7.1.1 Flashcards
What are the causes of globalization
Movement or flow of people, information, money, goods and services between countries
Explain flow of Labour
Highly skilled workers migrate from one country to another, bringing aspects of their culture with them
Explain flows of information
Information such as news spreads very quickly and easily via email, the internet and social media
Explain flows of capital
Money is invested by companies overseas – this is known as Foreign Direct Investment (FDI)
Explain flows of products
Manufactured goods are often produced in LDE countries due to outsourcing, and then exported for sale in HDE countries
Explain flows of services
Customer services are often provided in LDE countries to serve the needs of customers in HDE countries
Outline the measurement of globalization according to KOF index
Measures the social (access to internet, number of international newspapers sold), economic (restrictions on trade and capital) and political (membership of international organizations) aspects of globalisation
Uses a wide range of data such as participation in UN Peace-keeping missions to TV ownership
Countries are scored out of 100 and the higher the number, the more globalised the country is
How is global marketing linked to globalization?
When customers around the world recognise a particular brand or logo, this contributes to the acceleration of globalisation
Outline an example of global marketing and why it is beneficial for a firm?
An example of this is Coca Cola which sells soft drinks in over 200 countries with a brand identity that is recognised globally
Having one global strategy reduces costs and develops global awareness. This enables companies to boost sales and achieve economies of scale due to global awareness of, and trust in the brand
Explain the global shift
In the past, most manufacturing was concentrated in industrialised countries such as USA, UK and Germany
More recently, TNCs have moved production to Emerging Market Economy (EME) countries such as China to take advantage of cheaper costs of land and labour
Outline present trends int he production and consumption patterns
The largest markets for manufactured goods remain in Highly Developed Economy (HDE) countries, so most products are exported for sale to Europe and North America.
As EME countries continue to develop, it is likely that patterns of production and consumption will shift again.
Explain difference between LDE, EME, HDE
LDE countries are those with the lowest economic development and a low GDP per capita e.g. Sudan or Haiti.
EME countries are those with accelerating growth and development but they still tend to have lower GDP per capita e.g. China or India.
HDE countries are those with the highest economic development and a high GDP per capita e.g. UK or USA.
