4.6.1

Business Considerations from Globalisation

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International Businesses and Globalisation

Aside from global production networks, Transnational Corporations help globalisation to spread and also take advantage of the economic liberalisation that has come with globalisation.

Glocalisation (a word made by combining globalisation & localization)

Glocalisation (a word made by combining globalisation & localization)

  • TNCs use glocalisation to help spread globalisation. This means that they adapt their products to the needs of local consumers.
  • For example, lots of global food TNCs offer a different menu in India where beef is not eaten.
    • Since 2012, McDonald’s has served the McVeggie and McSpicy Paneer in India.
Glocalisation reflecting laws

Glocalisation reflecting laws

  • Sometimes, glocalisation reflects the different laws in different countries.
  • For example, BMW makes right-hand drive cars for the UK because we drive on the left whereas, in Germany, cars are left-hand drive.
Development of new markets

Development of new markets

  • TNCs use the development of new markets to benefit from glocalisation.
  • As countries develop and their populations have higher disposable incomes to spend on ‘luxury’ items, TNCs are able to access new markets and sell their products in these countries.
Economic liberalisation

Economic liberalisation

  • TNCs take advantage of economic liberalisation. They take advantage of the removal of barriers to trade to earn more profit and increase their market share.
  • TNCs use outsourcing and offshoring to make sure that they are able to maximise their profits by minimising the costs of producing their goods.

World Trade Case Studies

World trade can be examined by looking at trade for a manufactured good (e.g. cars) and trade for a food commodity (e.g. bananas).

Cars

Cars

  • During 2016, global car exports amounted to over US$720 billion.
  • World production of cars is dominated by huge TNCs, based in the USA, Germany, Japan and South Korea.
  • The main importers and exporters of cars are all developed countries (Europe, USA) or emerging economies (India, China, middle eastern countries).
    • The leading importer is the USA.
    • The leading exporter is Germany.
  • The bulk of world trade in cars is between rich countries where people have high disposable incomes.
  • China and India are major producers of cars, but do not export significant amounts.
Bananas

Bananas

  • Bananas are mainly grown within the tropics and production is centred on Latin America (80% of exports), West Africa and parts of Asia.
  • Other producers include Asian countries (e.g. the Philippines) and west African countries (e.g. Cote d’Ivoire).
  • Production is dominated by large American TNCs (e.g. Chiquita and Del Monte)
  • Some production is sold directly to supermarkets.
  • Organic and Fairtrade produce is sold at a higher price.
  • The largest importers are the EU countries and the USA.
Jump to other topics
1

What is Business?

1.1

Nature & Purpose of Business

1.1.1Why Businesses Exist1.1.2Business Aims & Objectives1.1.3End of Topic Test - The Nature of Business
1.2

Different Business Forms

1.2.1Key Business Terms1.2.2Sole Traders1.2.3Limited Liability1.2.4Non-Profit Organisations & Social Enterprises1.2.5Social Enterprises1.2.6Franchising1.2.7Shareholders1.2.8End of Topic Test - Different Businesses1.2.9A-A* (AO3/4) - Franchising at Blockbuster
1.3

Businesses Operate Within an External Environment

1.3.1External Environments1.3.2A-A* (AO3/4) - Interest Rates in the UK
2

Managers, Leadership & Decision Making

2.1

Management, Leadership & Decision Making

2.1.1Managers2.1.2Management Theories2.1.3Management vs Leadership2.1.4Leadership Styles2.1.5End of Topic Test - Management
2.2

Management Decision Making

2.2.1Scientific Decision Making2.2.2Influences on Decision Making2.2.3Intuition Decision Making2.2.4A-A* (AO3/4) - Cost Leadership2.2.5End of Topic Test - Management Decisions
2.3

Role & Importance of Stakeholders

2.3.1Stakeholders
3

Marketing Management

3.1

Setting Marketing Objectives

3.1.1Setting Marketing Objectives3.1.2Market Calculations
3.2

Understanding Markets & Customers

3.2.1Market Research3.2.2Methods of Market Research3.2.3Interpreting PED & YED
3.3

Segmentation, Targeting, Positioning

3.3.1Segmentation3.3.2Niche & Mass Markets3.3.3Market Mapping
3.4

Using the Marketing Mix

3.4.1Marketing Mix3.4.2Pricing Decisions & Price Skimming3.4.3Pricing Decisions & Price Penetration3.4.4Promotional Decisions3.4.5Promotional Decisions 23.4.6Promotional Decisions 33.4.7Distribution Decisions3.4.8Distribution Decisions 23.4.9Social Media & Influencers3.4.10Digital Marketing3.4.11Evaluating Digital Marketing3.4.12A-A* (AO3/4) - The Marketing Mix & Promotion3.4.13A-A* (AO3/4) - Pricing & Competition
4

Operational Management

4.1

Setting Operational Objectives

4.1.1Setting Operational Objectives
4.2

Analysing Operational Performance

4.2.1Operations Data4.2.2Capacity4.2.3A-A* (AO3/4) - The Problem with Operations Data
4.3

Increasing Efficiency & Productivity

4.3.1Productivity & Efficiency4.3.2Lean Production4.3.3Technology & Efficiency4.3.4A-A* (AO3/4) - Toyota Production System
4.4

Improving Quality

4.4.1Measuring & Identifying Quality4.4.2Total Quality Management4.4.3Evaluating Total Quality Management4.4.4Quality Assurance & Quality Control
4.5

Managing Inventory & Supply Chains

4.5.1Inventory4.5.2Improving the Supply Chain4.5.3Outsourcing
4.6

Business & The External Environment

4.6.1Business Considerations from Globalisation
5

Financial Management

5.1

Setting Financial Objectives

5.1.1Setting Financial Objectives5.1.2Influences on Financial Objectives5.1.3Profit5.1.4Revenue & Costs5.1.5Cash-Flow & Budgets
5.2

Analysing Financial Performance

5.2.1Break-Even & Profitability Analysis5.2.2A-A* (AO3/4) - Assessing Financial Performance
5.3

Sources of Finance

5.3.1Internal Sources of Finance5.3.2External Sources of Finance5.3.3Crowdfunding5.3.4Factors for Financing5.3.5A/A* (AO3/4) - Debt
5.4

Improving Cash Flow & Profits

5.4.1Improving Cash Flow & Profits
6

Human Resource Management

6.1

Setting Human Resource Objectives

6.1.1Setting Human Resource Objectives6.1.2Human Resource Management
6.2

Analysing Human Resource Performance

6.2.1Analysing Human Resource Performance6.2.2Analysing Human Resource Performance 2
6.3

Improving Org Design & Human Resource Flow

6.3.1Organisational Design6.3.2Human Resource Flow
6.4

Improving Motivation & Engagement

6.4.1Motivating & Engaging Employees6.4.2Different Incentives6.4.3Evaluating Incentives6.4.4Taylor's Theory6.4.5Maslow's Theory6.4.6Herzberg's Theory6.4.7A-A* (AO3/4) - Amazon & Netflix Org Design6.4.8A-A* (AO3/4) - Taylorism & Jack Welch
6.5

Improving Employer-Employee Relations

6.5.1Improving Employer-Employee Relations
7

Strategic Position of a Business (A Level Only)

7.1

Mission, Objectives, Strategy

7.1.1Business Mission & Corporate Objective7.1.2Mission, Corporate Objectives & Strategy7.1.3SWOT Analysis7.1.4A-A* (AO3/4) - SWOT Analysis
7.2

Financial Ratio Analysis

7.2.1Financial Ratios
7.3

Assessing Overall Performance

7.3.1Non-Financial Data7.3.2Core Competences7.3.3Assessing Business Performance
7.4

Assessing Political & Legal Change

7.4.1Political & Legal Change
7.5

Assessing Economic Change

7.5.1Economic Environment
7.6

Assessing Social & Technological Change

7.6.1Social & Technological Environment7.6.2Lifestyle & Technological Environment7.6.3Corporate Social Responsibility
7.7

The Competitive Environment

7.7.1Choosing Areas of Competition7.7.2Choosing How to Compete
7.8

Investment Appraisal

7.8.1Investment Appraisal
8

Choosing Strategic Direction (A Level Only)

8.1

Markets to Compete & Products to Offer

8.1.1Product Decisions
8.2

How to Compete

8.2.1Porter's Five Forces8.2.2A-A* (AO3/4) - The 5 Forces
9

Pursuing Strategies (A Level Only)

9.1

Assessing a Change in Scale

9.1.1Growth & Retrenchment9.1.2Challenges of Growth9.1.3Sourcing Resources & Entering Markets9.1.4A-A* (AO3/4) - Diversification9.1.5A-A* (AO3/4) - Diseconomies of Scale
9.2

Assessing Innovation

9.2.1Assessing Innovation
9.3

Globalisation & Internationalisation

9.3.1Internationalisation9.3.2Managing Internationalisation9.3.3Impact of Internationalisation9.3.4A-A* (AO3/4) - Internationalisation in Guatemala
9.4

Greater Use of Digital Technology

9.4.1Assessing Use of Digital Technology9.4.2Impact of Digital Technology
10

Managing Strategic Change

10.1

Managing Change

10.1.1Managing Change
10.2

Managing Organisational Culture

10.2.1Managing Organisational Culture10.2.2Organisational Structures
10.3

Managing Strategic Implementation

10.3.1Managing Strategic Implementation
10.4

Problems with Strategy & Why They Fail

10.4.1Problems with Strategy

Practice questions on Business Considerations from Globalisation

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    TNCs use glocalisation to help spread globalisation. What does glocalisation mean?Multiple choice
  2. 2
    What is an example of a TNC adapting their goods to local consumers?Flashcard
  3. 3
    Which country is the leading importer of cars worldwide?Multiple choice
  4. 4
    Car exports and imports:Fill in the list
  5. 5
    Which countries are major producers of cars, but do not export very many?Multiple choice
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Outsourcing

Setting Financial Objectives