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"The EU is less than half the size of the United States, but its population is over 50% larger - Leaving Cert Business - Question 3(A) - 2009
Question 3(A)
"The EU is less than half the size of the United States, but its population is over 50% larger. In fact, the EU population is the world’s third largest, after China ... show full transcript
Worked Solution & Example Answer:"The EU is less than half the size of the United States, but its population is over 50% larger - Leaving Cert Business - Question 3(A) - 2009
Step 1
Evaluate the opportunities for Irish business in the EU Market.
Answer
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Free access to the EU Market for Irish exports: The EU market is significantly larger and provides expanded opportunities for Irish businesses to export their goods and services.
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Free movement of services, labour, and capital: Irish construction sectors, for example, have benefitted from the availability of Polish and other EU workers. This enables businesses to access a broader talent pool.
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Harmonisation of Tax rates: This reduces price differentials and competition, allowing Irish businesses to operate on a more level playing field across member states.
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Lower transport/distribution costs: With closer proximity to additional markets, the costs of distribution and the administrative burden can be significantly reduced.
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Public Procurement opportunities: Irish businesses can now compete for opportunities in public procurement across EU member states, broadening their client base.
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Access to Structural Funds: Ireland is eligible for these funds which can be used for infrastructure improvements, thereby boosting local businesses.
Step 2
Evaluate the challenges for Irish business in the EU Market.
Answer
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Ireland’s small economy: As one of the smaller economies in the EU, Irish businesses may find it challenging to compete against larger firms from other EU countries.
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Increased competition: The EU market opens up increased competition from businesses based in other member states, leading to challenges in maintaining market share.
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Vulnerability to regulatory changes: Since the EU operates with a single set of laws, changes in regulations can have significant impacts on Irish businesses without local control or influence.
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Product differentiation: Many products must adhere to EU-wide standards, which can limit the scope of innovation or differentiation.
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Dependency on larger markets: As Irish businesses grow, they may become reliant on larger EU markets, which can create vulnerabilities if those markets experience downturns.
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Intellectual property concerns: Protecting intellectual property can be more complex as businesses have to navigate varying protections across member states.