1.6 Flashcards

1
Q

A&F means (flows of people, money and goods)

A
  1. taxes paid to US
  2. cheap labour (from factories in India and China where child labour is legal)
  3. local markets (constructing and selling products within a trade bloc to reduce trade tarrifs -> allows products to be glocalised) eg A&F opening as a joint venture in UAE
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2
Q

how does A&F make profits (motive)

A
  1. horizontal integration
    - sold hunting wear and novelty items by mail order
    - was by “The Limited” and merged to sell niche clothes to the ‘youth market’
  2. vertical integration
    - A&F subcontracts “that’s it sportswear” (profits due to cheap labour)
  3. merged with Hollister and Gilly Hicks (economies of scale)
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3
Q

A&F mobility

A
  • faster cheaper transport (goods to shops in 10 days)
  • companies use cloud-computing
    subcontracts GT Nexus
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4
Q

role of TNC’s

A

bolt together different markets with different supply chains eg A&F is based in Ohio, USA, but has recently opened in the UAE​
They grow the imports / exports of countries

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5
Q

What is outsourcing?

A

business makes a contract with another company to complete some of the work ie making products or providing a service. the aim is to reduce costs as companies can do the work at a lower cost
eg A&F / A&F Kids, Hollister, Gilly Hicks, all make use of That’s It Sportswear (Bangladesh)

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6
Q

What is offshoring?

A

move operations to another country – e.g. China, Vietnam, India and Guatemala have cheap labour

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7
Q

What are Global Production Networks?

A

companies aren’t tied to locations anymore so size and density can grow
can be risky as natural hazards can disrupt supply chains or poor working conditions can ruin reputations

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