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Business and globalisation
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Globalisation means the world's economies are more and more connected. This brings opportunities and threats for businesses.
Imports, exports and multinationals
Imports: goods bought from abroad. They bring overseas competition, but also let businesses buy cheaper materials.
Exports: goods sold abroad. They open up bigger markets.
Businesses may change location to where costs are lower.
A multinational is a business with operations (such as factories or offices) in more than one country.
Exports: goods sold abroad. They open up bigger markets.
Businesses may change location to where costs are lower.
A multinational is a business with operations (such as factories or offices) in more than one country.
Barriers to trade
Tariffs: taxes on imports. They make imported goods dearer.
Trade blocs: groups of countries that agree to trade freely with each other, such as the European Union. Members trade without tariffs, but businesses outside the bloc may face tariffs.
Trade blocs: groups of countries that agree to trade freely with each other, such as the European Union. Members trade without tariffs, but businesses outside the bloc may face tariffs.
Competing internationally
Use the internet and e-commerce to reach customers worldwide.
Change the marketing mix to suit local tastes, languages, culture and prices: for example, different menu items in different countries.
Multinationals bring jobs and investment to host countries, but may take profits home and push out local firms.
Change the marketing mix to suit local tastes, languages, culture and prices: for example, different menu items in different countries.
Multinationals bring jobs and investment to host countries, but may take profits home and push out local firms.
A UK clothing firm faces a 12% tariff to sell in a non-EU country. What is the effect?
- The tariff is a tax on its goods as imports there.
- Its products become more expensive for those customers.
Answer: Its goods become less competitive there.
Globalisation brings imports (competition and cheaper inputs), exports (bigger markets) and multinationals. Tariffs and trade blocs are barriers. Businesses compete through e-commerce and adapting the marketing mix.
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