Corporate connections

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  • Corporate connections
    • Corporate colonialism
      • the East Indian Company ruled 20% of the worlds population and was probably the first TNC
      • The top 200 TNC's account for 25% of the worlds economic activity and employ 1% of the worlds work force
      • 6 of the top 10 TNC's originate in the US and make more money in a year than a countries entire GDP
      • The top three TNC's are Exxon Mobil (US), Wal-Mart (USA) and Royal Dutch Shell (Netherlands and UK)
    • How do TNC's grow?
      • Motive
        • Horizontal integration - by buying up the competition
          • Ford moved from mass-market sales up to up-market sales by acquiring Jaguar, Volvo and Land Rover
        • Vertical Integration - by controlling and owning every stage of production from exploration to research through to sales
          • Exxon own oil wells, oil tankers, oil refineries and petrol stations, there is no middle-man
        • Economies of sale - companies expand production (e.g. Apple computers) to increase efficiency and reduce unit production costs
      • Means
        • Companies invest overseas to boost their market presence or to take advantage of labour and environmental laws
          • Growing trend in this century has been for TNC's from developing countries to invest overseas
        • A kind of Reverse Colonialism is happening where the poorer countries now account for more than 15% of overseas investment
      • Mobility
        • accelerated and cheaper transport - including the use of ever-larger container ships
        • accelerated communications systems - using fibre optics, satellite and digital technology
        • Production systems that can provide cheap and fast turn around like "just-in-time" production
    • Searching globally, selling locally
      • Criticisms of supermarkets are more to do wit the way that most food in the UK is sourced and sold
        • Large supermarkets search the world in order to deliver the best-priced or guaranteed quality foood to their customers
          • The bigger the company the bigger its purchasing power is and its ability to control suppliers and prices
      • In the case of fresh food, this means that produce is flwon or shipped from one side of the world to another to supply out-of-season fruit or veg
      • As they search for the cheapest food they sometimes expolit the farmers and force the prices down
    • Searching locally, selling globally
      • Land has to be cleared in order to have more farm land to supple the demand that supermarkets require to feed the UK
      • But TNC's bring both employment and money into a developing economy
        • As well as employment, it gives the workers certain skills that can give them an opputunities to make their own businesses or to better paid companies

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