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A2 Business Studies Unit 6 - Political Change. Opportunities and constraints created by changes in UK and Central and Eastern Europe (CEE). The impact of political change in the UK.

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a2 business studies unit 6 political change

A2 Business Studies Unit 6 - Political Change

Opportunities and constraints created by changes in UK and Central and Eastern Europe (CEE)

the impact of political change in the uk
The impact of political change in the UK
  • Conservative government (led by Margaret Thatcher in 80s & 90s) introduced a policy of deregulation and privatisation which created competition in markets :
  • E.g. Telecoms (BT), airlines, utilities, financial services etc
  • Laws introduced to reduce the power of trade unions and make the labour market more flexible
  • Flexible = easier to hire and fire workers

Picture sourced from http://www.rte.ie/news/features/westminster_election/images/thatcher.jpg

the fall of communism
The Fall of Communism
  • Eastern European countries such as Hungary, Poland, Bulgaria etc were controlled by the USSR
  • Products and services were provided by state- owned monopolies (little choice, no competition, thought to be inefficient)
  • A move from planned to free market economy
  • This has led to privatisation with a move of assets from the public to private sector

Picture sourced from http://en.wikipedia.org/wiki/USSR

opportunities in central and eastern europe cee
Opportunities in Central and Eastern Europe (CEE)
  • UK firms can sell to 100 million people who want Western brands
  • Rent, land, and labour is cheaper
  • Less controls on health and safety and pollution
  • Planning permission for factory is easier
  • Grants and low taxation to attract foreign firms
eu businesses in cee markets
EU Businesses in CEE markets
  • EU Businesses have taken advantage of the CEE market through:
  • Joint ventures - EU firms provide cash, machinery skills, Host firm provides staff, land, buildings
  • Technical co-operation - allows co-production and joint assembly
  • Selling technology and expertise - often licenses to produce particular products e.g. Coca-Cola in Bulgaria
constraints in central and eastern europe
Constraints in Central and Eastern Europe
  • Average incomes are low so consumers cannot afford many luxuries
  • Economic and political instability makes trading conditions unpredictable
  • Excessive bureaucracy – too much paperwork. CEE countries are working hard to improve this.
  • Poor infrastructure – transport links, communication and distribution systems
  • Under-developed financial sector (banks, insurance, stock market)
  • Weaker legal systems (fraud, bad debts)
gross national income
Gross National Income
  • Bulgaria - GNI per capita: US $2,740
  • Turkey - GNI per capita: US $3,750
  • Slovakia - GNI per capita: US $6,480
  • United Kingdom - GNI per capita: US $33,940
student activity
Student Activity
  • Complete the Political Change case study on Slovakia
  • Answer all questions using full exam technique (Content, Application, Analysis and Evaluation.)

Pictures sourced from http://www.aeroflight.co.uk/waf/slovak/slovakia.gif and http://www.anadigics.com/pics/map-Europe.gif