TNCs Flashcards

1
Q

Why might TNCs produce products abroad?

A
  • cheaper production costs
  • access to raw materials
  • reduce barriers to trade
  • tax evasion
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is vertical integration?

A

when a company buys up other parts of the supply chain for the same product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is horizontal integration?

A

a company buying other/rival companies in the same industry/offering the same product/service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Give an example of lower costs as a reason for outsourcing production

A

Hewlett-Packard in Malaysia

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Why does Shell (source country: Netherlands) operate in Nigeria?

A

to exploit raw materials (oil)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Why did Nissan produce cars in Sunderland?

A

to have access to EU market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are 3 positives of outsourcing for the host country?

A
  • job creation
  • taxes
  • supplier companies may grow
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are 3 negatives of outsourcing for the host country?

A
  • health and safety being ignored
  • low wages
  • profits go to HQ country
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the multiplier effect?

A

a knock-on effect

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is agglomeration?

A

increasing business size by taking over other business, often in a nearby location

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are TNCs?

A

companies with operations in at least 2 countries, with headquarters based in 1 country but business operations in a number of others.
can come from NEEs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What does global economies of scale refer to?

A

bigger companies can achieve lower costs (eg buying in bulk)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is glocalisation?

A

the changing of a product/service to better suit the location (eg/ McCurry in India)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly