Global Business Flashcards
Multinational Company
one that operates in 2 or more different countries. These operations are managed from the company’s headquarters in their home countries.
Why do MNC’s locate in Ireland
-low corporations tax rate
-IDA attracts them
-skilled and educated workforce
-member of the eurozone
-member of the EU
2 Benefits of MNC’s in Ireland
DIRECT EMPLOYMENT- more than 230000 employed by MNC’s in Ireland. This keeps people here rather than them emigrating.
INCREASED TAX REVENUE- taxes by both the business and employees are collected and used for our good.
2 Challenges of Having MNC’s in Ireland
SMALL IRISH CAN’T COMPETE- intelligence forms that do not benefit from economies of scale might close down if the MNC’s are able to sell at a lower price. This causes unemployment.
OVER RELIANCE ON MNC’S- they have less loyalty than indigenous firms and are likely to up and leave at any point. We can rely too much on money made from corporation tax
Global Business
sees the world as one giant market and provide the same undifferentiated product worldwide. It can sell the exact same good (standardised marketing mix) or it can adjust how it sells in different areas (adapted marketing mix).
Globalisation
the development that are changing markets from operating in individual countries to one integrated world economy and market place in which to sell goods and services.
Impact of Globalisation on Consumers
consumers will get a wider variety of product to choose from. Consumers from other countries will now get to buy more Irish products which will lead to the growth of the Irish economy
Impact of Globalisation on Irish Exporters
Irish firms will have to invest more in R&D in order to provide products with a USP to survive from global firms
Impact of Globalisation on the Government
Globalisation could be viewed as a threat to the Irish Economy as Irish Firms may lose out to cheaper alternatives. This would lead to a decline in the domestic economy which in turns leads to higher unemployment and falling tax revenues for the government and more government expenditure through social welfare.
5 Tech developments that have facilitated Globalisation
CAD
EDI
Social Media Marketing
Improved Distribution
Internet
Global Marketing
the idea that a global business tries to treat the world as one marketplace and that the product can be marketed the same everywhere.
2 Types of Global Marketing
Standardised Marketing Mix
Adapted Marketing Mix (Global Product, Global Price, Global Place, Global Promotion)
Standardised Marketing Mix
the sale of a product by a business with an undifferentiated approach to its marketing mix i.e. the 4 p’s are the same no matter what country you’re in
Adapted Marketing Mix
an adaptation by a business of its marketing mix to suit local market needs
GLOBAL PRODUCT
-adapted to reflect local languages and legal requirements
-different countries might have different legislations about recycling so the product may need to be changed.
e.g. cars adapted for different sides of the road
GLOBAL PRICE
-cost of living needs to be considered to determine the amount of disposable income available
-taxes and charges
GLOBAL PLACE
-different channel of distribution
GLOBAL PROMOTION
-differences in culture and legislation and language needs to be considered. What one thing means in one language could mean something completely different in another.
4 Types of Global Channels of Distribution
DIRECT EXPORT- using e-commerce to sell directly to the consumer.
OPENING A BRANCH- exporting into a different country by opening a new location
FRANCHISING- allow a franchise to open a business in a different country
AGENT- using an independent person or firm to sell the product in a different country for you.
