Globalisation

Question 1

What is globalisation?

Answer 1

Countries becoming more connected and interdependant

Question 2

How is marketing being adapted for globalisation?

Answer 2

Adaption for cultures e.g. Islamic nations and alcohol
The world is treated as a single market

Question 3

Flows of capital

Answer 3

Capital to foreign nations by FDI - $1.5 trillion in 2016
Money can instantly be sent around the world via the internet
Many nations economies are now dependent upon FDI
16% of Somalia’s GDP is from remittancies

Question 4

Flows of information

Answer 4

Financial data and news can be spread quickly by the internet
People in different nations can collaborate

Question 5

Flows of products

Answer 5

Companies can relocate abroad for cheaper labour e.g. Dyson in Malaysia
Nations are more dependant upon each other for products e.g. Golden Arches Theory
More imports from LICs

Question 6

Flows of Labour

Answer 6

Unskilled workers in LICs move to HICs in search of better pay e.g. Qatar 2022
People move overseas for work e.g. FIFO in Australia

Question 7

Flows of services

Answer 7

Growth in services such as banking due to improvements in technology
Deregulation has made it easier for firms to operate in other nations
Low level services are being relocated to places with cheaper labour e.g. call centres in Bangalore

Question 8

What are TNCs?

Answer 8

Companies that operate in two or more countries
In 2013, 80% of global trade was with TNCs

Question 9

How do TNCs promote links between nations?

Answer 9

FDI
Vertical, horozontal and merger integration
Acquisitions e.g. Ford acquired Volvo in 1999

Question 10

How do TNCs take advantage of the global supply chain?

Answer 10

TNCs invest in nations with limited labour and envirnonmental regulations e.g. Shell waste dumping in Nigeria
TNCs in primary industry invest in nations with natural resources
TNCs in tertiary industry invest in nations with a well educated population e.g. Aviva has invested in France and Canada
TNCs in secondary industry invest in nations with low labour costs and tax breaks e.g. Apple and Foxconn City

Question 11

How do TNCs impact global trade?

Answer 11

TNCs can cause a multiplier effect via job creation
Intrafirm trading when a TNC trades within itself giving the,m a big advantage over smaller businesses

Question 12

How do TNCs use global marketing?

Answer 12

Low advertising costs as a brand is gloablly recognised
TNCs become more aware of local markets and cultures e.g. McDonalds created the McArabia and McOz