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CH9: GLOBALISATION

CH9: GLOBALISATION. GLOBALISATION:. The growing trends towards worldwide markets in products , capital and labour . The key features of globalisation that have on business strategy are: increased international trade as barriers to trade are reduced

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CH9: GLOBALISATION

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  1. CH9: GLOBALISATION

  2. GLOBALISATION: The growing trends towards worldwide markets in products, capital and labour. • The key features of globalisation that have on business strategy are: • increased international trade as barriers to trade are reduced • growth of multinational businesses in all countries as there is greater freedom for capital to be invested from one country to another • freer movement of workers between countries

  3. Multinational Companies: Business organisations that have their headquarters in one country, but with operating branches, factories and assembly plants in another country. Headquarters = Head Office

  4. Multinational Companies: LOTS MORE!

  5. With the person next to you (2 or 3people)- list as much multinational companies as you could within 1 minute.

  6. Free International Trade: International trade that is allowed to take place without restrictions such as ‘protectionist’ tariffs and quotas. Tariff: Tax imposed on an imported product. Quota: A physical limit placed on the quantity of imports of certain products.

  7. Why become a multinational? 1.Closer to the main markets • Lower transport cost • Better market information • May be perceived as being more local than other companies. 2.Lower Cost Of Production • Lower labour rates. • Cheaper rent and site costs. • Government grants and tax intensive.

  8. Why become a multinational? 3. Avoid import restrictions 4. Access to local natural resources 5.Take advantage of expanding markets in other countries

  9. WORD SEARCH TIME!!! This word search contains 5 keywords that you’ve learnt from this chapter.

  10. SOLUTION

  11. Host countries of multinational: Benefits: • Inflow of foreign currency (investment & exports) • Creates employment opportunities • Tax revenue increased • Quality & Productivity gain from local firm • Output of the economy will increase (GDP) Disadvantages: • Pollution • Competition causes local firm to close • Profits return to home country • Depletion of limited natural resources.

  12. Regional Trade Blocs There are four main types of trading agreements between nation: 1. Free trade areas (FTA): When a group of countries have removed tariffs and quotas between themselves, while retaining the right to set tariffs/quotas towards non-members. EXAMPLE: NAFTA (North American Free Trade Area: USA, Canada and Mexico)

  13. 2.Customs Union (CU): All the benefits of a free trade area AND countries adopt a common set of trade restrictions with non-members. EXAMPLE: Mercosur- Argentina, Brazil, Paraguay, Uruguay and Venezuela

  14. 3.Common Market (CM): Extended version of Custom Union- They aim to create the trading conditions that would exist within just one country. They allowing the free movement of capital and people within member states and also imposing common product standards throughout the area. EXAMPLE: European Union (EU)

  15. 4. Economic and monetary unions (EMU) : These attempt to create many of the economic conditions that exist within just one country. • Common Currency • One single interest rate EXAMPLE: THE EURO-ZONE COUNTRY

  16. Example of regional trade blocs: ASEAN

  17. Example of regional trade blocs: • ASEAN(Association of Southeast Asian Nations) • FREE TRADE AREA • Member States: • Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. • Goals: • Accelerate economic growth, social progress and cultural development in the region • Promote regional peace and stability and stick to United Nations Charter.

  18. DONE 

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