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Globalisation (Analysis of the impact of globalisation (Domestic market…
Globalisation
Analysis of the impact of globalisation
Domestic market
Positive
Decrease in prices for consumers
Cheaper supplies for business
Outsourcing of labour or production
Expanded market for our products
Brand Australia
Negative
Increase competition
Decrease market share
Job loss or bankruptcy
International cooperation
Tax minimisation
Transfer pricing
Internal pricing charged within multinational companies to reduce tax bill
Tax havens
Countries with secretive tax and financial systems (Singapore, Bermuda, Switzerland) for non-residents and foreign owned companies
Lack of information exchanged between governments and financial institutions to assist international investigations
Lack of transparency in laws related to business transactions which make it hard to track earnings and money
Effects
Hurts small business
Reduces government expenditure
Global spread of skills and technology
Employment levels in developing countries and in developed countries
Benefits of home grown/developed products
Benefit to the local economy through increased employment
Economic growth for Australian economy
Increased brand recognition for high quality Australian made products
Greater sales and profits
Less welfare payment
Increase in income tax for government
Increase in government spending
Factors driving global business development
Financial growth opportunities and loss minimisation
Low risks due to successful and proven marketing strategies can be used confidently
Global awareness that global brand has more visibility than local
Consistency
Standardisation
Achieve economies of scales
Convey a prestige factor
Most valuable asset a company has
Consumer purchasing and spending patterns
Product choice
Smart phone technology
Google play
App Store
Strength of the Australian Dollar
Brand awareness through social media
Secure payment systems
World Trade Organisation (WTO) regulations and sanctions
Aim
To ensure that trade flows as smoothly, predictably and freely as possible
Result in
Economies scales
Financial growth
Expanisation in potential costumers
Less taxes or trade barriers
Spread of risk
Deregulation of the financial market
Definition
The removal of laws and restrictions surrounding finance, investment, banking and the movement of capital
Reason
Greater investment then increase trade
Less in poverty
What happened
Floated Australian Dollars - it could be traded on international market
Devaluation which is good for exporters
Allowed foreign banks to operate in Australia - allow firms to seek investments loans more easily at a cheaper rate
Host country and home government incentives for international trade
Grants
Taxation
Free trade agreements
What is FTA?
A visual part of Australia's continued economic growth
Treaties between two or more countries designed to reduce or eliminate certain barriers to trade and investment
Facilitate stronger trade and commercial ties
Agreement can be
Bilateral which is between two countries
Multilateral which is between many countries
Benefits and challenges to Australian owned businesses as a result of FTAs
Benefits
Encourage productivity and innovation
Greater competition
Fosters free trade and investment flows
Encourages, increases opportunity to expand into new export markets
Expansion of markets
Cheaper supplies for business
Allows exporters greater access to new possible customers
Grows Australian Business and attract investment
Reduce imported input cost
Attract oversea investors to Australian Business
Helps business to grow and more diversity
Challenges
Increase competition for local business
Decrease market share of Australian Business
Results of increased competition
Job losses created in domestic industries as a result of increased competition
Reduced income and profit for Australian business
Damage to environment
Bad public image
Deplorable working conditions
Reduced market share in Australia due to competition
Features and role of free trade agreements
ANZCERTA
Only between Australia and New Zealand
No tariffs between Australia and New Zealand
Harmonisation of food standards
Mutual recognition of skills and qualification
AANZFTA
ASEAN
Association of South East Asian Nations
Laos, Myanmar, Thailand, Vietnam, Cambodia, Malaysia, Singapore, Indonesia, Brunei Darussalam, Philippines
96% reduction in tariffs on most products traded with AANZETA
Guarantees on foreign investment
Governments can't nationalise foreign developments
Accessing supply and transportation through Singapore
The role of e-commerce in a global environment