Unit 1 - Globalization Case Studies

Overview

Founded in 1919 by Jack Cohen as a group of market stalls. First store opened 10 years later in Burnt Oak, Middlesex. It now has 450,000 employes with 6351 stores and a net income of £2.8 billion in 2012. 

Positives

• First overseas chain set up in the late 1990's in central/eastern Europe. 1998 saw joint venture with Korean TNC Samsung and stores opened in SE Asia.
• As of 2007, Tesco has locations in 12 countries, and 57% floor space is outside the UK.
• £1 of every £8 spent in the UK in 2007 was spent in Tesco.
• Is the UK's leading retailer with quadrupled profits in the last 10 years.
• Worldwide sales topped £47B in 2007.
• Influx of overseas jobs has helped to raised living standards in LDC's.

Negatives

• Profits made from overseas stores came back to the UK and didn't help the surrounding communities.
• Local suppliers are undercut by cheaper produce overseas (Polish milk sold in C Europe).
• Large supermarket chains cause local shops to close.

Push/Pull Factors

• High unemployment (19% in 2004)
• Low averages wages ($12,000 in 2004)
• Low availability of housing (300 dwellings for every 1000 people)
• Ease of migration (only UK, Ireland and Sweden allowed unlimited migration)
• Good exchange rate (£1 = 7 Zloty in 2004)
• Plenty of better paid jobs (shortage in labour which the Polish could capitalize on)

Impacts (Poland/UK)

• Income generated by migrants is being sent back to Poland (€3.45B in 2006).
• Polish economy has slowed due to the shortage of labourers.
• Population has shrunk by 0.3%. Birth rate has also decreased.
• Air traffic has increased between the two countries (3.3M passengers in 06). Increases GHG emissions.
• These workers have contributed to the UK's GDP (1st 8 months of migrant flow brought in £240M)
• UK population has increased as more migrants of reproductive age enter. Has helped to combat ageing population problem, as migrants pay taxes which support pensions.
• Shops selling Polish products have opened in areas with lots of migrants.

Push/Pull Factors

• Cost of living is rising in the UK
• The UK has a cool, wet and changeable climate (2010 winter coldest in last few decades).
• Cost of living is falling in Spain (cheaper housing)
• Hot, dry and stable climate (Costa Blanca has 320 days of sun a year).
• Improved communications allow migrants to keep in touch with family.
• Increase in budget air travel allow for more frequent visits from family members.

Impacts (Spain/UK)

• The population of Spain is generating a greater proportion of elderly people.
• Many migrants return back to the UK, which increases air traffic and GHG emissions.
• A lot of migrants are reaching an age where they need long-term medical care, which the Spanish health system can't deal with.
• The UK migrants have developed ethnic and tourist enclaves, seperating themselves from the community, which has led to tensions between the British and Spanish.
• The loss of the grey pound, with less money being made from elderly people spending in leisure sectors.
• The cost of paying for healthcare of migrants led to the NHS stopping free healthcare for ex-pats in 2008.

Urban Cycle

• Urbanisation is occuring (net gain of 70,000 international migrants)
• Counter-urbanisation is also occuring (net loss of 80,000 to mainly rural areas)
• Re-urbanisation is happening around London Docklands (population doubled since 1980's development).

Economy

• 85% of London employees work in service sector
• Has one of the largest stock exchanges (location of major bank headquarters like HSBC)
• Tourism is a major part of economy (15 million tourists in 2006)

Housing Patterns

• Poorer places like Hackney have undergone gentrification (rich and poor live together).
• Surburban growth has led to villages around London becoming suburbs (Streatham became a wealthy suburb during 19thC).

Urban Cycle

• Urbanisation is occuring (1.1M migrants from out of Mumbai between 1991-2001)
• Suburbanisation is occuring (suburbs developing along main rail and road routes)

Economy

• Until the 80's, economy was based mainly on textiles and shipping.
• There's been an increase in IT and financial services.
• Mumbai's a major centre for out-sourced work (UK based Prudential has a call centre in Greater Mumbai)
• Mumbai is a major media centre (Bollywood film industry sold 3.6B tickets worldwide).

Housing Patterns

• The wealthiest area (Malabar Hill) is near to the Central Business District.
• 1/2 population live in shanty towns (Dhavari is the biggest, more than 600,000)
• Wealthier suburbs have been built along road/rail routes, but shanty towns are squeezed in as close to transport links as possible.