The Impact of Globalisation Flashcards

All 9 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.

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.

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.

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.