globalisation

Question 1

defintion

Answer 1

globalisation is the increased incterconcectivness and intergation of countries in the globe

Question 2

charchteristics of globalisation

Answer 2

• free flow of labour and capital
  -free flow of goods and service
  -share of knowlegdge and technology and interlectual property
• ## interdependance between countries

Question 3

reasons for emerging markets

Answer 3

-moving away from primary sector industries
-cheaper labour
-improving productive capapcity ( LRAS 0
increased quality life
movment towards free market economy

drive growth in global economy finaicially attractive due to low costs of labour

although in long run wages of workers will rise growing economy, become customers of business

examples: brazile greece and china

Question 4

reasons for globalisation

Answer 4

-deregulation of markets
deregulation of markets means law and regulations are reduced making costs fir firms cheaper attracting producers into the market increasing competition

• trade liberisation
  the effect of the WTO promoting free trade and reducion of protectionist policies increasing trade between countries

-internet/ tech
customers are able to find goods/ services they want from foreign markets much easier and demand goods/ services from foreign markets
sped up access to info making businesses more productive
ablle to buy things from abroad online due to electronic payments

• improbed communiations
  able to have operations anyhwhere in the world e.g. MNC’s might have call centres abroad, able to communicate easiy
  able to communicate with customers ans other businesses via social media attract cusomers
• reduced transports costs
  containerisation, being able to ship goods quickly and efficiently, reducing costs for businesses and consumers
• consumer tatses, increased demand for foreign imports/ goods

Question 5

globalisation increasing competition

Answer 5

• deregualtion of markets attracting foreign firms to enter the UK market supplying at a lower price which encourages UK firms to increase competition and reduce costs although this may involve making reduncancies to reduce costs, reducing job security

Question 6

opportunities for growth

Answer 6

-increase of mergers/ MNC’s able to access new markets, larger target markets supplying to larger population, able to increase production and benefit from economies of scale reducing costs

• able to access cheapest supplers and reuduce costs and increase profits
• able to advertise and promote business to a wider range increasing customers sales and market share

-developing economies becoming more dveloped as their cheap labour is dribing their economy

• access to cheaper labour increasing productivity decreasing costs

-can create a global brand

Question 7

impact of globalisation on stakeholders

Answer 7

• Businesses: More competition but more growth opportunities- make a global brand, economies of scale
• lower costs, wider suppliers to choose from , access cheaper labour, increase production volume
• Employees: Greater employment abroad, but offshoring may reduce jobs in the UK.
• Consumers: More choice, potentially lower prices.
• Local communities: Can benefit from investment or suffer from factory closures

Question 8

global brands

Answer 8

same name, same image and positioning in every market, minimise differences in marketing mix creating a standerdised approach

may be some need to adapt for local laws, culture, language

social media may be used to grow and reinforce brand

other uses such as external growth

Question 9

global brands- external growth

Answer 9

This might involve a firm merging with or taking over a rival business to gain quick access to a foreign market.

may be risks of culture clash

other choices like franchises

Question 10

global brand- target market selection

Answer 10

• marketing and target market may be based on groups that can be reached easily and profitably with minimum need for product adaptions
• then position to differentiate in minds of consumers
• requires lots of market research to minimise risk of entering new market and understand differences of global consumers

Question 11

other factors consider

Answer 11

How extensive will product adaptation need to be? (expensive)
How strong is the local domestic competition?
Are there import restrictions?
Do exchange rates make your product uncompetitive?

Question 12

strengths and weaknesses

Answer 12

strengths-
- access a larger customer base
- economies of scale reducing costs
- allows for strong recognition globally
- fast access to markets via external growth

weaknesses-
may lead to culture clashes, not suiting local tastes e.g. Tescos in the US poor understanding of American shopping habits

• risk of poor integration and clash of business culture - takeover
• issues with ER fluctuations
• legal barriers e.g. product standards or advertisement laws

Question 13

glocalisation

Answer 13

globalisation involves the development and sale of products and services intended for the global market, but adapted to suit local tastes, customs and traditions

Question 14

strengths and weaknesses of glocalisation

Answer 14

strengths:
- global recognition of brand
- increased sales as products adapted better to suit needs of their target market
- opens up new markets outside EU

. Better Local Appeal
Adapting products or marketing to local cultures, tastes, and preferences makes them more attractive.

Example: McDonald’s offers McAloo Tikki in India and Teriyaki Burgers in Japan.

2. Increased Sales and Market Share
   Tailored products/services are more likely to meet local needs, boosting demand and customer loyalty.
3. Improved Brand Reputation
   Shows cultural sensitivity and awareness, which can build trust with local communities.
4. Competitive Advantage
   Helps businesses stand out against fully globalised or entirely local competitors.
5. Regulatory Compliance
   Adapting to local laws (e.g. packaging, advertising rules, food standards) reduces legal risks.

Weaknesses of Glocalisation

1. Higher Costs
   Customising products and marketing strategies increases production, research, and advertising costs.
2. Complexity in Operations
   Managing different strategies in multiple markets adds logistical and managerial challenges.
3. Brand Dilution Risk
   Too much localisation may weaken the global brand identity or create inconsistency.
4. Longer Time to Market
   More time is needed to research local markets and adapt products accordingly.
5. Difficulties in Economies of Scale
   Producing different versions of products for different markets reduces standardisation benefits.

• constant need for market research to reflect changing consumer tastes and fashions
• expense of adapting product ranges
• limits opportunties for economies of scale as identical products aren’t sold across the globe
• lower wages as firms need to minimise cost to remain internationally competitive
• british firms unable to compete against massive global monopolies
• gob losses outsourcing

Question 15

strengths and weaknesses of globalisation to stakeholders

Answer 15

1. Businesses (especially MNCs)
   Access to larger markets → more customers and revenue potential.
   Lower production costs through outsourcing and economies of scale.
   Access to global talent and innovation.
2. Consumers
   More choice of goods and services.
   Lower prices due to global competition and cheaper imports.
   Faster innovation as firms compete globally.
3. Employees (in developing countries)
   Job creation through inward investment by MNCs.
   Skills development and better training in modern industries.
4. Governments
   Increased tax revenue from expanding businesses.
   Foreign direct investment (FDI) boosts economic growth and infrastructure.
5. Shareholders
   Higher returns due to global expansion and profitability.
   Diversification of business risk across markets.

Weaknesses of Globalisation for Stakeholders

1. Domestic Workers (especially in developed countries)
   Job losses in industries outsourced to lower-wage economies.
   Wage pressure from international competition.
2. Local Businesses
   Harder to compete with large multinationals with greater economies of scale.
   Market domination by foreign firms can drive small/local firms out.
3. Consumers
   Cultural homogenisation – loss of local identity in products.
   Ethical concerns – products made in sweatshops or with poor environmental standards.
4. Governments
   Loss of control over the economy due to influence of large MNCs.
   Race to the bottom – pressure to reduce taxes/regulation to attract investment.
5. Environment
   Increased carbon emissions from global transport.
   Overexploitation of resources and environmental degradation.

Question 16

what are MNC

Answer 16

A multinational company operates in multiple countries but is headquartered in one.
Example:
Nestlé, Unilever, and BP are MNCs.

Question 17

reasons for MNC’s

Answer 17

Exploit cost advantages (e.g. cheap labour in Asia).

Access new markets (e.g. Coca-Cola in Africa).

Spread risk across economies.

Avoid trade barriers by producing locally (e.g. Toyota in UK to avoid EU tariffs

Question 18

impact of MNC’s

Answer 18

Positives:
* Investment, jobs, and infrastructure (e.g. Apple suppliers in China).
* Technology transfer and training.

Negatives:
* Exploitation (e.g. sweatshops).
* Environmental damage.
* Profit repatriation – profits leave host country

Question 19

risks and benefits to operate as a MNC

Answer 19

Pros:
* Revenue diversification.
* Economies of scale.
* Increased brand reach.

Cons:
* Political risk (e.g. sanctions, coups).
* Ethical concerns (e.g. low wages, poor working conditions).
* Higher management complexity.