paper 2 globalisation

Question 1

what is globalisation

Answer 1

how businesses in different countries have become connected

Question 2

how has globalisation happened (3)

Answer 2

buying and selling to other countries
movement of workers to other countries
movement of capital between countries

Question 3

give a good example of a company that has experienced globalisation

Answer 3

cocacola

Question 4

What has the growth of globalistion been encouraged by

Answer 4

transport - transport costs have reduced as ships and planes have become larger and rail and road have improved

telecommunications and internet - communication is faster and cheaper

free trade arrangements - exist when there are no barriers to trade eg tariffs, quotas and regulations

Question 5

what do world trade organisations exist to encourage

Answer 5

reduce barriers to trade

Question 6

what was the common market

Answer 6

allowed free trade it became the EU

Question 7

how did EU develop

Answer 7

as well as free trade in allowed free movement of people in 2016 uk voted to leave

Question 8

what is the impact of globalisation on a business in the uk (4)

Answer 8

growth of multinational companies
influence on business location
international branding
how businesses compete internationally

Question 9

what are the advantages to a business of being a multinational company

Answer 9

increase sales- increase size of market

spreading risk- if one market loses sales - maybe becasue of a recession, it can make up sales in another market

lower costs - maybe cheaper to make products in another country

tax avoidance - may avoid paying large taxes by setting up headquarters in a lower paying tax country

Question 10

what are the benefits to the host country of having a multinational company (3)

Answer 10

create demand in host country business - employ locals and increase their incomes which may increase their spending for local business

taxes and public services- multinational may pay taxes to help government improve public services

lower prices and costs - by keeping costs low they can offer lower prices to local businesses

Question 11

what are the disadvantages to countries where multinationals have located (2)

Answer 11

business closure - local businesses cant compete with prices and forced out of business
multinationals pay higher wages and so local businesses may loose workers

Question 12

what are the benefits to uk businesses of locating to another country (7)

Answer 12

lower costs- labour
lower costs - technology ( better abroad who have invested unlike uk)
lower costs - property and land
expertise -
skilled workers
demand - locate to where market is

Question 13

what are the disadvantages to uk business of relocating to another country (8)

Answer 13

quality control - difficult to monitor and sometimes better quality in uk

communications - difficult with language barrier and hard to communicate across different time zones

transport - may be a delay in getting raw materials to destinations

loss of sales - if production is moved abroad people

loose jobs in uk - loss of spending

access to skilled workers - may not be elsewhere

costs - if wages abroad rise it may be cheaper to produce in uk . Ultimatly unit cost of production may be cheaper in uk

environment - produce in uk reduces carbon footprint - marketing tool

Question 14

what is branding

Answer 14

a products image and reputation

Question 15

how do companies create a brand

Answer 15

logo
communicate values using words music and images
websites tv radio social media magazines

Question 16

what does the saying think global act local mean

Answer 16

business should promote the same values around the world but in different ways in different countries

Question 17

give an example of where international branding has to change but still communicates same message

Answer 17

cocacola advert with santa would not be understood in predominatly muslim countries instead they use brightly coloured adverts which relate to their buses

Question 18

what else should business condider when advertising internationally

Answer 18

be aware of cultural and religious differences, it would not be appropriate to use images of semi dressed women in some countries

Question 19

list other considerations business should follow when promoting a brand (50

Answer 19

language -
names - legal reasons can not use or name has a different meaning

level and distribution of income - no point promoting high end product in LIC

legal factors - obey the laws of the land concerning advertising

bribery - acceptable and expected in some countries but frowned upon in others

Question 20

what are the implications for marketing and international branding in terms of 4 Ps

Answer 20

product - may need to be changed to meet needs of local market eg jLR produced longer wheel versions for Chinease market

Promotion - celebrities like D Beckham are global figures and can be used to promote in many countries, others only used in certain countries

Prices - need to know competitor prices, need to be lower in LICs

place - may need to be near supply of raw materials or market, where production is at its lowest , where raw materials are

Question 21

which human resources factors need to be considered when competing abroad (2)

Answer 21

recruitment training and motivation - may recruit locally in bring in from abroad - is training worth the cost

communications - need to communicate with consumers, suppliers and workers
bus

Question 22

what changes may a business need to make to its operations to compete internationally (4)

Answer 22

production process and technology - changing method of production, businesses in developed countries rely on technology to keep wages down

quality of goods - buyers in different markets have different expectations of goods - need to ensure quality is maintained if goods produced abroad

sales processes and customer services - may differ between countries in developed countries many are comfortable buying online, in other countries they prefer face to face

business location - may be important to produce locally, especially if selling fresh things which need to be sold quickly

Question 23

how does a business need to change approach to finance to compete internationally

Answer 23

sources of finance - may need short term finance to deal with cash flow issues in order to compete abroad . long term investment may be need to pay for new premises and machinery

costs - wages differ between countries. must consider can they sell competitively while covering costs

break even analysis - need to conduct a break even forecast to help decision how much it will need to sell to make a profit

Question 24

what is exchange rate

Answer 24

the price of one currancy in terms of another

Question 25

what can the effects of exchange rates be

Answer 25

can make exports cheaper or dearer SPICED - Strong Pound Imports Cheaper Exports Dearer

Question 26

what other things may effect how and where a business competes internationally (3)

Answer 26

ethical and environmnetal considerations - will bring bad publicity if they use practices that are not accepted
economic climate - what is happening to the income of the climate and will influence if business is willing to compete there

Question 26

what other things may effect how and where a business competes internationally

Answer 26

ethical and environmnetal considerations - will bring bad publicity if they use practices that are not accepted
economic climate - what is happening to the income of the climate and will influence if business is willing to compete there

Question 27

what other things may effect how and where a business competes internationally

Answer 27

ethical and environmnetal considerations - will bring bad publicity if they use practices that are not accepted
economic climate - what is happening to the income of the climate and will influence if business is willing to compete there