Increases exports and imports, increases foreign investment, people migrate to places where there are jobs, governments collaborate by agreeing trading rules.
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What do critics say about globalisation?
The unhealthy dominance of US and European brands across the globe, rich countries exploit less developed countries, sweatshop workers symbolise what is wrong with globalisation.
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What do supporters say about globalisation?
It brings wealth and development to many countries, made billions of people better off in financial and material ways, binds countries together and helps maintain peace and stability.
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What is globalisation?
The process through which and increasingly free flow of ideas, people, goods, services and capital leads to the integration of economies and societies.
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How does technology speed up globalisation?
Easier to communicate and transmit data, computers connect markets all over the world, conference calls makes face to face meetings less necessary and make it easier to do business, lower air fares makes face to face meetings cheaper.
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How does increasing trade liberisation speed up globalisation?
Countries have been de-regulating, de-restricting and creating a more free market, growth of trading blocs, countries have tried to align laws in areas such as intellectual property.
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What are intellectual property rights?
They are the rights to own and to exploit ideas or inventions, or literary or other cultural works. They give legal protection to the owners or originators of the ideas or inventions and prevent others from copying them.
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What are risks?
Threats that may not occur but can be quantified using probabilities.
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What is uncertianty?
Relates to possibilities what cannot be quantified and may appear without warning like a competing product.
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What is diversifying?
Selling more than one product or the same product in more than one market
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What might a business invest in when opeating in a new country?
Invest in a distrbution system, setting up retail outlets, build factories, set up a joint venture, expand by mergers and takeovers.
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What is inorganic growth?
When a business expands by taking over or merging with another company.
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What is a merger?
Combining with another company on a collaberative basis.
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What is a takeover or aquisition?
When one company buys another
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What is horizontal integration?
Involves a merger or takeover where both firms are in the same line of production. They could be undertaking just one part of the production process.
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What is vertical integration?
Amalgamating two businesses which have specialised in different parts of the production process
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Why may a business grow inorganicaly?
Entering new markets, increased turnover and profitability, economies of scale, synergy, balancing investments, brands and patents.
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Why does taking over a business reduce uncertianty?
Supply chains and distribution networks are allready in place, consumers are familiar with the brand, saves time and expense.
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What are economies of scale?
The reduction in average costs of production brought about by an increase in the size and scale of the business.
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What is synergy?
After a merger or takeover the combined business exceeds that of the two seperate businesses. Can be expressed as 2+2=5
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Other cards in this set
Card 2
Front
What do critics say about globalisation?
Back
The unhealthy dominance of US and European brands across the globe, rich countries exploit less developed countries, sweatshop workers symbolise what is wrong with globalisation.
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