareholders — friendly if the target's own board recommends accepting the offer, hostile if the target's board opposes the deal and the acquirer goes directly to shareholders instead.
tariffimport tariff, import tax: A tax on imported goods, raising their domestic price and generating government revenue on every unit still imported after the tax. Unlike a quota, a tariff sets a price wedge and lets the resulting import quantity adjust to demand, rather than fixing the quantity directly.
trade diversion: The part of a rise in a bloc member's imports that replaces a lower-cost NON-bloc producer with a higher-cost bloc-partner producer, purely because the bloc's tariff wall excludes the cheaper outside source — a welfare-reducing effect that can offset or exceed the gains from trade creation.
trading blocregional trading bloc: A group of countries granting each other preferential trade terms not extended to outsiders — in increasing order of integration: a free-trade area, a customs union, a common market, then an economic and monetary union. Spec-named as a cause of globalisation, since it multiplies the trade-liberalisation effect across every member country at once. Costs and benefits of membership include trade creation and diversion, economies of scale from a larger market, lower transaction costs, and freer factor movement, weighed against a loss of independent trade policy.
transnational corporationTNC, multinational corporation, MNC: A firm that owns or controls productive assets — via FDI — in more than one country, coordinating production, supply chains or sales across borders. Spec-named both as a characteristic of globalisation (their growth) and, via the FDI they undertake, as one of its causes and effects.

V

vertical integrationbackward vertical integration, forward vertical integration: A merger or takeover between firms at different stages of the same supply chain — backward (acquiring a supplier, moving upstream) or forward (acquiring a distributor/retailer, moving downstream) — which replaces a market transaction with an internal one, securing an input's cost, quality or supply, or a guaranteed route to the customer.
voluntary export restraintVER: A quota a country agrees to apply to its OWN exports, at another country's request, instead of the importing country imposing an import quota unilaterally — the mechanism behind the US-Japan car VER of the 1980s, credited as a direct driver of Japanese automakers building US-based ('transplant') factories to serve the US market from inside it, sidestepping the export cap entirely.

W

World Trade OrganizationWTO: The multilateral body overseeing global trade rules and settling disputes between members, built on a principle of non-discrimination between trading partners (most-favoured-nation treatment) — a principle trading blocs formally depart from by design, the structural source of tension between the bloc system and the WTO's own multilateral approach.