Globalisation part 3 Flashcards
what is cultural divergence?
lacking the knowledge and understanding of cultural and social differences to be able to compete or sell products effectively
what % of companies in emerging markets get their products locally made?
40%
how many innovation centres does Unilever have?
68 in 20 countries
what is a global market niche?
What PED do they have?
smaller specialised parts of a global market where customers in more than one country have particular
needs
Inelastic PED
what do global market niches need to succeed?
good customer service, profit over market share and cost efficiency over cost of quality
what is a monopsony
where there is only one buyer
how much does Nestle spend for 1million Litres of water and how much profit do they get?
$3.71
$54million
what is transfer pricing?
the price used for related companies when they sell to each other, basically tax avoidance
where do Nestle sort out their taxes
Switzerland because its a low tax country (17.7%) so they make more money on profit
Who are the OECD
Organisation for economic cooperation and development
Name 3 ways to control MNCs
Global regulation, world political leaders and government pressure, self regulation like OECD guidelines e.g arms length rule
What is cost benefit analysis of controlling MNCs
All solutions must be cheaper to monitor than the benefit gained when MNCs are under control
