globilisation Flashcards
what does globilisation involve
buying and selling good in different countries.
the movement of people country to country
movement of finance / capital
how has it increased
bigger planes
transport
boxes can be tranported easliy
telecommunication has improved too
free trade movement
eu- 27 states, free movement of people, and free trade
WTO- encourages countries to trade
nafta- north americas version of eu
impacts of globalisation
growth of TNCs
advantage- sales
selling in different countries increases the size of the market
raise sales and revenue
advantage- spreading risks
if a market is lost in a recession then there would be another market that is safe
advantage-lower costs
they could assemble goods in low income countries this is cheaper
advantage- tax avoidance
they could set up headquarters in countries that have low taxes e.g. luxembourg
advantage-creating demand for host country business
may employ people
taxes etc.
tncs may buy supplies, infrastructure etc.
opportunities e.g cleaning business trash etc
advantage- taxes and services
may pay taxes, this will support the government for investmenrs . prosperity
advantage- lower cost
TNC can offer goods and services at lower rates
businesses closer - disadvantages
local businesses may not be able to comoete with larger TNCS less variation in market
tncs may pay higher wages than local business, less worker etc.
outflows
TNCS may move profit to other country.
limited benefits
benefits of uk businesses locating abroad
lower labour cost- e,g china
lower costs technology- other countries may have better technology than the uk as in the uk there is not much technology.
lower costs - lands, rent etc.
expertise- more engineers in japan etc.
demand- there is a high demand for vegan shizz in scandies. e,g electro cars in denmark
disadvantages of uk businesses locating abroad
quality control- it is hard to control quality from a place far from head office. low skilled workers etc. china
communication- more difficult, language barrier etc.
transport- the raw materials and final product must be transported
loss of sales- worker in the uk become unemployed, this means less sales and more poverty.
access to skill labour-
costs- wages could increase and it could be more effective to keep business n the uk. e.g south Korea
environment- go figure, transport boats etc.
location and evaluation
businesses need to compare the benefit of having businesses abroad or keeping it in the UK.
Needs to weigh up the benefits.
international branding
this includes logo, in-mage and language]
burger king poopoo smoothie from china
income
would you sell verace in syria and abbidas in switzerland
bribery
some countries accept the briberies.
in the uk they do not
legal factors
you cannot advertise 18 year olds drinking alcohol in america as you must be 21+ to drink
location evaluation
some firms are moving back to the uk after benefiting from low cost in others for many reasons.
increase in wages in china
tarriffs increase in Nigeria
4 p
when marketing
place , promotion, pricing must be considered
india’s chicken burger’s in macdonald’s
marketing
product may change to suit the country
coco cola coffee in france
promotion correct celebrity endorsement, e.g kim k in ameria , keith lemon in the uk
prices- prices may be high in sweden but low in tanzania
human resources
do you recruit locally or intrenationally
communication]- ict
minimum wages
laws
operation
may change from batch to flow to compete against businesses who hire abroad. face to face selling quality of goods location may change made in uk - reliable
finance
may need to do overdraft to buy for short term reasons e.g promotions in other countries
long term- investments in premises
wages change from country to country
break even analysis- should forecast how much they need to spend
productivity
unit/ output per worker
