Globalisation Flashcards

Flashcards to review key concepts of globalisation, its opportunities, and threats for businesses.

Globalisation

The growing integration of the world's economies.

Global Markets

Selling products anywhere in the world; firms behaving as if there is one market

Key Features of Globalisation

Goods and services freely traded, people can live & work in any country, high level of interdependence between nations.

Developments in technology (Globalization)

High speed internet, swift transfer of data

International transport networks (Globalization)

Cost of flying has fallen, number of flights & destinations increased

Deregulation (Globalization)

Privatisation – increased competition; removal of trade barriers

Increase in tourism (Globalization)

Consumer tastes have changed due to experiences abroad.

Domestic markets (Globalization)

Firms want to sell abroad due to saturation.

Multinational companies (Globalization)

Benefit from international markets & producing goods anywhere in the world where costs can be minimised

Governments aid globalisation by

Relaxing laws & regulations that prevent, restrict or complicate trade and business.

Starter Activity

A business sells exercise equipment to companies in a variety of different countries.

Benefits of Globalisation

More free trade, higher employment, increased incomes & living standards.

Access to larger markets

Global markets are bigger than domestic ones – provides more opportunities to increased sales.

Lower Costs via Globalization

Exploit economies of scale.

Access to labour (Globalization)

Free movement of labour – businesses have a larger labour pool

Reduced taxation (Globalization)

Choose where to locate their base, therefore reduce the amount of tax paid.

Competition (Threat of Globalization)

Increased competition due to globalisation, some companies will have survival threatened.

International takeovers (Threat of Globalization)

Free movement of capital leaves businesses open to takeovers from other countries.

Increased risk of external shock

Due to interdependence that results from globalisation. Events in one economy are likely to affect other economies.

Large Firms that dominate the global car industry

Toyota, General Motors (GM), Ford, Volkswagen, Hyundai and Nissan

Global Outlook of Companies

They will sell their products anywhere and operate production plants and other facilities wherever costs can be minimised.

Demand for cars (Globalization)

Growing fast in emerging economies.

Japanese car manufacturers

Dominate the world car industry due to new and more efficient producers.

Exchange Rates

US Dollar 1.97 Euro 1.52 Turkish Lira 2.76 Australian Dollar 2.54 Japanese Yen 239 Canadian Dollar 2.33

Globalization & Planning Permission

Firms cannot develop businesses overseas if planning permission is denied.

Globalization Benefits Specialist Recruitment

Businesses can recruit specialist, highly skilled staff from all over the world

Benefits of Globalisation

Globalisation has a range of benefits – more free trade, higher employment, increased incomes & living standards

Benefits of Economies of Scale

Lower costs – exploit economies of scale. Lower costs the business is more competitive, may help with larger market share, increased sales and raise profit margins

Benefits of Globalisation (Threats)

Globalisation has a range of benefits – more free trade, higher employment, increased incomes & living standards

globalisation

The integration of the world’s economies.

Currency Conversion Rule

To change pounds into another currency, multiply by the rate.

Globalisation Definition

The growing integration of the world's economies.

Why Businesses Go Global

Businesses want to become global to access larger markets and potentially lower costs.

Reasons for Globalization

Developments in technology, international transport networks, deregulation, increase in tourism, saturated domestic markets.

Government's Role in Globalization

Governments aid globalization by relaxing laws & regulations that prevent trade and business.

Opportunity: Larger Markets

Global markets are bigger than domestic ones, providing more opportunities for increased sales.

Opportunity: Lower Costs

Businesses may be able to lower costs and exploit economies of scale.

Opportunity: Access to Labor

Businesses have a larger labor pool and can recruit specialist staff globally.

Opportunity: Reduced Taxation

Businesses can choose where to locate their base and reduce the amount of tax paid.

Threat: Increased Competition

Some companies face increased competition that threatens their survival.

Threat: International Takeovers

Businesses are open to takeovers from other countries.

Threat: Increased Risk of External Shock

Events in one economy are likely to affect other economies.

Example of Globalized Business

Ford has factories in Australia, Brazil, France, Portugal, Spain, Thailand, the USA, the UK and many other countries

Closed International Borders

No trade if international borders are kept closed

Globalization Marketing Investment

Companies that exploit globalisation are well-resourced and influential – use their resources to invest in marketing

Corporation Tax in Ireland

Corporation tax is only 12.5% - higher than 20% in other places

Globalization Marketing Boost

Companies that exploit globalisation are well-resourced and influential – use their resources to invest in marketing.

Brexit's Effect

Events in one economy are likely to affect other economies e.g. UK leaving the EU, when decision made stock markets fell sharply

Globalization Marketing Investment

Companies that exploit globalisation are well-resourced and influential

Opportunity for businesses from globalisation

Lower costs resulting from economies of scale

Threat to businesses from globalisation

Increased competition

consumer benefits of globalization

Consumers can gather information and buy online from anywhere

globalization marketing advantage

Companies that exploit globalisation are well-resourced and influential – use their resources to invest in marketing

Business example of Globalisation

Firms could have head office in London, borrow money from a Japanese bank, manufacture goods in China, deal with customers in a call centre in India & sell products all over the world.

Globalization Benefits Specialist Recruitment

Businesses recruit specialist, highly skilled staff from all over the world

Easier To Trade

Simplified monetary and legal systems

Globalisation

The growing integration of the world's economies.

Globalisation

The growing integration of the world's economies.

Car producers produced over 9 million cars each

Toyota, Volkswagen and GM

Business Sales

Lower costs Business grow by selling more to larger markets

Business Wages

Rising labour supply may keep wages low

Predator Businesses

International takeovers Free movement of capital leaves businesses open to takeovers from other countries.

Globalisation Overseas

Firms cannot develop businesses overseas if planning permission is denied

Globalization Industries

Domestic industries no longer protected

Globalization Transport

International transport networks – cost of flying has fallen, number of flights & destinations increased