4.7 Globalisation Flashcards
0
Q
Disadvatanges of multinational [6]
A
- Poorer communication with headquarter
- Difference in language/culture
- Legal differences - product safety of cigarettes
- Exchange rates
- Storage, transportation and distribution costs
- Infrastructure
- Political/economical conditions - terrorism, tax rate
1
Q
Advatanges of multinational [6]
A
- Closer to main market
- Lower costs of production + transportation cost
- Avoid import restrictions (eg. tax)
- Access to local natural resources
- Expand markets for more profit
- Spread risks
2
Q
Effects of multinationals in host countries [6]
A
- Create jobs
- Increase GDP
- Technology transfer
- Create competition
- Social responsibility
- Unemployment
3
Q
Multinational company
A
- Operates in two or more countries
* Headquarter often in developed country
4
Q
Trading bloc
A
A group of countries agree to trade freely with each other
5
Q
Advatanges of trade bloc [4]
A
- Access to greater size of market for export
- Competition –> efficiency + productivity
- More variety with lower price
- Greater political stability
6
Q
Disadvatanges of trade bloc
A
- The role of World Trade Org is undermined
* Impede trade liberalisation
7
Q
Common markets
A
• Allow investment in each country
8
Q
Free trade area
A
- NAFTA (US, Canada, Mexico)
* No tariffs"as between themselves
9
Q
Economic and monetary unions
A
- Euro-zone (not UK, Denmark b/c they do not use Euro astheir currency)
- to create the economic conditions that exist in just one country
10
Q
Ansoff’s matrix
A
Market peneration, product development, market development, diversification
