2.4Globalisation

2.4Globalisation

1. Benefits of Globalisation

   • Rapid Growth
     • e.g. buying in bulk means lower unit costs for raw materials
   • Inward investment
     • e.g. building new factories or buying companies
     • Investing money into another country
   • Cheaper resources
     • Including cheaper imported coal and cheaper costs of labor, helping reduce overall costs and improve competitiveness

2. Drawbacks of Globalisation

   • competition from overseas
   • New competitors emerging from abroad
   • Threat of takeover with foreign businesses buying UK businesses

3. Questions

   • What is Globalisation?
     • Markets becoming world-wide
   • What does MNC stand for?
     • Multi national companies
   • Effect on people
     • People in poorer countries have increasingly migrated to richer countries for work and more money (remittances
   • Effect on globalisation
     • People migrating are sending money back home to family
   • What is international trade?
     • The selling of goods or services across national frontiers
   • What is a MNC?
     • Enter text here...
     • A manufacturer that exports its products to multiple countries

4. Economies of scale

   • When a business's unit cost of production falls as it's output rises and the business expands

5. Takeover

   • When one business buys control of another

6. Exchange rate

   • The price of one country expressed in terms of another
   • If the exchange rate rises imports are cheaper and exports are more expensive
     • If the exchange rate rises then it would have a positive impact on countries that imports goods to sell
   • If the exchange rate falls the imports are more expensive and the exports are cheaper
     • A fall would increase the profits of a business who exports

7. Imports and Exports

   • Exports are the goods/services leaving (e.g. U.K.) (times)
   • Imports are imported from overseas into (e.g. U.K.) (divide)