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CHAPTER 29 (Multination (Examples (Abbott: India, Indonesia, Vietnam,..,…
CHAPTER 29
Multination
are those with factories, production or service operation in
more than one country
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Advantages:
Jobs are created, reduce the level of unemployment
Increase investment, export and customer choice
Disadvantages
Create only unskilled jobs, Profit flow out of country
Existing firms in danger, Influence the government and economy
Examples
Abbott: India, Indonesia, Vietnam,..
Pepsi: Canada, Japan, Mexico,..
Microsoft: Canada, Vietnam, Ecuador,...
Coca&Cola: Vietnam, Mexico, Germany,...
Nestle: Vietnam, China, Switzerland,..
GLOBALISATION
is used to describe increase in worldwide trade, movement of people and capital between countries
Benefits:
- Start selling exports to other countries ( opening up foreign markets)
- Open factories in other countries ( could be cheaper to make goods in other countries)
- Import components from other countries ( could be cheaper to purchase these supplies from outside country)
Threats:
- Employees leave business because they cannot pay the same
or more than other international business
- To set up operations, multinations will increase investment (create further competition)
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Examples
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Quotas: Organization of Petroleum Exporting Countries sets a production quota for crude oil in order to "maintain" the price of crude oil in world markets