6.3 Globalisation Flashcards

All 26 cards in this deck

Give one reason a business might relocate production overseas.

Any one of: lower production costs, e.g. cheaper labour; to be closer to customers or raw materials, cutting transport costs.

Give one risk to a UK business of moving production to a country with low labour costs.

Bad publicity if it is seen to exploit workers or let them work in unsafe conditions, which can damage its brand.

Give three ways a UK business can compete internationally.

Better designs; higher quality products; lower prices.

Give one drawback to a business of selling to overseas markets.

Any one of: it may not understand foreign customers, laws or culture, leading to costly mistakes; adapting and transporting products adds costs.

What is globalisation?

The increasing integration of economies worldwide, so businesses trade, buy and sell across national borders.

What are imports?

Goods and services bought in by a country from overseas businesses.

What are exports?

Goods and services produced in one country and sold to customers in another country.

Define the term multinational.

A business that produces goods or services in more than one country. Only selling (exporting) abroad is not enough.

How can a multinational opening in a country affect local businesses?

Local businesses face a large, powerful competitor and may lose sales, although some may gain by supplying the multinational.

How can increased imports affect a UK business?

It faces more competition from overseas businesses, which may force it to lower prices or cut costs to stay competitive.

Give one benefit to a business of being able to export.

It can sell to more markets, building global brand awareness and generating higher revenue.

Give one benefit to a business of using e-commerce to compete internationally.

It gives a far wider range of customers access to its products worldwide, without a huge amount of investment.

Give one way a business might adapt its product to compete in an overseas market.

Any one of: different styles or sizing; colours to suit cultural beliefs; dietary requirements such as halal or kosher; left- or right-hand drive vehicles.

Give one reason a business must adapt its promotion for an overseas market.

Cultural and social differences and language mean adverts must be translated and messages changed to suit local customers.

Give one reason a business must adapt 'place' when selling in another country.

Any one of: internet access varies; local purchasing preferences differ; existing distribution links differ.

Give two factors that make a business change its price in different countries.

Any two of: income levels (disposable income); tax; the level of demand.

Give two factors that have led to increased globalisation.

Any two of: improved technology, telecommunications and the internet (e-commerce); improved global infrastructure; cheaper transport, e.g. containerisation.

Give one advantage to a business of operating as a multinational company.

Any one of: access to a larger market, so higher sales; risk is spread across several countries; access to skilled workers abroad; lower tax in some countries.

Give one disadvantage to a business of operating as a multinational company.

Any one of: communication problems from language, culture or time differences; it may become too large to manage; opposition from groups who dislike multinationals.

What is meant by international branding?

Creating an image or logo for a product that is recognised and communicated in countries all around the world.

Give one benefit to a business of a strong international brand.

The brand is recognised worldwide, building customer trust and loyalty and giving a competitive advantage.

Globalisation involves the movement of which three things between countries?

Goods and services (trade), workers, and capital (money for investment).

Why may quality control be harder when production is moved abroad?

Production is far from head office, so managers cannot easily check it, and local workers may lack the skills or technology used at home.

What does 'think global, act local' mean for international branding?

A business keeps the same brand values everywhere but puts them across in ways that suit each country's language and culture.

How can a business in a high-wage country keep its costs competitive with rivals in low-wage countries?

By using technology to raise productivity, so each worker produces more and the cost of making each product falls.

Give one advantage of taking over or partnering with a business already operating in a foreign market.

It already knows the local customers and the rules and regulations for doing business there.