Globalisation
- Created by: Helen
- Created on: 19-04-13 22:51
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- Globalisation
- The shift toward a more integrated and interdependent world economy
- Perceived distance is shrinking due to advances in transportation and telecommunications technology
- Barriers to cross- border trade and investment are declining
- The Globalization of Markets
- The merging of historically distinct and separate national markets into one huge global marketplace.
- Implications for the Globalization of Markets
- Lower barriers to trade and investment mean firms can view the world, rather than a single country, as their market
- Low cost global communications networks such as World Wide Web are helping to create electronic global marketplaces
- Low costs transportation has made it more economical to ship products around the world, helping to create global markets
- Global communication networks and global media create a worldwide culture, and a global market for consumer products
- Implications for the Globalization of Markets
- Falling trade barriers make it easier to sell globally
- Implications for the Globalization of Markets
- Lower barriers to trade and investment mean firms can view the world, rather than a single country, as their market
- Low cost global communications networks such as World Wide Web are helping to create electronic global marketplaces
- Low costs transportation has made it more economical to ship products around the world, helping to create global markets
- Global communication networks and global media create a worldwide culture, and a global market for consumer products
- Implications for the Globalization of Markets
- Greater uniformity replaces diversity
- Consumers tastes and preferences are converging on same global norm
- The merging of historically distinct and separate national markets into one huge global marketplace.
- The Globalization of Production
- The sourcing of gooods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (land, labour, energy and capital)
- The Implications for The Globalization of Production
- As transportation costs have declined, dispersal of production to geographically seperate locations became more economical
- Lower information processing and communication costs make it possible for firms to create and manage a globally dispersed production system
- Lower barriers to trade investment mean firms can base production in the optimal location for that activity
- The Implications for The Globalization of Production
- Companies can lower overall costs e.g. China known for cheaper labour. Or improve the quality or functionality of their product offering e.g. India known for expert IT knowledge
- The Implications for The Globalization of Production
- As transportation costs have declined, dispersal of production to geographically seperate locations became more economical
- Lower information processing and communication costs make it possible for firms to create and manage a globally dispersed production system
- Lower barriers to trade investment mean firms can base production in the optimal location for that activity
- The Implications for The Globalization of Production
- To get access to scarce resources need to explore the world
- The sourcing of gooods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (land, labour, energy and capital)
- The Emergence of Global Institutions
- Help manage, regulate and police the global marketplace
- Promote the establishment of multinational treaties to govern the global business system
- General Agreement on Tariffs and Trade (GATT)
- The World Trade Organisation (WTO)
- International Monetary Fund (IMF)
- The World Bank
- The United Nations (UN)
- Drivers of Globalization
- Improvements in communications and information technology
- Improvements in distribution and transportation (Easier, quicker and cheaper to travel)
- The high minimum efficient scale of many countries
- The Lowering or elimination of many trade (and capital) barriers
- The increasing force of cultural convergence
- Worldwide increases in disposable incomes and the growth of a global middle class
- The shift toward a more integrated and interdependent world economy
- The shift toward a more integrated and interdependent world economy
- Perceived distance is shrinking due to advances in transportation and telecommunications technology
- Barriers to cross- border trade and investment are declining
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