Impact of Globalisation on Global Companies

What Impact of Globalisation on Global Companies covers

Impact of Globalisation on Global Companies is examined in Paper 2, Competing in the global economy, and in Paper 3, The economic environment and business. It covers globalisation and glocalisation, ethnocentric, polycentric and geocentric approaches to global markets, price and non-price competition in global markets, branding and differentiation in global markets, cultural and language barriers in global markets and adapting marketing strategy for niche and mass markets.

The 6 subtopics

Each one has its own page.

• Globalisation and glocalisationGlobalisation and glocalisation, think global, act local, the cost advantages and failures of standardised products, glocalisation by fast food chains and streaming services and its extra cost, the trade-off between standardisation and adaptation, which parts of the marketing mix are adapted, converging national markets, and global brands.Open →
• Ethnocentric, polycentric and geocentric approaches to global marketsEthnocentric, polycentric and geocentric approaches to global markets, the advantages and disadvantages of each, costs of polycentrism, managing a geocentric firm and its use of talent, which approach suits industrial components and which suits food products, how approaches change with experience, subsidiary independence, and scale with local adaptation.Open →
• Price and non-price competition in global marketsPrice against non-price competition in global markets, offshoring and price competitiveness, penetration pricing abroad, international price discrimination and the conditions for it, grey markets, exchange rates and competitiveness, smaller pack sizes for low-income markets, forms of non-price competition, adapting promotion and place, differentiated demand, and the risk of competing on price alone.Open →
• Branding and differentiation in global marketsProduct differentiation and brand equity, global brands and price elasticity, the benefits of a strong brand in an unfamiliar market, branding where quality is hard to judge, the risks of a single global brand, keeping local brand names, positioning one brand differently, marketing economies of scale, unique selling points, counterfeiting, and falling trade barriers.Open →
• Cultural and language barriers in global marketsCultural factors that affect sales abroad, food and drink firms, religious dietary rules, colour symbolism, household size, attitudes to credit, cultural distance, the problems language differences cause, literal translation and transcreation, local marketing staff, translation errors on packaging, literacy rates, and business culture.Open →
• Adapting marketing strategy for niche and mass marketsNiche against mass markets abroad, the advantages and disadvantages of a niche strategy in a foreign market, home mass-market products becoming niche products abroad, adapting pricing and distribution for low-income mass markets, one brand across segments, market research, digital advertising, entering as a niche player, cultural responses, segmentation, and low unit costs.Open →

What you need to know

Answer each one before you reveal it.

Take Impact of Globalisation on Global Companies further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Globalisation vs Glocalisation

  Globalisation: the increasing integration of national economies through trade, investment, migration and flows of technology, so that firms and markets operate across borders. Glocalisation: Selling one worldwide product that has been adapted to suit the tastes, culture, regulations and incomes of each individual market.

• Ethnocentric approach vs Polycentric approach

  Ethnocentric approach: treating the home country as the model and selling the same product, marketing and management practice abroad with little or no adaptation. Polycentric approach: Treating each country as a distinct market, with local subsidiaries setting their own products, marketing and often their own management.

• Price competition vs Non-price competition

  Price competition: winning customers by charging less than rivals do. Non-price competition: Winning customers through quality, branding, design, service, innovation or availability rather than by charging less, which rivals take far longer to copy.

Questions from this topic

Each one with the model answer underneath.

1. 1

   Define globalisation.

   Model answer

   Globalisation is the increasing integration of national economies through trade, investment, migration and flows of technology and information, so that firms and markets operate across borders.

2. 2

   Define glocalisation.

   Model answer

   Glocalisation is selling a global product that has been adapted to suit the tastes, culture, regulations and incomes of each local market.

3. 3

   What does the phrase think global, act local mean for a multinational?

   Model answer

   It means the firm keeps one global strategy, brand and cost base while allowing decisions on product detail, promotion and distribution to be made to fit each local market.

4. 4

   Give two cost advantages of selling a completely standardised product worldwide.

   Model answer

   Longer production runs deliver economies of scale, and one product design and one advertising campaign serve every market, so development and marketing costs per unit are lower.

5. 5

   Give two reasons a standardised global product can fail in a particular market.

   Model answer

   Local tastes, diets or climate may make it unsuitable, and local rules on ingredients, safety or labelling may prohibit it as designed.

6. 6

   How does a fast food chain apply glocalisation?

   Model answer

   It keeps its brand, service format and core menu worldwide but changes recipes to respect local diets and tastes, for example offering vegetarian and chicken dishes in place of beef in India.

What is inside Levo

Six ways to work the same material.

Impact of Globalisation on Global Companies revision questions

What does Impact of Globalisation on Global Companies cover in Edexcel A-Level Economics B?

6 subtopics: globalisation and glocalisation, ethnocentric, polycentric and geocentric approaches to global markets, price and non-price competition in global markets, branding and differentiation in global markets, cultural and language barriers in global markets and adapting marketing strategy for niche and mass markets. Each one has its own page with questions and model answers.

How is Impact of Globalisation on Global Companies organised?

By the Edexcel 9EB0 specification, subtopic by subtopic, so it matches the order you are taught it in.