business and the international economy

• what is globalisation

  globalisation refers to the growing integration of the worlds economies
• factors that have contributed to the globe becoming connected

  transportation

  social media

  technology advancements

  removal of trade barriers

  increase in tourism

  multinational companies selling abroad
• opportunities of globalisation-reduced taxation

  businesses can locate in countries with low corporation tax rates
• opportunities of globalisation-lower costs

  businesses can open up in countries that have much cheaper production, premises and wages eg china, india
• opportunities of globalisation-access to larger markets

  larger potential target market could increase the potential profit of shareholders
• opportunities of globalisation-access to labour

  businesses can recruit highly skilled staff from anywhere in the world
• threats of globalisation-international takeovers

  larger businesses can take over smaller ones against their will
• threats of globalisation-competition

  if they choose to operate in another country, they may enter a crowded market place. therefore, it reduces the potential profit of shareholders
• what is a multinational company

  a multinational company is a company that does business in a select few countries around the world and operates facilities such as warehouses or distribution centres in at least one foreign country
• examples of a multinational companies

  apple

  amazon

  microsoft

  starbucks
• advantages of a multinational company

  better employment opportunities

  development of new technologies

  improvement in infrastructure

  availability of variety of goods
• disadvantages of a multinational company

  threat to small and local businesses

  lack of labor laws, employees could be exploited

  risk of conflicts between MNCs and the country it's operating in due to potential political climate