Business and globalisation

Overview

Globalisation, imports and exports, moving production overseas, multinationals, tariffs and trade blocs, the effect of leaving the EU, and adapting the marketing mix abroad.

What you need to know

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Questions from this subtopic

Each one with the model answer underneath.

1. 1

   What is globalisation?

   Model answer

   Globalisation is the growing links between the world's economies through trade, investment and communication. Businesses now trade and produce across national borders.

2. 2

   What are imports?

   Model answer

   Imports are goods and services bought into a country from overseas. A UK supermarket selling bananas grown in Costa Rica is importing them.

3. 3

   How can imports create competition for UK businesses?

   Model answer

   Overseas firms can sell in the UK, often at lower prices because their costs are lower. UK firms must cut costs or improve quality to keep customers.

4. 4

   Why might a UK business buy its supplies from overseas?

   Model answer

   Overseas suppliers may offer lower prices or materials unavailable in the UK. The drawbacks include longer delivery times and exchange rate risk.

5. 5

   What are exports?

   Model answer

   Exports are goods and services sold to customers in other countries. Exports give a business access to many more customers and higher sales.

6. 6

   Why might a business change its location as a result of globalisation?

   Model answer

   A business may move production to a country with lower wages or rents. A base closer to overseas customers also cuts transport costs.

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