What is Globalisation
Globalisation is the process by which the world becomes interconnected as a result of trade, improvements in transport and communications.
What are the reasons for Globalisation
•Improvements in Technology: Internet and mobile technology has improved communication between business and consumers internationally (around the world).
•Consumer Demands: as income levels increase and consumer awareness expands, consumer may want products from overseas.
•Freedom of Trade: The W orld Trade Organisation (W TO) encourages free trade between countries which leads to globalisation.
•Transport Improvements: Goods and people can travel quickly and easily between countries
What are the positive impact of Globalisation
- Wider Consumer Choice: Consumers can buy products previously not available to them. This involves sharing experiences & culture. This means competition for Irish businesses.
- New Businesses: Large companies may set up a business in Ireland to meet the needs of Irish consumers. They may buy raw materials from local suppliers in Ireland which helps small Irish businesses.
- Employment: Large companies that set up a business in Ireland will need an educated and skilled workforce which means they will hire local people.
- Lower Prices: TNCs benefit from lower production costs due to economies of scale (the price per unit reduces the more items you make) and as a result they can charge less for their items than smaller businesses.
What are the negative impacts of Globalisation
- Benefits the rich more than the poor:Globalisation operates mostly in the interest of the richest countries which dominate world trade at the expensive of poorer ones.
- Local communities:There is no guarantee that the wealth from inward investment will benefit local people where the company operates. Often profits are sent back to the home country of the multi-national organisation e.g Apple’s profits return to America
- Negative environmental impacts:Demand for productive land,water and other raw materials has reached unsustainable levels and is having a negative impact on the natural environment globally.
- Crowding out:Due to economies of scale,TNCs may drive smaller local businesses out of business e.g Starbucks crowding out a smaller locally owned cafe
What are the advantages of ICT
- Accessibility:Internet and mobile technology has improved communication between business and consumers internationally. This allows consumers to shop online 24/7.
- WiderChoice:Having access to a company’s website means that a consumer can buy goods from anywhere in the world.
- OnlineBooking:Consumers now can book holidays & events online.This means there is no longer such a need for businesses to have a physical presence.
- Consumer Feedback:Consumers can give feedback to businesses through online forums, email and social media. This feedback can be instant and assists other consumers making choice e.g. positive product reviews
What are the disadvantages of ICT
- No human interaction:Some people prefer to deal with people in person when buying products and services.
- Returning goods:It can be inconvenient(difficult)and expensive to-return products that have been purchased online.
- Fraud:A website may take your money but have no intention of delivering the products.
