TJK manufactures candles．Contributing to sustainable development is important to TJK．The business uses batch production in its factory in country X ．The target market for TJK＇s products is females between 20 and 50 years of age．The Managing Director is reviewing TJK＇s financial data． An extract is shown in Table 3．1．He is also considering the benefits to a business of becoming a multinational company． Identify four benefits to a business of becoming a multinational company． Benefit 1： Benefit 2： Benefit 3： Benefit 4：

Business

IGCSE&ALevel

CAIE

Exam No：0450_m25_qp_12 Year：2025 Question No：3(c)

Answer:

Award 1 mark for each relevant benefit [max 4].
Points might include:
- Increased sales/access to bigger/new markets
- Better reputation/image
- Lower transport costs
- Avoid barriers to trade
- Spread risks
- Easier access to raw materials
- Access to cheaper labour
- Take advantage of lower tax rates
- Access to government funding/grants

Other appropriate responses should be credited.

Knowledge points:

6.3.1.1. The concept of globalisation and the reasons for it

6.3.1.2. Opportunities and threats of globalisation for businesses

6.3.1.3. Why governments might introduce import tariffs and import quotas

6.3.2.1. Benefits to a business of becoming a multinational and the impact on its stakeholders

6.3.2.2. Potential benefits to a country and/or economy where a MNC is located, e.g. jobs, exports, increased choice, investment

6.3.2.3. Potential drawbacks to a country and/or economy where a MNC is located, e.g. reduced sales of local businesses, repatriation of profits

6.3.3.1. Depreciation and appreciation of an exchangerate

6.3.3.2. How exchange rate changes can affect businesses as importers and exporters of products, e.g. prices, competitiveness, profitability (exchange rate calculations will not be assessed)

Answer:

Knowledge points:

Solution:

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