2.4 Globalisation

Question 1

Globalisation

Answer 1

Process of countries around the world becoming more interconnected.

Question 2

Techniques UK businesses use to compete internationally.

Answer 2

• Better designs.
• Better quality products at lower prices.

Question 3

Advantages of globalisation

Answer 3

• Reach new markets - increase sale opportunities and revenue growth.
• Access new resources at competitive prices, lowering production costs.
• Increased innovativeness - unique and better quality products to stay competitive.
• Spread risk - one market may fail but you still have others.

Question 4

Disadvantages of globalisation

Answer 4

• Cultural barriers - need good understanding of different cultures when trading internationally.
• More competitors.
• Job loss - change production place to cheaper countries, affects UK economy.

Question 5

Impact of fluctuating exchange rates on profits and sales.

Answer 5

SPICED: pound appreciates, cheaper to get raw materials, etc. abroad, sales abroad may drop as it’s more expensive for them to buy.
WPIDEC: pound depreciates, more expensive to get raw materials, etc. abroad, sales abroad may increase as it’s cheaper for them to buy.