Globalisation Flashcards
What are the impacts of globalisation?
Imports:
-competition from overseas: may sell similar products already established in another country
-buying from overseas
Exports:
-selling to overseas markets: increasing revenue
-changing business locations: a business may decide to move their entire business operations abroad. This is called offshoring
-multinationals: may decide to trade in more than one country
What are Barriers to international trade?
Tariffs- these are taxes placed on imports to increase their price and to decrease their demand
They can be adjusted by governments to raise revenue and to limit imports.
The tariff is used to persuade customers to by UK produced products rather than one from abroad
What are the advantages of tariffs?
- Uk produced goods do no pay tariffs so should be cheaper
- Tariffs allow UK goods to gain a price advantage
- Tariffs can protect a market from being taken over by international competitors
- Can raise revenue for governments to spend on the UK
What are the disadvantages of Tariffs?
- Some customers will pay the higher price for the imported goods
- Tariffs will increase the costs for all customers
- Other countries may impose tariffs on UK goods as we have imposed the tariff on them
What are trade blocs?
Group of countries that make a trade agreement not to place a tariff on imports
What is E-commerce?
A business can use the internet to buy and sell products online
What is product?
This may need adapting to suit local tastes, colours, the name may need to be changed
What is Place?
A business may need to find a reliable method of transporting their goods to international customers
What price?
Prices may have to be adjusted to take account of foreign wage rates E.g penetration pricing
What is Promotion?
This will need to be the right promotion to encourage foreign customers to try the product. E.g. multipack deals
What are ethics?
Ethics is the understanding of what is right and wrong.
What are examples of ethics?
- paying workers a fair wage
- providing good working conditions
- not polluting
- not to exploit people
- not to harm the planet
What is a trade off?
A trade off in business is compromising between two different items
An example of a trade off?
When share holders want to maximise profits. It could be expensive and affect profits
What is a pressure group?
An organisation that try to influence businesses to conduct their business in a certain way. This could be not to harm the environment and also treat workers fairly.
