2.1.3- business and globalisation Flashcards
what is globalisation?
the process by which businesses and countries around the world become more connected. becomes easier to import and export products
what is the impact of imports on businesses?
firms have a larger market to buy from so they may be able to buy suppliers more cheaply which reduces costs and can increase profits
more imports means there’s more competition in a country so firms may be forced to reduce their prices to stay competitive
what is the impact of exports on businesses?
able to export goods easily meaning firms have a larger market to sell to leading to increased sales and higher profits
what is the impact of globalisation on business location ?
easier for businesses to locate parts of their business abroad allowing them to reduce their costs so they can make more profit
some firms may also set up in countries where labour is cheaper which helps to keep their costs down
what is a multinational?
single businesses operating in more than one country
what is the impact of multinationals on businesses?
when a big multinational business enters a new country firms already in that country may need to change the way they operate in order to compete successfully
what are the barriers to international trade?
tariffs- taxes on goods being imported or exported. they make products imported into a country more expensive that those that are produced in the home country, this helps domestic firms stay competitive
trade blocs- groups of countries that have few or no trade barriers between them. firms from countries outside the trade bloc will find it hard to compete with those inside as their prices will be affected by having to pay tariffs.
how do businesses compete internationally through the use of e-commerce?
firms can use e-commerce to sell products via the internet, this means they can compete overseas without having to set up stores and infrastructure in foreign countries which keeps their costs down
how do businesses compete internationally through the marketing mix?
firms may change their marketing mix in different countries e.g target products at the country’s culture- like a special seasonal menu to fit in with Chinese New Year
