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Block 2: Reading 1, 2 - Coggle Diagram
Block 2: Reading 1, 2
Globalisations "its a not so small world"
Offshoring - tends to be due to lower labour costs, but not always considered that of the other costs which add up - so can be short term
Nearshoring = bringing key supplies and supply chain tasks closer to home. fastest globalisation trend
technology is one reason globalisation is easier today, but in 1950's it was the start of shipping containers, that started to make globalisation an easier process
Shipping containers - why it can work out cheaply to offshore since the cost of transport and logistics make it easy and cost effective
every country has different practises for globalisation - customers needs, distrubeters expectations for delivery, selection and pick up vary
Need to consider (when making site selection overseas)
own/lease, whats the strategy?
flexibiliy
timescales, routes/disctrubition is this pre set up?
location
relationship with ustoms
local supply base
Friendly nations
Develop global vision
Low cost sometimes means poor service
Living in a somewhat flat world
Reading 2: Competing in a global trade environment
Understanding the global trade environment
Manual Castells "explained that a global economy is "an economy with the capacity to work as a unit in real time on a planetary scale"
glbal economy has changed in modern times due to ict etc
WTO - deals with the rules on international trade between nations - ensuring it frees smoothly, predictably and freely as possible
Competition and trade among countries
Comparative advantage
absolute comparative advantage
Developed by Adam Smith "if a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some of the produce of our own industry, employed in a way in which we have some advantage"
relative comparative advantage
Developed by David Ricardo: "based on assumption that a country will need to specialise in production....depends on restrictions of the country and how much price difference it would be, eg Britain cant produce wine but could make clothes"
Figure 2 pg 15 - The diamond Model (porter)
countries characterised by dfferences in national values, cultures economic structures, institutions and histories (all contribute to competitive success)
Competitiveness not only depends on availability and quality of factor conditions but also
demand conditions in the country for tat specific industry
the strategies, structure and rivalry of firms within the industry
the quality related and supporting industries and infrastructures
Comptetitive advantage
factor conditions (ie natural resources)
the demand conditons in the country for that specific industry
the strategies, structure and rivalry of firms within the industry
the quality of related and supporting industies and infastrucures
government is very influencial of the four factors
Competition among business organisations
"competition is not only occurring among countries. Business organisations also need to carefully identify their competitors and the nature of the competitions existing in the global trade environment, meeting customer needs and expectations is indeed not enough if competitors can do it better. One useful way of analysing the nature of the competition is porters "five forces model"
Figure 3. The five forces of competition (porter) pg 17
Direct industry competitors
suppliers
buyers
potential entrants
substitute goods and/or services
Reading 1: Viewpoint - English is dead, long live "glocalisation"
Cultural cannibalism
glocalisation
diferent age ranges approach reading online differently
Global players
Brands are tailoring their websites to suit different countries/cultures
Online
3.4 Offhsoring & Onshoring
Domestic Souricing
Reactive international sourcing
proactive international sourcing
global sourcing networks