Globalisation Flashcards
What is globalisation?
Ways in which a country becomes increasingly connected with each other
How does globalisation occur?
- an increasing volume and variety of trade in goals and services
- increased spread of technology
What is the primary industry?
The extraction of raw materials from the land or sea
What is the secondary industry?
Manufacturing where raw materials are converted into a fishing product
What is the tertiary industries?
There is a wide range of service industries associated with both manufacturing (retailing) and people (education)
What is quaternary industry?
Provide information and expert help
They are often associate with creative or knowledge based industries
What is meant by consolidation?
Involves merging with companies that make similar products
What is meant by conglomeration?
Involves buying companies which make different products to make conglomerate
What is TNC growth?
Growth in sales of popular products
What is TNC merger?
Merger with other companies by consolidation or creating a conglomerate
How do TNCs grow?
By moving their operations to different countries
Why is brand recognition important?
It can help companies become global and due to global shift
WTO
World trade organisation
promotes free trade by persuading countries to reduce or remove trade barriers like taxes, tariffs
UN
United Nations
IMF
International Monetary Fund
gives loans to developing countries for infrastructure and encourages countries to create new jobs
TNC
TransNational Corporation
aim to reduce costs and increase profits by moving factories to cheaper locations
creates new jobs in developing countries
How does the IMF TNC and WTO encourage the world to be more global?
Free trade
Reducing State involvement
Privatisation
What are the 4 main functions of the IMF?
Stop existing crisis
Stop potential future crisis
Check investments
Reduce global poverty
What is trade?
The action of buying and selling goods and services
What is FDI?
Foreign Direct Investment FDI is direct investment into a foreign country, the pattern and quantity has changed overtime due to globalisation
What has made trade easier over time?
- FDI
- state led companies
- communication improvements
- free trade
- skilled labour
- better / cheaper transport
- TNC growth
- company mergers
Explain how McDonalds is a tertiary industry?
- worlds largest chain of hamburger restaurants
- serving 68 mn customers daily in 119 countries
- founded in 1940
- started as a typical drive thru
- in 1974 they opened the Ronald McDonald House
- aims are to provide customers with food of high standard, quick service and value for money
- within the UK there are 1200 restaurants and 600 are franchises
- 1 million employees world wide
why is brand recognition important?
it can make a company more global due to global shift
what do global institutions do to economies?
improve them and improve the quality of life in all member nations
what are the reasons for FDI?
access to foreign markets
exploiting new sources of energy and minerals
increasing food supply
taking advantage of cheap labour
