Globalisation

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  • Globalisation
    • benefits
      • increased FDI
      • faster economic growth
      • exploitation of comparative advantage
      • economies of scale
      • technology transfers
      • spread risk
      • reduction in trade barriers
      • improved communications
      • improvements in transport
      • increased sales, volumes, revenues
    • disadvantages
      • environmental cost
      • domination of western brands
      • tax avoidance from MNCs
      • threat of IP theft
      • possible diseconomies of scale
    • oppurtunities
      • expansion overseas - EU, emerging markets
      • supply mass consumption e.g. food + drink
      • access to new markets/customers
      • access to low cost suppliers
      • oppurtunities to offshore/outsource production
      • low cost production
    • impact on strategy
      • different consumer tastes
      • promotional campaigns + conflicting beliefs/attitudes
      • language barriers
    • company examples
      • JLR/Burberry - luxury goods in China
      • Dyson - offshored to malaysia
      • GKN - success in china due to adaptation strategy
      • GSK + AstraZeneca - manufacturing plants in EU (Ireland, Poland, Sweden) and worldwide (China, Singapore, Mexico)
      • JCB - moved close to customers to minimise distribution + transport costs, overcome trade barriers (Brazil, India, Shanghai)

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