1. Globalisation Flashcards
1
Q
What is Globalisation in Business?
A
GLOBALISATION :
- when a business BUYS and SELLS around the world
- it can choose to put its factories where LABOUR is CHEAP - this will keep COSTS down and therefore increase profits
- it can buy CHEAP parts
- Globalisation means that the business can SELL to many different countries - increases its MARKET SHARE and profits
- Globalisation means that the business can BUY from many different countries - get cheap prices & negotiating deals which means increasing its profits
- Could FRANCHISE to expand brand overseas
- Easy because of increases in technology
2
Q
Why is a GREAT PRODUCT DESIGN important for a GLOBAL COMPANY?
A
W great product design will make a product:
- STAND out from the COMPETITION in a GLOBAL MARKET
- INCREASE SALES - INCREASE PROFITS
3
Q
How can a GLOBAL COMPANY compete with its COMPETITORS?
A
A GLOBAL company can COMPETE with its COMPETITORS:
- On QUALITY - eg high quality raw ingredients such as good quality cloth of food items
- On PRICE - eg they could offer customers the cheapest price
- On PRODUCT range - eg they could offer the GREATEST VARIATION of flavours - customers will be attracted to a large company with the best choice
4
Q
Work force and globalisation
A
Work force and globalisation
- A global company can choose where its products are made - need to be NEAR RAW MATERIALS & CHEAP WORKFORCE
- eg if Spanish minimum wage is 756.70 per month and UK is 1378.90 the company will choose to have their product paid where LABOUR COSTS ARE CHEAPEST - to keep its costs LOW and make MORE PROFIT
- if the factory is in SPAIN near the SPANISH FARMS - it should locate the factory in Spain; FRESH local ingredients, reduced transport costs - save on costs, increase profits
5
Q
What are IMPORTS?
A
IMPORTS are goods bought in from another country - eg cheese from Italy, cars from Italy
6
Q
What are EXPORTS?
A
EXPORTS are goods sold to another country eg we well honey made from our bees to other countries
