3.1.2 Patterns of production, distribution and consumption

Question 1

Containerisation

Answer 1

A system of standardised transport that uses standard-size steel boxes to transport goods. These can be transferred between ships, trains and lorries, enabling cheaper, efficient transport.

Question 2

Protectionism

Answer 2

A deliberate policy by governments to impose restrictions on trade in goods and services with other countries – usually done with the intention of defending home-based industries from foreign competition.

Question 3

Footloose

Answer 3

When a business can locate anywhere with internet and can serve customers worldwide.

Question 4

Tariffs

Answer 4

A tax or duty placed on imported goods with the intention of making them more expensive to consumers so that they do not sell at a lower price than home-based goods.

Question 5

High-level services

Answer 5

Services to businesses.

E.g. Finance, investment, law, advertising

Question 6

Low-level services

Answer 6

Services to consumers. E.g. Cleaning, travel, call centres, communication services

Question 7

Global marketing

Answer 7

Strategies that are affecting the structure of a modern global business.

E.g. Sony, a Japanese tech company moved their global HQ from Japan to the US in 2017 in order to have all decisions made closer to where it happens.

Question 8

Conglomerates

Answer 8

A collection of different companies or organisations which may be involved in different business activities but all report to one parent company.

E.g. Most TNCs.

Question 9

TNC

Answer 9

An organisation that operates in one or more countries, with no centralised management system.

E.g. Apple

Question 10

Economies of scale

Answer 10

The cost advantages that result from the larger size, output or scale of an operation as savings are made by spreading the costs or rationalising operations.

Question 11

Production

Answer 11

The manufacturing from raw materials to the point when they are ready for delivery.

Question 12

Distribution

Answer 12

Networks and organisational routes trough which goods are transported or delivered to their markets.

Question 13

Consumption

Answer 13

The act of purchasing the goods for final/end use.

Question 14

The Global Shift

Answer 14

Where manufacturing moved from HICs to NEEs.

Question 15

Likely causes of the global shift

Answer 15

• Technological advancements with improved distribution
• More unionised workforce in HICs, with strict regulations and higher wages.
• Relaxed or non-existent environmental regulations in NEEs

Question 16

What did the global shift cause in HICs?

Answer 16

De-industrialisation

Question 17

What happened to employment in manufacturing in the 30 years between 1983 and 2013?

Answer 17

Fell by around 50%

Question 18

Nissan in Sunderland

Answer 18

Nissan moved to North East England (Sunderland), with the aim of gaining access to EU markets. The CEO of Nissan said Nissan would likely withdraw from the UK if Brexit happened (but they haven’t left).

This was encouraged by the government providing free land – this was a large piece of brownfield land, with good infrastructure. It is flat and close to nearby ports.

Question 19

Why did Nissan move to Sunderland?

Answer 19

By moving to the UK, they could get quota/tariff free trade in the EU market.

• (They went against the global shift).

Question 20

What did de-industrialisation do to the North East?

Answer 20

The North East was home to many skilled industries (e.g. coal mining/steel) which closed down, leaving many unemployed.

Question 21

Special Enterprise Zones (SEZ)

Answer 21

Area of land given by the government which comes with benefits for investors, such as reduces taxes and regulation.

Question 22

Why do TNCs relocate?

Answer 22

• Special Enterprise Zones (SEZs)
  o Tax incentives
  o Cheaper land
• Cheaper/plentiful labour
• Relaxed regulations
• Unionised HICs
• Technology
• Stable government
• Trade agreements/access to markets

Question 23

Positives of the global shift

Answer 23

• Cut costs for consumers
• New industry for new country
• Cheaper manufacturing, and therefore more profits for TNCs
• Jobs in NEEs
• Investment from TNCs (FDI)
• New markets for NEEs
• Information/service shift of employment in HICs.
• Opportunity to retrain

Question 24

Negatives of the global shift

Answer 24

• Job losses
• Deindustrialisation
• Long-term generational and structural unemployment in HICs
• Poorer working conditions; vulnerable to exploitation
• Unskilled labour unemployed
• Decline of industrial heartlands – negative multiplier effect.
• Relaxed environmental laws, leading to exploitation
• Created outmigration

Question 25

Marks & Spencer in China

Answer 25

M&S is a UK brand started in Leeds, however one of their largest stores is in Beijing, China.

A new consumer/middle class is emerging In China, as they moved from producers to consumers.
China is known as a “two speed society” because there is economic inequality.

M&S first opened a store in China (Shanghai) in 2008.

Question 26

Specialisation

Answer 26

Where a company focuses on a specific task. This helps to improve efficiency and means resources can be better allocated, allowing for production to be increased.

Question 27

Case study for specialisation

Answer 27

Songxia (umbrella city)

Question 28

Umbrella City (Songxia)

Answer 28

• Around 70% of the world’s umbrellas are made in China.
• Described as the umbrella capital of the world.
• Half a billion umbrellas are made here annually in 1200 factories.0
• A single worker makes 300 umbrellas per day.

Question 29

Comparative advantages

Answer 29

Where a country/company can produce a good or service at a lower opportunity cost than another.

Question 30

Application of comparative advantages to Umbrella City

Answer 30

To apply to this situation, Songxia is able to produce umbrellas at a lower cost than other places. This gives them an advantage and encourages production to stay in the region.

Question 31

Opportunity cost

Answer 31

The value foregone on the next best alternative.