Theme 4 - Global business

4.1 Globalisation

4.1.1 Growing Economies

a) Growth rate of the UK economy compared to emerging economies

b) Growing economic power of countries within Asia, Africa and other parts of the world

c) Implications of economic growth for individuals and businesses:

Trade opportunities for businesses

Employment patterns

d) Indicators of growth:

Gross Domestic Product (GDP) per capita

Literacy

Health

Human Development Index (HDI)

 4.1.2 International trade and business growth

a) Exports and Imports

b) The link between business specialisation and competitive advantage

c) Foreign direct investment (FDI) and link to business growth

4.1.3 Factors contributing to increased globalisation

a) Reduction of international trade barriers/trade liberalisation

b) Political change

c) Reduced cost of transport and communication

d) Increased significance of global (transnational) companies

e) Increased investment flows (FDI)

f) Migration (within and between economies)

g) Growth of the global labour force

h) Structural change

4.1.4 Protectionism

a) Tariffs

b) Import quotas

c) Other trade barriers:

Government legislation

Domestic subsidies

4.1.5 Trading Blocs

a) Expansion of trading blocs:

EU and the single market

ASEAN

NAFTA

b) Impact on businesses of trading blocs

4.2 Global markets and business expansion

4.2.1 Conditions that prompt trade
a) Push factors:
Saturated markets
Competition
b) Pull factors:
Economies of scale
Risk spreading
c) Possibility of off-shoring and outsourcing
d) Extending the product life-cycle by selling in multiple markets

4.2.2 Assessment of a country as a market
a) Factors consider:
Levels and growth of disposable income
Ease of doing business
Infrastructure
Political stability
Exchange rate

4.2.3 Assessment of a country as a production location
a) Factors to consider:
Costs of production
Skills and availability of labour force
Infrastructure
Location in trade bloc
Government incentives
Ease of doing business
Political stability
Natural resources
Likely return on investment

4.2.4 Reasons for global mergers or joint ventures
a) Spreading risk over a different countries/regions
b) Entering new markets/trade blocs
c) Acquiring national/international brand names/patents
d) Securing resources/supplies
e) Maintaining/increasing global competitiveness

4.2.5 Global competitiveness
a) The impact of movements in exchange rates
b) Competitive advantage through:
Cost competitiveness
Differentiation
c) Skill shortages and their impact on international competitiveness

4.3. Global Marketing

4.3.1 Marketing 
a) Global marketing strategy and global localisation (glocalisation)
b) Different marketing approaches:
Domestic/Ethnocentric
Mixed/Geocentric
International/polycentric
c) Application and adaptation of:
The marketing mix (4Ps) to global markets
Ansoff's Matrix to global markets

4.3.2 Niche Markets
a) Cultural diversity: recognition that groups of people across the globe have different interests and values
b) Features of global niche markets
c) Application and adaptation of the marketing mix (4Ps) to suit global niches

4.3.3 Cultural/Social factors
a) Considerations for businesses:
Cultural differences 
Different tastes
Language
Unintended meanings
Inappropriate/inaccurate translations
Inappropriate branding and promotion

4.4. Global Industries and companies (Multinational corporations) 

4.4.1 The impact of MNCs
a) Impact of MNCs on the local economy:
Local labour, wages, working conditions and job creation
Local businesses
The local community and environment
b) Impact of MNCs on the national economy:
FDI flows
Balance of payments
Technology and skills transfer
Consumers
Business culture
Tax revenues and transfer pricing

4.4.2 Ethics
a) Stakeholder conflicts
b) Pay and working conditions
c) Environmental considerations:
Emissions
Waste disposals
d) Supply chain considerations:
Exploitation of labour
Child Labour
e) Marketing considerations:
Misleading product labelling
Inappropriate promotional activities

4.4.3 Controlling MNCs
a) Factors to consider:
Political influence
Legal control
Pressure groups
Social media