1.6

Question 1

A&F means (flows of people, money and goods)

Answer 1

1. taxes paid to US
2. cheap labour (from factories in India and China where child labour is legal)
3. local markets (constructing and selling products within a trade bloc to reduce trade tarrifs -> allows products to be glocalised) eg A&F opening as a joint venture in UAE

Question 2

how does A&F make profits (motive)

Answer 2

1. horizontal integration
   - sold hunting wear and novelty items by mail order
   - was by “The Limited” and merged to sell niche clothes to the ‘youth market’
2. vertical integration
   - A&F subcontracts “that’s it sportswear” (profits due to cheap labour)
3. merged with Hollister and Gilly Hicks (economies of scale)

Question 3

A&F mobility

Answer 3

• faster cheaper transport (goods to shops in 10 days)
• companies use cloud-computing
  subcontracts GT Nexus

Question 4

role of TNC’s

Answer 4

bolt together different markets with different supply chains eg A&F is based in Ohio, USA, but has recently opened in the UAE​
They grow the imports / exports of countries

Question 5

What is outsourcing?

Answer 5

business makes a contract with another company to complete some of the work ie making products or providing a service. the aim is to reduce costs as companies can do the work at a lower cost
eg A&F / A&F Kids, Hollister, Gilly Hicks, all make use of That’s It Sportswear (Bangladesh)

Question 6

What is offshoring?

Answer 6

move operations to another country – e.g. China, Vietnam, India and Guatemala have cheap labour

Question 7

What are Global Production Networks?

Answer 7

companies aren’t tied to locations anymore so size and density can grow
can be risky as natural hazards can disrupt supply chains or poor working conditions can ruin reputations