business and globalisation Flashcards
(14 cards)
globalisation definition
the economic integration of different countries through increasing freedoms in the cross border movement of people, goods/service, tech and finance
for dummies eg me
involves businesses buying and selling around the world often due to the cost or availability of products or cheap labour, world becomes more integrated
impact of globalisation on businesses on imports and exports
imports- access to cheaper or specialist raw materials /products. increased competitionn from foreign businesses
exports- businesses can sell products abroad, increasing sales therefore revenue
impact of globalisation on businesses locations
businesses may relocate operations abroad for cheaper labour or closer proximity to suppliers/customers
last impact of globalisation
MNCs- multinational companies operate in more than one country
benefit from economies of scale, wider markets, global brand awareness
what are economies of scale
cost advantages a business gains by increasing its scale of production (becomes more efficient)- leading to lower average costs per unit of output
barriers to international trade
tariffs- taxes on imports
trade blocs (??)- group of countries like EU that trade freely among themselves but may impose tariffs on outsiders (bit rude)
how do businesses compete internationally
through the use of internet and e-commerce:
-lets them reach global customers
-lower costs than physical stores, no need for physical storefront
by changing the marketing mix:
- match to local preferences and currency/income levels:
product: adjust to meet local laws/tastes
price: reflect currency, income levels
place:use local distributors/retailers or websites
promotion; adapt language, culture and media
examples of ethical business activity
paying fair wages (fair trade)
providing save working conditions
using suppliers that don’t exploit workers
avoid animal testings
possible trade offs ethics vs profit
being ethical may increase costs (sustainable materials, higher employee wages)
customers may be willing to pay more for ethical products, increasing brand loyalty
but short term, profit margins might be lower
examples of environmental actions
reduce co2 emissions
using renewable energy
recycling/ recyclable packaging
design eco friendly products
trade off environment vs profit
environmentally friendliness can raise production costs
might attract eco conscious customers or improve da brand image
long erm- sustainability can reduced waste ans save money
pressure groups?
organisations that try to influence business behaviour
pressure group impact on marketing mix
product-demand to stop animal testing or use recyclable packaging
price-costs may rise due to pressure to use ethical materials
promotion- bad publicity if company isn’t ethical/environmental
place-pressure to stop selling in areas with poor human rights
what are trade offs
doing the right thing may increase costs + lower short term profits, but can improve brand image
