Clever Grades

🎧 Read Aloud

Globalisation and International Business

Defining Globalisation

Core Definition

Globalisation is the process through which businesses, markets, and economies become interconnected worldwide. It presents both opportunities and challenges for businesses operating in an increasingly competitive international environment.

Impact of Globalisation on Businesses

1

Imports

Increased competition from overseas producers; forces domestic firms to improve efficiency and lower prices.
2

Exports

Selling to foreign markets opens up new customer bases and increases potential sales and profits.
3

Changing Locations

Relocating parts of operations abroad to reduce costs or be closer to global markets.
4

Multinationals

Large companies operating in multiple countries through subsidiaries, branches, or franchises.

Key International Actors

🌍

Multinationals

Large companies operating in multiple countries (e.g., McDonald’s, Nike). They often benefit from economies of scale, access to new markets, and resource diversification.
🏭

Relocation

Moving operations (like manufacturing or customer service centres) to low-cost countries to reduce costs and compete globally.

International Trade: Benefits and Risks

✅
The BenefitsBuying from overseas (importing) allows businesses to diversify their product range and benefit from different technologies or materials. Exporting increases potential sales and profits.
❌
The RisksReliance on imports may expose firms to supply chain risks like political instability or currency fluctuations. Multinationals must navigate different cultures and legal systems.

Barriers to International Trade

🛑

Tariffs

Taxes imposed on imported goods to protect domestic industries by making foreign products more expensive.
🤝

Trade Blocs

Groups of countries (e.g., European Union, NAFTA) that agree to reduce or eliminate trade barriers between themselves, creating preferential trading conditions.

How Businesses Compete Internationally

💻

Use of the Internet and E-commerce: Online platforms allow businesses to reach global customers without physical stores. E-commerce enables 24/7 shopping and access to markets worldwide. The internet also facilitates digital marketing, improving brand awareness.

Changing the Marketing Mix (4 Ps)

Marketing strategies need adapting to local tastes, cultures, and regulations to achieve competitive advantage internationally.

P1

Product

Businesses may modify products to meet local standards or preferences (e.g., McDonald’s offers different menus in India and Japan).
P2

Price

Pricing strategies may differ considering average income levels, competition, and tariffs.
P3

Place (Distribution)

Distribution channels are adapted to local logistics, retail environments, or online platforms.
P4

Promotion

Advertising messages and media must resonate with local consumers and comply with cultural norms.
```
Globalisation & International Business Deck
Term
Globalisation

What is globalisation?

Answer
Definition

The process through which businesses, markets, and economies become interconnected worldwide.

Term
Effect on Imports

How does globalisation affect imports?

Answer
Impact

It increases competition and allows businesses to access cheaper goods and diverse products from abroad.

Term
Risks of Imports

What are some risks of relying on imports?

Answer
Risks

Supply chain disruptions due to political instability or currency fluctuations.

Term
Benefits of Exporting

How can exporting benefit businesses?

Answer
Benefits

It opens new markets, increases sales and profits, and diversifies customer base.

Term
Relocating Operations

Why do companies relocate operations abroad?

Answer
Reason

To reduce costs and be closer to global markets.

Term
Multinational Company

What is a multinational company?

Answer
Definition

A large company operating in multiple countries via subsidiaries, branches, or franchises.

Term
Tariffs

What are tariffs?

Answer
Definition

Taxes on imported goods intended to protect domestic industries.

Term
Trade Bloc

What is a trade bloc?

Answer
Definition

A group of countries that reduce trade barriers among members (e.g., EU, NAFTA).

Term
E-commerce Role

How does e-commerce support international business?

Answer
Function

It enables 24/7 global sales and digital marketing.

Term
International Marketing Mix

Describe one way businesses adapt their marketing mix internationally.

Answer
Adaptation

They modify products to meet local tastes and regulations.

Tip: Tap a card to flip. Shuffle or Reset anytime.

🌍 Globalisation and International Business Quiz

1. What is the primary purpose of tariffs in international trade?

Tariffs are taxes on imported goods that make foreign products more expensive to protect local producers.

2. Which of the following is NOT generally a reason companies relocate parts of their operations abroad?

Relocation is mainly to reduce costs and improve market access, not to avoid tariffs by remaining in one country.

3. How can e-commerce benefit international businesses?

E-commerce platforms enable businesses to sell goods worldwide at any time and target global customers digitally.

4. Which trade bloc includes countries in Europe and encourages free trade among its members?

The European Union is a trade bloc that reduces trade barriers and encourages free trade among its members.

5. Why do businesses adapt their marketing mix in international markets?

Businesses tailor products, prices, promotion, and distribution to succeed in diverse cultural and regulatory environments.

📊 Results

  • Notes and Quiz
  • Business
  • GCSE
  • External Influences
  • EDEXCEL