Globalisation Flashcards
The names of companies that operate in many countries
Transnational corporations (TNC)
What is globalisation?
The way ideas, companies and lifestyles spread around the world.
We are increasingly linked to people around the globe.
Simple shopping decisions can effect people thousands of miles away.
Where do raw materials normally come from?
LEDCS
Where is the final assembly of a product held?
LEDCs where wages are low
Where are the manufactured components of an item sourced?
MEDCs eg. A zip
Where is a brand name from?
MEDCs
Largest share of money spent by shoppers go..
To the MEDC
Why do companies expand?
To increase profit
What is increasing revenue?
The money made from selling goods and services.
Moving manufacturing jobs to LEDCs does what?
Reduces cost as wages are low
Cost:
The money spent on making or selling the good/service.
Profit equation
Revenue-cost=profit
How nike increases it’s profits: reducing cost
Close trainer factories in USA
Sponsors top school sports teams
Own no trainer or clothing factories.
Gets 40% of its trainers made in China
How nike increases it’s profits: increasing its sales
Runs a website
Employs sport scientists
Brings out new styles regularly
Opened a branch office in Australia.
Advantages of globalisation
TNCs provide jobs in LEDCs which helps LEDCs develop.
Helps LEDCs make use of their resources.
TNCs produce large profits (good for shareholders and staff)
Spread ideas and influences from home country.
Break down barriers between countries
Gives consumers more choice.
Disadvantages of globalisation
Some TNCs are more powerful than government even though they’re not elected and their decisions are based on profit.
TNCs exploit LEDCs for their cheap labour. Moving jobs to LEDCs means unemployment in MEDCs.
Many LEDCs have loose enviromental laws. TNCs exploit this and pollute heavily.
Smaller local comapnies struggle to compete against TNCs.
Spread influence of their own country, undermining local culture.
Social disadvantages
A lot of people think that their culture is being eroded and setting a bad idea in the heads of the next generation.
Economic disadvantages
TNCs aren’t helping the countries where they have branches.
Where is coffee grown?
Needs warmth and moisture to grow, so grows in the tropics of LEDCs.
Explain a ‘cash crop’
Most coffee is drunk in MEDCs so it is a cash crop for LEDCs
Inside a coffee cup:
How much do growers get?
Who get the most money?
What is a commodity?
Growers get the least.
Roasters and processes get the most.
A commodity is any product that can be bought and sold.
