Business & Globalisation (Edexcel GCSE Business)
Revision Note
Written by: Steve Vorster
Reviewed by: Jenna Quinn
Imports & Exports
Globalisation is the economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology & finance
The past twenty years has been characterised by rapid globalisation and growing international business expansion
Businesses that trade internationally import and export goods/services
Imports are goods and services bought by people and businesses in one country from another country
In 2022, the UK’s biggest import was cars valued at approximately £3.25 billion
Exports are goods and services sold by domestic businesses to people or businesses in other countries
In 2022, China’s biggest export was smartphone manufacturing valued at approximately $21.4 billion
Exports generate extra sales revenue for businesses selling their goods abroad
Imports result in money leaving the country which generates extra revenue for foreign businesses
Changing Business Locations
Globalisation has also presented opportunities for businesses to relocate to low-cost locations overseas
Businesses may choose to set up production facilities in other countries
This is a different process from choosing a country as a potential market for customers
In this sense, production includes both manufacturing and any services associated with the business e.g. call centres
Factors to assess when deciding considering setting up production facilities in another country
When setting up production facilities in another country, several factors need to be assessed to ensure a successful outcome
These include the costs of production, skills and availability of labour force, infrastructure, location in trade bloc, government incentives, the ease of doing business, political stability, natural resources available, and the likely return on investment
Factors when assessing production location
Factor | Why is this factor important? |
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Costs of production |
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Skills and availability of labour force |
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Infrastructure |
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Location in a trading bloc |
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Return on investments |
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Natural Resources |
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Political Stability |
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Ease of doing business |
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Government Incentives |
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Multinational Corporations
A multinational corporation (MNC) is a business that is registered in one country but has manufacturing operations/outlets in different countries
E.g. Starbucks headquarters are in Washington, USA but they have 32,000 stores in 80 countries
Factors such as globalisation and deregulation have contributed to the growth of MNC’s
MNC’s will choose locations based on factors such as cost advantages and access to markets
Nike originates from the USA but 50% of their manufacturing takes place in China, Vietnam and Indonesia due to the lower production costs in these countries
Advantages and Disadvantages of MNCs
Advantages | Disadvantages |
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