Globalisation Flashcards
What is Globalisation?
The process by which businesses and countries around the world become more connected.
How is having a larger market to sell to an advantage for businesses using Globalisation?
Can lead to increased sales and higher profits. Having a larger market to buy from means firms may be able to buy supplies more cheaply, which reduces costs and can lead to higher profits.
How is setting up factories in other countries an advantage for businesses using Globalisation?
This can reduce their transport costs if it means they’re producing goods closer to certain parts of their market or closer to where raw materials are produced. Companies also don’t have to pay import taxes.
Why do some countries purposely set up factories in countries where labour is cheaper?
Helps to keep their costs down and can increase profits.
How does Higher wages in the UK a disadvantage for globalisation?
Some UK industries can’t compete with firms from other countries.
How does other countries having different currencies to the UK, a disadvantage for UK businesses using Globalisation?
If a business is buying or selling products in other countries, its profits are likely to be affected by changes in the exchange rate.
What is the negative thing that could happen if a business purposely sets up factories abroad to benefit from cheap labour?
May get bad publicity if they’re seen to be exploiting or endangering workers in these countries.
