2. Explain the main differences between globalization of markets and globalization of production. How do these create opportunities and challenges for business managers?

Question 1

What’s in the Intro

Answer 1

Held et al (1999)

The two types of globalisation is globalisation of markets and globalisation of production

Question 2

Merely state The main differences

Answer 2

1. Definitions
2. How they developed
3. Impact on company’s profits

Question 3

Definition of Globalisation of markets

Answer 3

The globalisation of Markets:
Refers to separate and distinct markets merging into one which allows them to offer the same products and services they make domestically, worldwide

This means that consumers tastes and preferences are merging as well as domestic markets are becoming more global

Question 4

Definition of Globalisation of production

Answer 4

The globalisation of production:
Outsourcing and finding talent in low-cost countries to take advantage of the prices differences

This allows them to find more talent + core competencies

EG Primark went to India

Question 5

How did Globalisation of Markets Develop?

Answer 5

The globalisation of markets developed:
Because of merging countries which meant that consumers taste merged and then there was a global need and wants

EG McDonalds took their standard hamburger and made it available worldwide

Question 6

How did Globalisation of Production Develop?

Answer 6

The globalisation of Production Developed:
Coz of advancements in technology which allowed efficient communication + finding better sources and people

Eg Boeing’s recent aircraft, 65% of its materials are from France and Italy

This allowed…

Question 7

How Globalisation of Markets impact on a company’s profits

Answer 7

Impact: Because usually bases around the world = increase in expenditure as they are not focusing on the one location anymore

However, profits will increase from their success since if they are able to adapt into the foreign market

Question 8

How Globalisation of production impact on a company’s profits

Answer 8

Impact: Reduce

Question 9

Opportunities for globalisation of markets and production

Answer 9

globalisation of markets:
Reach more customers coz they are operating globally

EG selling more products globally

= more growth

Globalisation of production:
Work with better resources and ppl

= minimise labour costs

Eg Vodaphone

Question 10

Main challenges for globalisation of markets and production

Answer 10

globalisation of markets:
Understanding culture & politics

EG Mcdonalds they sell spaghetti in the Philippines

Globalisation of Production
= need to be ethical

Eg Primark= child labour= bbc panorama = now they have an ethics trade team