Globalisation Flashcards
Define globalisation
The increased integration and independence of national economies
Which factors have facilitated globalisation?
The internet and rise of e-commerce, communication technology, easy movement of capital and multinationals
Define multinational.
A business that has activities and operations in more than one country
How do multinationals benefit?
They can obtain more profit, different in each country, more revenue
Why may a company want to become a multinational?
Lower wage costs, take advantage of legal constraints, enter new markets, economies of scale
What are the benefits of a presence of a multinational?
Creates jobs, develops local skills, investment in local area, uses local materials
What are the disadvantages of the presence of a multinational?
Low wages, low skills, unsafe conditions, child labour (no education), not every company improves area, most income goes back to headquarters
What is a strategy?
A plan of action
What is a global strategy?
A plan of action on a global scale (a business plan of target growth)
What can a business do to succeed in a foreign environment? State 2
Adapt their current business model OR decide “one size fits all”
What is a brand?
A distinctive product offering created by the use of a logo, symbol, name, slogan or a mix. The key is to differentiate from competitors
What is a global brand?
A brand recognised throughout the world
What do brands need to do before entering a new market?
Research demographics and potential stakeholders
What may happen to local business when a multinational is present? State 2
Driven out as there are cheaper alternatives OR downward price pressure, offering products more cheaply
