3.10 - global considerations

Question 1

what is globalisation

Answer 1

Globalisation is the ability of businesses to access new international markets by growing larger or using technology to provide its goods and services to new markets with businesses therefore facing increasing competition

Question 2

what are global considerations

Answer 2

global sourcing of inputs, overseas manufacture and global outsourcing

Question 3

what is global sourcing of inputs

Answer 3

Involves sourcing goods or raw materials from suppliers from an overseas location. Eg Sourcing fabric from Europe

Question 4

what is overseas manufacturing

Answer 4

When the transformation/processing stage of the operations system is conducted overseas. Eg Making t-shirts in Bangladesh.

Question 5

what is global outsourcing

Answer 5

when a business contracts another overseas business to perform some of its roles or functions. Eg Customer support, Telephone marketing, payroll or IT services in China

Question 6

advantages of global sourcing of inputs

Answer 6

Materials can be purchased at much lower prices as labour costs can be much lower overseas compared to Australian labour costs.
A broader variety of materials can be sourced with much more competitive pressure when dealing with overseas suppliers, leading to greater variety of supplier choice and the chance to negotiate a lower price

Question 6

advantages of global outsourcing

Answer 6

It can be much cheaper to have some activities completed by a business located overseas as labour costs can be much lower overseas compared to Australian labour costs.
Provides employment to overseas workers who might otherwise not get a job to support their families

Question 7

advantages of overseas manufacturing

Answer 7

It can be much cheaper to manufacture products overseas as labour costs can be much lower overseas compared to Australian labour costs.
Provides employment to overseas workers who might otherwise not get a job to support their families

Question 8

disadvantages of global sourcing of inputs

Answer 8

There can be delays in the availability and arrival of materials as they must be transported considerable distances and the supplier cannot easily fix supply problems of meet an urgent order.
Transportation adds increased costs to the materials being supplied from overseas and the transport by air or sea will burn fuel and cause damage to the environment

Question 9

disadvantages of overseas manufacturing

Answer 9

There can be delays in the availability and arrival of products as they must be transported considerable distances and the supplier cannot easily fix supply problems of meet an urgent order.
Transportation adds increased costs to the materials being supplied from overseas and the transport by air or sea will burn fuel and cause damage to the environment

Question 10

disadvantages of global outsourcing

Answer 10

There can be delays in the availability and delivery of services due to time zone differences
Overseas communication relies on technology, the internet and computers all of which can be unreliable causing customer complaints and damage to business reputation

Question 11

differences in global considerations

Answer 11

• definition whereas definition
• profitability (GSI some profit, OM considerable profit, GO some increase in profit)

Question 12

similarities in global considerations

Answer 12

• transport delays
• overseas
• cheaper