2.1.3 Business and globalisation

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What is globalisation?: The process of increasing interconnection through trade
Which of the following is a reason for globalisation?: Improvements in transport and communication
What is a positive impact of globalisation?: Foreign companies bring jobs and income into the country
What are imports?: Goods or services bought from abroad
Why might a business import raw materials rather than sourcing domestically?: Cheaper costs and improved competitiveness
What is an export?: Goods and services produced in one country and sold abroad
How can exporting goods and services benefit a UK business?: Increases potential sales
What is a barrier to international trade?: Tariffs on imports
Why would a government impose tariffs on imports?: To protect domestic industries from foreign competition
What is a trade bloc?: A group of countries that promote trade between its members
How does e-commerce help businesses compete internationally?: Reaches potential customers anywhere in the world
What impact does globalisation have on business location decisions?: Businesses may move production to countries with lower costs
What characterises a multinational company?: Owns or controls production in more than one country
What is one potential negative impact of globalisation?: It can drive out domestic businesses due to greater foreign competition
How might globalisation lead to changes in a business’s product range?: Adapting products to meet diverse global market demands
Why are trade blocs formed?: To encourage trade between member countries and reduce barriers
How does international competition affect domestic firms?: May undercut domestic firms, causing business closures
What strategy might a business use to adapt to globalisation?: Changing the marketing mix to suit international markets

2.1.3 Business and globalisation

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