2.1.3 Business And Globalisation 📇 Flashcards
What is globalisation?
Business operating in an international scale
What are the impact of globalisation on businesses ? (8)
Importing
Exporting
Balance of UK trade
Services
Business locations
Multinationals
Types of trade blocs
What are the advantages and disadvantages of importing?
Advantages-
Cheaper - less fixed /variable costs for businesses and customers
Increase range of products Available
Disadvantages-
if pound is weak cost of imports are influenced by currency fluctuations - causing uncertainty
Risk of delay
Increased competition of businesses abroad
Environmental impact
What is the Balance of UK trade
What is a trade deficit?
Difference between the amount of imports + exports
Import more Than we export? Trade deficit.
What is offshoring? Why do we do it?
When a business a while or a part of a business overseas
We do it as it’s closed to demand
Costs are cheaper
To overcome protectionism
What is outsourcing?
When someone else operates your business abroad
What are disadvantages of offshoring?
Wait longer for supplies
Lack of communication
Additional management costs
More exposed to change in economy
What are multinationals?
Businesses that trade in more than one country
What are some barriers to international trade?
Trading blocs - group of countries who make a tread agreement to not place tariffs on imports
Types of trade blocs ? (4)
1.Free trade area NAFA - can race with no barriers
- Custom unions - free trade + agreement about trading with other countries
- Common market - free trade of people on international trade / movement of people
- Economic union - common market free trade free movement
Why was the EU a fail?
Don’t have enough people to carry out certain roles
What are the negatives of Brexit?
- Unable to tread freely with EU countries
- Less negotiable power as a single country
- We exported and imported from EU
- Now have to pay Tariffs
What are the positives of leaving the EU as the UK?
- Can set own rules and regulations freedom
- Can set own trade deals
- More control on who enters the country
What is a tariff?
An tax placed on an imports to increase its price and decrease its demand
What are positives of tariffs?
- Helps consumers to switch and purchase off British business , helping support the UK’s economy
- Gov makes more money to invest in country
- Protects UK businesses - employ others able to pay income tax
