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Chapter 9: Globalisation- made by Khôi (Multinational businesses:…
Chapter 9: Globalisation- made by Khôi
Globalisation
Description: the increasing of world wide trade, investment between countries
Potential:
start selling exports- increase potential sales
open factories in other countries- it could be cheaper than out their home country
import materials and components from other countries- the materials or components could be cheaper in other nations
threats:
increase imports into home market- sales of domestic market could decline because import goods or service might be better
outstanding employees might leave and join international business- in some profession, employees will have more choice to choose
increasing investment from multinationals in home country- which will create further competition
Free trade agreement (FTA):
Description: an agreement to let countries to trade, export and import without barriers such as quotas or tariffs
Examples:
ASEAN
NAFTA
SAFTA
EU- Canada free trade agreement
Why government would want to introduce tariffs and import quota
To protect domestic businesses(protectionism), because international businesses could make products or services much more cheaper than domestic businesses which could make them to shut down
Example of tariffs:
put tax on imported products
Example of quota:
restrict the quantity of the that is imported
Multinational businesses:
Description: businesses that produce and sell goods or services in more than a country
why become one???
usually are large businesses such as cars, oil, etc. and produce and sell goods in other countries could increase profit and many choices for customers in many countries
Examples:
Toyota- also operates in USA, Japan, Canada, etc
Acecook- USA, Japan, Korea, Phillippine, China, etc.
Nissan- USA, Japan, Philippine, Indonesia, etc.
Samsung- USA, Korea, China, Canada,etc.
Honda: Japan, China, Korea, etc.
Benefits:
produce in countries with low cost
Produce goods in nearer market to reduce transport cost
Disadvantages:
If fail then there will be a high cost
The tariff in a certain country could be very high