Globalisation

• globalisation:

  the trend for large businesses to operate on a worldwide scale; money, goods and services can be transferred across national borders
• 3 main elements of globalisation:

  -imports

  -exports

  -business location
• international trade:

  the process of buying from and selling to overseas countries
• imports:

  goods/services bought from a supplier in another country
• reasons to import:

  -climate

  -availability of raw materials

  -business capacity
• exports:

  goods/services sold to a customer in another country
• SPICED

  Strong

  Pound

  Imports

  Cheaper

  Exports

  Dearer
• changing business location advantages:

  -access to more customers

  -potential for more sales and profit

  -potential to grow product range

  -increased brand awareness
• changing business location disadvantages:

  -increased responsibility

  -more risk

  -potential for failure
• multinational/transnational companies:

  companies that operate in a number of countries around the world
• adaption of products to suit consumers in different countries:


  glocalisation
• tariff:

  a tax on imported goods and services
• why do countries put tariffs in place?

  -make them more expensive

  -restrict demand

  -promotes and protects businesses in the home country
• tariff advantages:

  -more money for the government

  -businesses in the home country have a better chance of competing
• tariff disadvantages:

  -imported goods/services become more expensive

  -may cause other countries to impose tariffs, which will affect exporters
• trading bloc:

  a group of countries that work together to provide special deals for trading
• trading bloc: example


  the EU
• trading bloc advantages:

  -promotes free trade (without tariffs)

  -free movement of labour

  -creates good trading relationships
• trading bloc disadvantages:

  -importing and exporting to countries outside the trading bloc can be expensive

  -countries can often only be part of one trading bloc, which means they cannot enter others
• advantages of e-commerce for growing businesses:

  -open 24/7

  -cheap to operate compared to physical stores

  -give access to a huge range of potential customers

  -easy to sell to overseas customers

  -provide access to cost-effective promotional methods (e.g social media/email advertisements)
• changes of marketing mix when a business is trying to compete:

  product - styles, fashion trends, cultural beliefs

  price - tariffs/trading blocs, disposable income, exchange rates

  place - access to internet, purchasing preferences, distribution links

  promotion - cultural/social differences and translations