When should a business enter the global market? (financial growth opportunities and loss minimisation)

if a business is successful domestically, and may reach market saturation and product maturity

the business has low debt, high profits, and cash reserve

the business has a strong financial position domestically

when a business sees an opening in the global market, but is financially insecure

When is the best time for a business to go global? (financial growth opportunities and loss minimisation)

the product or service may have other markets

the product or service may have licensing opportunities or a joint venture

global business may present a platform to expand the business beyond the domestic market

when the value of the Australian dollar is low

By expanding into overseas markets an Australian business can minimise or hedge against financial losses. Give an example of how a business could do this. (financial growth opportunities and loss minimisation)

1. Seasons in the northern and southern hemisphere are opposite.

2. For a business selling seasonal goods it makes financial sense to operate in both hemispheres, at opposite times of the year.

1. Stay in the same market the business was in domestically, but on a global scale.

2. This way the business is unlikely to make financial losses as they are familiar with the market.

Give examples of consumer behaviour factors that contribute to online global business: (consumer purchasing and spending patterns)

access to a greater choice of products

secure and reliable payment systems

continued strength of the Australian dollar

use of social media by both consumers and retailers to drive brand awareness

What does the WTO do? (World Trade Organisation and sanctions)

sets standards for international trade

sets standards for countries participating in Free Trade Ayreements

can force trade agreements on countries if it benefits other countries

What are the rules for Fair Trade Agreements under the WTO that must be followed: (World Trade Organisation and sanctions)

eliminate significantly all discrimination against service suppliers from member countries

eliminate tariffs and other restrictions on all trade in goods between member countries

eliminate taxation on certain goods between member countries

set a limit on the quantity of goods and products that can be traded

What were the benefits of deregulating the financial market? (deregulation of the financial market)

a vast quantity of money now circulates at the international level in currency deals, stock market transactions and trade

this flow of international capital and ongoing deregulation has produced a financial environment that supports global business.

there were no benefits, it caused carnage to the regular flow of money and hugely decreased the value of most currencies.

governments had less control and businesses more freewill to distribute their money into financial gambles

Which of the following statements are true regarding employment in developing countries? (employment levels in developing and developed countries)

in developing countries there is a lack of capital and government support

these developing countries then lack the support they need to grow domestic business and employment

international companies in manufacturing, services, agriculture and mining invest in roads, buildings and technology and create jobs.

employment levels have been growing on their own as businesses have begun sprouting up in developing countries and employing friends and family

Which of the following statements are true regarding employment in developed countries? (employment levels in developing and developed countries)

developed countries have lost jobs because of the use of labour in developing world

they have lost these jobs because of such things as low-cost manufacturing and services.

despite it being difficult to find a manufacturing job in developed countries, it is still easier than finding work in developing countries

How are skills and technology spreading globally at the rate they currently are and why? (global spread of skills and technology)

it is also important to have skilled workers who speak the local language and understand the culture

companies can take advanatage of people with specialised skills in construction, technology and business.

international companies invest in, and encourage governments to, support, train, and educate a supply of skilled local workers.

international companies are the main motivator for this

What is important to note about international marketing? (international cooperation)

it depends upon understanding the culture and norms of other populations

it increases travel and migration and exposure to diversity

people will be offended by marketing that is outside of what they are used to

international marketing is very important for domestic businesses

What are some examples of Free Trade Agreements? (international cooperation)

North American Free Trade Agreement (NAFTA)

Association of South East Asian Nations' (ASEAN)

European Free Trade Association (EFTA)

Australia and Uruguay Free Trade Association (AUFTA)

Why is it increasingly hard for domestic markets such as Australia to stay ahead of the domestic markets of China, for example? (domestic market)

domestic markets compete not only with each other but also with imported goods

online shopping and secure online payment systems give consumers access to businesses from around the world

China imports far more goods and services and therefore has a higher GDP.

What impacts on domestic businesses? (domestic market)

trends of another domestic market

If an Australian business exports goods to other countries, they will be affected by changes in exchange rates, prices and demands overseas. Which of the following statements are true? (domestic market)

if prices or demand is high the Australian business will earn more income.

If prices or demand falls, the Australian business will reduce their income.

If they reduce their income, this may lead to job losses and cost-cutting.

What do tax havens result in? (tax minimisation)

less taxes paid to the government where the business is operating

a large cut of the profits to the tax haven

a heavy fine if a company is found to be using one

zero percent tax rates for the business

What is transfer pricing? (tax minimisation)

It is where one part of a multinational company sells products and services to another part of the company in a different country.

Both businesses are owned by the same company so the terms of the transaction can be manipulated to avoid tax, tariff and duty payment obligations.

The prices changed can manipulate profits and the amount of tax they have to pay.

For example, a company may own a range of businesses. One business sells wood to another business to make paper.

The Impacts and Causes of Globalisation Quiz

47 questions

Show all answers

1.

MULTIPLE SELECT QUESTION

45 sec • 1 pt

What are the factors that drive global business development?

Financial growth opportunities and/or loss minimisation

Global spread of skills and technology

Consumer purchasing or spending patterns

World Trade Organisation and sanctions

Deregulation of the financial market

2.

MULTIPLE SELECT QUESTION

45 sec • 1 pt

What are the factors that impact globalisation?

Tax minimisation - tax havens and transfer pricing

Global spread of skills and technology

Employment levels in developing and developed countries

International cooperation

Domestic market

3.

FILL IN THE BLANKS QUESTION

1 min • 1 pt

(a) want to encourage domestic businesses to expand overseas because it results in a flow of profits back into the domestic economy.

4.

MULTIPLE SELECT QUESTION

45 sec • 1 pt

Businesses consider global growth because of:

higher profits and market access in global markets

reduced technological barriers to movement of goods, services and factors of production

countries with low production and labour costs

extending product life cycles by marketing in other countries

lack of success in their domestic market

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Financial growth opportunities and/or loss minimisation is:

an impact of globalisation

a factor driving globalisation

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Consumer purchasing and spending patterns is:

an impact of globalisation

a factor driving globalisation

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

World Trade Organisation (WTO) and sanctions is:

an impact of globalisation

a factor driving globalisation

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The Impacts and Causes of Globalisation

What are the factors that drive global business development?

What are the factors that impact globalisation?

(a) want to encourage domestic businesses to expand overseas because it results in a flow of profits back into the domestic economy.

Businesses consider global growth because of:

Financial growth opportunities and/or loss minimisation is:

Consumer purchasing and spending patterns is:

World Trade Organisation (WTO) and sanctions is:

Deregulation of the financial market is:

Employment levels in developing and developed countries is:

Global spread of skills and technology is:

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