THE ECONOMIC ENVIRONMENT - GLOBALIZATION

Question 1

What is globalisation

Answer 1

Globalisation is the process by which the world’s economies have become increasingly integrated and interdependent (you rely on somebody else).

Question 2

How is globolisation proven

Answer 2

More international trade

The proliferation of global brands

The reduction of protectionist measures

Question 3

What are causes of globolisation

Answer 3

Falling transport costs - costs of getting good from one place to another

Falling communication cost - Communicating, with customers and suppliers abroad

Technological developments (internet, mobile phones etc)

Electrical payment systems

Reduction in protectionist measles

Rising world incomes and living standards

Emergence of MNCs and global supply chains

Question 4

Importance of globolisation

Answer 4

Finance:

Increased revenues from ability to sell overseas

Falling costs of imported raw materials/ increases in competiution in the supply chain

Marketing:

Emergence of global brands

Cost of advertising/ promotional campaigns dramaptaccly reduced (i.e. social media)

Question 5

What are the operations of globolisation

Answer 5

Falling transport costs

Global supply chains

Question 6

What happens with peeople when it comes to globolisation

Answer 6

Reduced communication costs

Increased labour mobility

Question 7

What are the opportunities of globolisation

Answer 7

Specialisation and comparative advantages (leading to USP)

Increased competition and choice: Lower prices, more innovation, improved service/ quality

Economies of scale = cost competitive

More efficient suppliers

Opportunities for international expansions and FDQ (avoidance of regulations)