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globalisation - Coggle Diagram

- - - - goods and services are traded freely across international boarders
        
        there is high level of interdependency
        
        capital can move more freely between countries
        
        there is free movement of labor
        
        the share of technology and intellectual property. across boarders.
- - - - trade opportunities as economy grow, consumption increase, creates opportunity for firms who want to sell goods, employment rise, disposable income rise, overall AD rise, import demand rise, global trade rise
        trade rise, competition rise, price of goods fall, consumer surplus rise, choices increase living standards improve
      - employment patternif a country has high unemployment, then the country is a good location for production (open factory)because people are search for job, but as a market,( exporting to that country) it is bad because not much disposable income to spend.
        developed nations may have saturated market so employment rate must be slow growing. emerging nations will have high employment rate
- - - - 1.to obtain good that cannot be produced domestically
        
        to obtain goods that can be produced
        cheaply from overseas.
        
        to sell off surplus
        
        to improve customer choice
    - - A country can specialize by having efficient production methods than rivals and having access to cheaper labor. specialization leads to increased global output and prosperity. country can gain from international competitiveness> B.O.P improves.
      - businesses can gain competitive advantages through specialization. it increases a firms' dominancy in the market. specialization increases efficiency. > economies of scale> increased profit> international growth/ expansion> gain more knowledge and experience> more market share and brand image
    - - to have tight control over business operation
        
        a firm wants to protect it's intellectual property ( patent
        and copy rights)
        
        it needs to be close to it's customers.
        it's products have high transportation or logistic cost.
        
        it faces trade barriers when exporting.
    - - joint venture this is a collaborative agreement between both parties to invest in a business and share ownership and control.
      - strategic alliances these are colorations created when firms contract to share resources ( often intellectual property) or certain skills ( managerial expertise)
      - cross border mergers and takeovers this involves purchasing of an entire business abroad.
      - greenfield facilities
      - horizontal FDI occurs when a company establishes the same type of business operation in a foreign country as it operates in its home country.
      - vertical FDI occurs when a multinational decides to acquire or build an operation that either fulfills the role of a supplier