Created by jessmitchell about 5 years ago
Case Study- Nike - Vietnam
MNC investment into a specific area in an international context
About Nike- operates in over 160 countries around the world, making it an MNC-founded in 1972-aims to 'bring inspiration and innovation to every athlete in the world'-makes sports shoes, clothing and equipment-HQ is in Oregon USA-Research and development are based in Oregon-Most of its factories and over 75% of its work force are located in Asia, including Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines and Malaysia.-Worldwide the employ 650000 contract workers in 700 factories most of whom are women under 25-revenue totals at $19 billionAbout 75 million pairs of shoes are made annually for Nike in Vietnam alone
Advantages for NIKE of basing factories in Vietnam- cheap labour-quick and cheap production-more profit-cheap factories-low tax rates-low energy bills-fewer laws & restrictions, e.g. workers rights, pollution etc.
Advantages for THE PEOPLE & GOVERNMENT of basing factories in Vietnam- creates substantial employment-improves the skill base of the local population-pays higher wages than most local companies-helped to attract more MNCs-its contribution to tax helps pay for infrastructure-exports of Nike products are a contribution to the balance of payments-sets new standards in efficient production for indigenous companies
Disadvantages for NIKE of basing factories in Vietnam-transport costs-operating costs-hard to deal with lots of factories around the world-import & export costs-long transport time period
Disadvantages for THE PEOPLE & GOVERNMENT of basing factories in Vietnam- the company image and its advertising along with that of other MNCs may help to undermine national culture-there are concerns about the political influence of MNCs-Investment could be transferred quickly from Vietnam elsewhere, leaving people without jobs.
Nike: international contextNike does sometimes make shoes in USA but only on a short term basis when specialised products are in demand due to a change in fashion or a new trend- because importing from South East Asia would take too long to transport.Nike has a lot of allegations of poor working conditions in their foreign factories and they are often referred to as sweat shops. Therefore in 2000 they have tried to improve the conditions in all 700 factories and produced a detailed report about it.
Case Study- LEDC- Kenya
factors affecting the location of economic activity in an LEDC
Throughout Kenya there is economic activity varying in types and popularity, all located in areas which are best suited to their purpose, and many factors contribute to the location of the industry within the country itself. Kenya has been a popular holiday destination for adventure seeking tourists for over 30 years, popular for its hot, sunny climate, stunning beaches and of course the world famous wildlife and natural beauty of the national parks. Kenya, however, is not only used for tourism, it is used for industry too.
Primary sector-Kenya is used for both types of farming, livestock & crops-There are lots of crop farms in the Western and Nyanza provinces in the country, which produces tea, coffee, tobacco and fruit, plus beans and maize. This area receives the ideal amount of rainfall to support crops which is important in such a dry continent.-In the east of Kenya it is too dry for crops so livestock are reared here instead. Camels and cattle are the main two species, particularly in the North East province. The ground here is suitable for grazing even though its too dry for crops.-In the Magadi area of Kenya, trona, a mineral used to make glass is extracted because Lake Magadi is the ideal location, as the mineral forms around the lake when water evaporates. The Trona is then exported from Nairobi
Secondary sector-Lots of factories that produce textiles, food and drink like the Mamias sugar production company who produce sugar to be exported around the world exist in Kenya, particularly in Nairobi-The area (Nairobi) is great for business due to the fact the area has excellent transport links, including an airport, meaning it is very easy to export finished goods to the rest of the world. It is also easy to import raw materials into factories & manufacturing plants-The area has a huge population of 3 million people meaning there is a very available skilled workforce to be employed, a major factor for all businesses.-In the Coast Province of Kenya, there is cement works, which are located, due to the fact limestone is used from the nearby deposits of raw material to use in production lines in Nairobi. The limestone is greatly sourced and can be used in a variety of production types. The location of industry is reliant of where the limestone is found.
Tertiary Sector-There is a huge tourist industry in Kenya.- The Rift Valley features a huge amount of tourist activity; due to the fact the area has several national parks, such as Hell's Gate & the Amboseli, both which attract thousands of tourists a year.-Tourists come looking for wildlife & especially for the 'Big 5' famous animals, rhinos, lions, leopards, and buffalo and African elephants. Therefore safaris are very popular and sought after, which means people can be employed to run them-Tourism is also drawn to famous lakes such as Lake Naivasha where hippos are very common and can be viewed up close, and Lake Nakuru, where there are many flamingos.-Mount Logonot is also located in the Rift Valley, a mountain able t be climbed by tourists on tours, drawing more economic activity to the area.-Huge tourist industry exists near Mount Kenya, in the wast of the Rift Valley, which is the second highest mountain in Africa, at 500m high. Tourists flock to this area for tours of the mountain & activities like hiking and more safaris.-Any companies advertising safaris or tours of the mountain will do very well so many choose to locate here.-The coast province of Kenya also has a strong tourism industry due to the natural beauty of the beaches, such as Diani beach where average temperatures are between 27-30*c, which attracts sun seeking tourists yearly.-Businesses and companies set up here because there is a huge market. the area is famous for coral reefs and kite surfing and companies offering boat tours and scuba diving do very well.
Case study- LG in South Wales
factors affecting the location of an economic activity in an MEDC
LG is an electronics company that works worldwide creating products such as phones, televisions and more.
LG opened an electronic plant in Newport, South Wales, for several reasons.
Reason 1)There was a large skilled workforce in the area, who do not strike often, which meant money would not be lost on working days, and the work force was relatively cheap to employ in comparison to South Koreans and other European countries.
Reason 2)Secondly, they wanted to locate within the EU to avoid paying the expensive tariffs and import duties that they would have to pay if they located elsewhere, so that their products were always competitive.
Reason 3)The Welsh Development Agency offered them a generous grant worth £200 million, the most generous of any UK region. This was to help unemployment in the area which was relatively high.
Reason 4)The area has excellent transport links, as the site is just off of the M4 motorway, which links directly to London, the M5 to the Midlands or the south west, and links to all other UK motorways
Reason 5)There is also a port at Newport, which is excellent for imports and exports, as well as a regional airport nearby too. This means that compnents or finished goods can be easily transported to the rest of the UK or EU
Reason 6)The site was also a large flat greenfield site, which was easy to build on, and very unlikely to flood which would be disastrous for the company
Case study- Mexican Migration to the USA
Over 1 million Mexicans migrate to the USA every year
The border between Mexico and the USA is 2000km long
All migration is not legal, in fact much of it is illegal, so the border is guarded by USA border patrol which then catches the illegal immigrants and takes them back over the border.
850000 mexicans were caught living illegally in the USA in 1995
Why do they migrate?Pull factors- USA- much more availability of job opportunities in comparison to Mexico, so people migrate hoping for a better quality of life and an income which they may not be able to get in Mexico.- the jobs are also well paid in comparison to Mexico- GNP is £24750 which is £21,000 more than Mexico!!!- There is a much better education system in the USA than Mexico, adult literacy is 99% compared to only 55% in Mexico.-The USA also has much better living conditions than Mexico, with much higher quality health services, housing and sanitation.
Push factors- Mexico- Jobs are low paid, with GNP very low at only £3750 a year, which is hard to live off of in comparison to a well-paid job in America. There is no minimum wage.-There are very poor medical facilities which means life expectancy is lower and disease spread is worse than in the USA-Adult literacy is very low as there is poor education and only 55% of the adult population can read and write. -Living conditions are very poor and there is poor sanitation, housing and crime rates.
Impacts on the USA-Illegal migration costs the government millions of dollars on border patrols and prisons for those caught.- Migrant workers keep the wages low which affects the American workers in a negative way.-They do however help the economy because they are willing to work for low wages because even the low wages beat those in Mexico-There is a higher demand for jobs however as there will be more competition between jobs and some Americans may be unemployed while migrants can work.
Impacts on Mexico-Because many of the young working age people are leaving to go to America, Mexico has a shortage of economically active people meaning the economy cannot grow.-Towns and cities lose their inhabitants which can have social impacts- Because mostly the men migrate it is difficult for the women to find a partner, which means it is less likely they will have children.-Young people tend to migrate, leaving an ageing population with very old and young people who cannot work so the economy cannot grow.-However legal and illegal immigrants send back about a million a year.
What is being done?The USA has quotas for how many it will allow in each year (^75000) and also tries to control illegal immigration, a problem on the borderA fence which is patrolled by the USA border patrol has been built for thousands of miles along the border and illegal immigrants are deported regularly
Case Study- The Aral Sea
The Aral Sea is located between Kazahkstan and Uzbekistan. When the former Soviet Union diverted the Amu Darya and the Syr Darya- the rivers which fed the Aral Sea- to grow cotton in the desert, they created an ecological and human disaster. What was the fourth biggest inland sea is now mostly desert. By 2007 the sea has shrunk by 90% and split into several lakes, its level has decreased by 40m and its shorelines receded by 120km.
The problemThe environmental problems of the Aral Sea basin are among the worst in the world. Water diversions, agricultural practices and industrial waste have resulted in a disappearing sea, salinization, and organic and inorganic pollution. The problems of the Aral, which had previously just been problems for the Soviet Union, because international problems in 1991. Because water has been taken out of the rivers feeding the sea, the sea has been rapidly shrinking, leaving behind huge amounts of salt on the seabed from evaporation. This salt has caused huge problems. Huge amounts of chemical fertilisers and pesticides like DDT were used and irrigation was not well connected and lots of water was just wasted.
-Breathing problems have spread, such as lung cancer as the high levels of salt in the air make breathing more difficult for people living in the areas around the Aral Sea-Cancers, lung disease and infant mortality are 30 times higher than they used to be because the drinking water is heavily polluted with salt, cotton fertilisers and pesticides-most species of fish in the sea died because of the increased salinity and some of the pollution. his meant over 60,000 has to abandon their livelihood of fishing. The formerly flourishing ecosystem supported 24 fish species which are now rare and disappearing fast.-The climate has changed because of the desertification, there is very little rainfall, the summers are hotter and winters colder and longer. Dust storms occur on 90 days a year. - Before 1960 the river deltas were home to over 70 kinds of mammals & 319 types of birds. At present only 32 types of mammals and 160 bird types remain- so biodiversity has drastically declined.-Because people's livelihoods have decreased in the fishing industry, mainly- people are very poor and live in deep poverty- which means living conditions and poor and the life expectancy is lowering.
Why has this happened?The Soviet Union wanted to use the desert land around the Aral sea and the rivers feeding it for something useful, and so they decided to divert water from the Amu Darya and Syr Darya to irrigate crops for cotton farming. They wished the area to become the cotton belt for the USSR and so introduced the huge scale irrigation Aral Sea plan. Irrigation doubled in the area between 1960 and 1990.
ImprovementsSince the 1980s the cultivation of new large irrigated areas was banned and large scale water resources projects have been introduced. At the same time measures to improve living conditions in the Pre-Aral area have been adopted at the expense of the construction of health protection objects, water supply, gasification, improved social care and the watering of the Amu and Syr Darya deltas.
A dam was built across the Berg Strait, called Dam Kokaral, which divides the Aral into two parts, North & south. The Syr Darya water flows into the south and slowly filled its dry bed. The water level rose by 1.5m and the growth of salinity stopped at a reasonable level.The water came into the city of Aralsk covering a distance of 10km.The first signs of improvement in the ecological situation appeared: It rained more often, vegetation cover rehabilitation took place in the coastal area, the level of sea water salinity was reduced, giving the opportunity of fresh fish supplies. More species of fish have returned to the deltas of the rivers and this could continue into the future.
kenya- economic activity
LG- SOUTH WALES
MEXICAN MIGRATION TO THE USA