311 Globalisation Flashcards
What is globalisation?
Globalisation is a process in which economies have become increasingly integrated and interdependent.
Factors which have contributed to globalisation?
Improved communication technologies
Liberalisation of trade
Internet
Cost of transportation
Consumer tastes.
How has technology contributed to a globalised workforce?
People are able to remote work from across the globe.
Benefits of a globalised workforce?
More diverse ideas
More innovation
Spreads risk.
Benefits of removing tariffs/quotas? (Liberalisation of trade)
Lowers cost for UK manufacturers as stock can be imported cheaply.
How does added value link to globalisation and containerisation?
Quicker and cheaper to export good worldwide leading to higher profit margins as lead time is reduced.
Drawbacks of globalisation?
Culture clashes
More risk when trading abroad
PESTLE impacts more
Loss of domestic culture
Increased competition
More risk of unethical practices
Supply issues.
What is a developing market?
Country with a growing economy and a growing consumption population.
Strengths of trading in developing markets?
Fast growing GDP so increasing incomes
First mover advantage
Labour/raw materials more available and affordable
Less strict labour laws
Weaker exchange rates.
Threats of trading in a developing market?
Political/economic instability
Lack of infrastructure
Limited skills
More risky as unknown.
3 global growth strategies?
Develop global brand
External growth
Identify target markets.
Benefits of developing a global brand?
Clear differentiation between competitors
Brand loyalty
Easier to enter new markets based on existing brand strengths.
What do the benefits of developing a global brand depend on?
Capital available for market research
Culture/tastes of country
Consistency of brand in each country.
Benefits of external growth/takeover?
Fast
Uses already established brand/knowledge
increased market share
access to resources.
What do the benefits of external growth depend on?
Capital available
Culture clashes inside firm
Ability to protect each brand reputation.
Benefit of target markets?
Can lead to brand loyalty.
What do the benefits of finding new target markets depend on?
Quality of market research
competition.
what is glocalisation?
a business thinking globally but acting locally by considering local tastes, customs an traditions when adapting marketing mix.
what is a globalised/standardised approach?
where a business maintains same marketing mix in each country.
benefits of standardisation?
economies of scale
specialisation/efficiency
brand loyalty/image - meeting same expectations globally.
limitations of standardisation?
longer supply chains.
may not meet cultural expectations in each country.
difficult quality management.
different laws everywhere to manage.
benefits of organic growth/maintaining marketing mix?
stays true to brand’s identity
less risk
cheaper
limitations of organic growth/maintaining marketing mix?
very time consuming
may miss opportunities
benefits of outsourcing to developing countries?
cheaper labour costs
spreads risk
wider markets
limitations of outsourcing to developing countries?
ethical implications
may get rep for poor quality
tariffs
benefits of a glocalised approach?
meeting customer needs
spread brand awareness
more diverse workforce - new innovations
drawbacks of a glocalised approach?
high market research costs
less efficient
what are multinational companies?
businesses operating in a number of countries, whether extracting resources, manufacturing, retailing or a combination.
what must a business consider before choosing to operate as a multinational company?
promotional strategies - are they suitable?
product modifications
pricing
laws
positives on countries of having MNCs there?
create wealth and jobs
economies of scale may mean they can offer lower prices
know it will be good standard
drawbacks for countries of having MNCs there?
profit at expense of consumer especially monopolies.
tax avoidance
hard for small firms to thrive
don’t care about environment
ethical implications around labour wages
