1. Globalisation

Question 1

What is Globalisation in Business?

Answer 1

GLOBALISATION :

• when a business BUYS and SELLS around the world
• it can choose to put its factories where LABOUR is CHEAP - this will keep COSTS down and therefore increase profits
• it can buy CHEAP parts
• Globalisation means that the business can SELL to many different countries - increases its MARKET SHARE and profits
• Globalisation means that the business can BUY from many different countries - get cheap prices & negotiating deals which means increasing its profits
• Could FRANCHISE to expand brand overseas
• Easy because of increases in technology

Question 2

Why is a GREAT PRODUCT DESIGN important for a GLOBAL COMPANY?

Answer 2

W great product design will make a product:

• STAND out from the COMPETITION in a GLOBAL MARKET
• INCREASE SALES - INCREASE PROFITS

Question 3

How can a GLOBAL COMPANY compete with its COMPETITORS?

Answer 3

A GLOBAL company can COMPETE with its COMPETITORS:

• On QUALITY - eg high quality raw ingredients such as good quality cloth of food items
• On PRICE - eg they could offer customers the cheapest price
• On PRODUCT range - eg they could offer the GREATEST VARIATION of flavours - customers will be attracted to a large company with the best choice

Question 4

Work force and globalisation

Answer 4

Work force and globalisation

• A global company can choose where its products are made - need to be NEAR RAW MATERIALS & CHEAP WORKFORCE
• eg if Spanish minimum wage is 756.70 per month and UK is 1378.90 the company will choose to have their product paid where LABOUR COSTS ARE CHEAPEST - to keep its costs LOW and make MORE PROFIT
• if the factory is in SPAIN near the SPANISH FARMS - it should locate the factory in Spain; FRESH local ingredients, reduced transport costs - save on costs, increase profits

Question 5

What are IMPORTS?

Answer 5

IMPORTS are goods bought in from another country - eg cheese from Italy, cars from Italy

Question 6

What are EXPORTS?

Answer 6

EXPORTS are goods sold to another country eg we well honey made from our bees to other countries