paper 2 globalisation Flashcards
what is globalisation
how businesses in different countries have become connected
how has globalisation happened (3)
buying and selling to other countries
movement of workers to other countries
movement of capital between countries
give a good example of a company that has experienced globalisation
cocacola
What has the growth of globalistion been encouraged by
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
what do world trade organisations exist to encourage
reduce barriers to trade
what was the common market
allowed free trade it became the EU
how did EU develop
as well as free trade in allowed free movement of people in 2016 uk voted to leave
what is the impact of globalisation on a business in the uk (4)
growth of multinational companies
influence on business location
international branding
how businesses compete internationally
what are the advantages to a business of being a multinational company
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
what are the benefits to the host country of having a multinational company (3)
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
what are the disadvantages to countries where multinationals have located (2)
business closure - local businesses cant compete with prices and forced out of business
multinationals pay higher wages and so local businesses may loose workers
what are the benefits to uk businesses of locating to another country (7)
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
what are the disadvantages to uk business of relocating to another country (8)
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
what is branding
a products image and reputation
how do companies create a brand
logo
communicate values using words music and images
websites tv radio social media magazines
what does the saying think global act local mean
business should promote the same values around the world but in different ways in different countries
give an example of where international branding has to change but still communicates same message
cocacola advert with santa would not be understood in predominatly muslim countries instead they use brightly coloured adverts which relate to their buses
what else should business condider when advertising internationally
be aware of cultural and religious differences, it would not be appropriate to use images of semi dressed women in some countries
list other considerations business should follow when promoting a brand (50
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
what are the implications for marketing and international branding in terms of 4 Ps
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
which human resources factors need to be considered when competing abroad (2)
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
what changes may a business need to make to its operations to compete internationally (4)
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
how does a business need to change approach to finance to compete internationally
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
what is exchange rate
the price of one currancy in terms of another
what can the effects of exchange rates be
can make exports cheaper or dearer SPICED - Strong Pound Imports Cheaper Exports Dearer
what other things may effect how and where a business competes internationally (3)
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
what other things may effect how and where a business competes internationally
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
what other things may effect how and where a business competes internationally
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
