Globalisation Flashcards
What is globalisation?
Increased integration and independence of national economies
OR
The world coming together to trade in each other’s markets
NOT TANGIBLE-ITS A PROCESS
Which factors have facilitated this level of imports?
Reduced trade restrictions Lower cost of production abroad Ease of travel/transportation Rise of e-commerce/internet Communication technologies Easy movement of capital Rise of multinationals
Define multinationals
A business that has activities and operations in more than one country
Why are so many companies keen to be multinationals?
Economies of scale obtained as production increases
Ability to take advantage of lack of legal constraints
Can enter new markets where less competition exists
Ability to take advantage of low wages
What is a LEDC?
Less economically developed country
What is a MEDC?
More economically developed country
What are some positive effects of multinationals?
Employment opportunities for LEDC’s
Develops local skills in LEDC’s+decease poverty
Develops local area around factories-investment in infrastructure
Utilise local areas goods
What are some negative effects of multinationals?
Mostly unskilled jobs
Low wages
Difficult/unsafe conditions
Lack of children’s education as they’re out working
Drives out local businesses
Corporation tax in LEDC doesn’t always go to them
Why are some businesses more affected than others by globalisation?
Their brand/associated products are appealing to consumers across the globe Businesses whose products appeal to the middle class-as the class is increasing, demand may increase
Define strategy
A plan of action
Define global strategy
A plan of action on a global scale
Define brand
A distinctive product-logo, symbol, name, design, packaging or combination of them
Define global brand
A brand that is recognised throughout much of the world
With a rise in the no. and value of global brands, what threats does this present to local/national businesses?
May be driven out-global brands more recognisable and often have lower prices due to factories abroad
Downward pricing pressure-global brands offer products cheaper-global brands benefit from economies of scale, so lower price point can reflect on the customer’s price point-smaller businesses would lower prices to remain competitive
What opportunities do global brands present in developing countries?
Supply chains-quickened-demand for product increases so demand for factories increase-increases efficiency in factories
New ideas-improved marketing process-smaller businesses look to them for inspo in trends/advertising
New markets-high disposable income
Investment opportunities in infrastructure/production
