Globalisation Flashcards
Explain globalisation
The increasing development of the links which bind nations, these links may be economical (trade, investment, production and finance) political (UN, WTO) or cultural
What is changing in the world/ or has changed over last few decades to make it more connected
Every item can be uniquely identified - barcodes
Every item is uniquely located
Standardisation of shipping -
Globally recognised standards on these issues
Explain a multinational corporation
Businesses that either own or control foreign subsidiaries in more than one country
What are the two extreme views towards globalisation in terms of its economic effect
Increases inequality
Lowers prices and more efficiency
What are the two extreme views towards globalisation in terms of its political effect
World is being dominated by big businesses
Stabilise international relationships
What are the two extreme views towards globalisation in terms of its cultural effect
Cultures being displaced by dominant cultures
World experience is opened
What are four drivers of globalisation
Market drivers
Cost drivers
Government drivers
Competitive drivers
What are market drivers and what do they focus on
Market drivers focus on the extent to which markets throughout the world are becoming more similar. The more similar consumers are in respect to income and taste, the more significant globalisation market drivers will become
What are cost drivers and what do they focus on
Cost drivers present businesses with the potential to reorganise operations globally and reduce costs as a consequence. Global economies of scale, and transport and distribution issues will be significant
What are political drivers and what do they focus on
Global political agreements (WTO terms) Not only affect operations of markets but also help to establish global rules and protocols.
What are competitive drivers and what do they focus on
As competitiveness builds (domestically or overseas) businesses are forced to consider how to maintain their competitive position
Give examples of competitive drivers
Increases in the level of world trade
Increased ownership of corporations by foreign acquirers
Rise of new competitors intent upon becoming global competitors
Growth of global networks in particular industries
More companies becoming globally centred rather than national centred
Give examples of cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
The emergence of newly industrialised countries with the productive capability and low labour costs
The increasing cost of product development
Give examples of market drivers
Per capita income convergence among industrialised nations
The convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Establishment of world brands
Push to develop global advertising
Give examples of political drivers
Reduction of tariff barriers Reduction of non-tariff barriers Creation of blocs The decline in the role of governments as producers and customers Privatisation Shift to open market economies
