Understand the issues relating to Globalisation and the environment

Able to explain what globalisation is andcan give examples of global business activities

Know the advantages/disadvantages of Globalisation for the UK

Globalisation Is when business activities in different countries become more and more connected to each other.

This can affect the production of goods, manufacture or services

Most mass produced cars made in the UK are produced by foreign owned multi national companies. – Toyotas made in Derby, Nissans – Sunderland, Hondas – Swindon, Jaguars in Speke. The cars are assembled from parts made in different countries. – Tyres from Italy, engines from Japan, body parts from Mexico.

The trend for setting up customer service operations to India started in the 90’s – call centre intensive companies lured by

40% cost cuts.

Apple design products such as IPOD but then–outsource their products to Asustek- a company in Taiwan

Most mobile phones are made by Flextronics – a company in Hong Kong or Selectron. (employ 70,000 people MNC produce electric goods in 23 countries)

International Trade Produce goods in one country and sell to another country

Production abroad Where firms set up their own factories and offices abroad

Outsourcing abroad A firm may pay another business to produce goods/services for it.

Multinational Corporations (MNCs)

Where a company has several plants in different countries of the world - Selectron

Global branding World wide brand name and sold – coca cola /McDonalds.

People movement Workers move to work abroad.

Globalisation

Globalisation in developing countriesThe Good

Culture – changing as branding, advertising and production methods are influencing ways

of life.

Jobs – living standards are being created – multinational companies pay much more than local firms - living standards much better and

people living longer.

Codes of conduct are being drawn upUse of technology- expanding-

communication is cheaper and faster

Globalisation in developing countries

The badExploitation – Low wages, long hours,

dangerous conditionsCodes of conduct can be overlooked

http://www.youtube.com/watch?v=yF8jUDzz5bE

http://www.youtube.com/watch?v=C25gMQ2Zj3k

The environment and Ethical issues

• Carbon emissions from aircraft

• Disposal of toxic waste• Impact on local landscape• Great amount of

transport• Factories emissions• Controls on pollution not

as strict in developing countries

• Firm closures – effect social costs on humans – standard of living.

http://articles.informer.com/why_does_apple_employ_the_chinese.htmlApple employ chinese?

Radiator capshttp://www.youtube.com/watch?v=du3L2ORpdzw

be

Choice - we are now able to have goods Produced abroad

Lower prices – due to goods and Labour cheaper – global competition keepsprices low.

Benefits

be

Lower profits – have to cut prices due to Competition abroad.

Lower sales –due to competition from foreignFirmsClosure and loss of jobs –UK may not need To employ workers

Problems

Try to explain the ethical issues relating toGlobalisation and the possibleContamination to the environment

Discuss the issues relating to Globalisation

Include the advantages/disadvantage of Globalisation for businesses in the UK

Section 1 Introduction

• history of Chloe Seaton – business failure due to poor cash flow (possible question on cash flow)

• Uk – recession • Unemployment• VAT up to 20%• World food prices rising - • Population in Bowton falling

Know and Understand where you lost marks

Know how to improve your answers

Understand celebrity endorsement and how it can impact on sales.

By the second half of 2013 BSB were receiving large orders. One ChristmasOrder was for 50 000 pouches of spice blends.

Able to identify WHICH Economies of scale are Being achieved SO FAR at BSB

Able to work out the differences in the totalrevenue -

Start to analyse and explain who BSB spice blends are being sold to.

EXTENSTION TASK – Go through section 4 andMake notes on production methods/JIT ext –

Think about the production processes – whichDo you think BSB are using? Explain yourAnswer.

• Three supermarket chains Tesco/Asda/Aldi/Waitrose/Sainsburys/Morrisons/Lidl

• Several large and prestigious retailers http://www.selfridges.com/en/Food-Wine/Categories/Shop-Food/Spices-marinades/?llc=dn

http://www.johnlewis.com/search/biscuits-and-crackers?_requestid=223981

www.houseoffraser.co.uk/Hampers+Gift+Boxes/5122,default,sc.html&redirectQuery=food

http://www.harrods.com/food-and-wine/seasonings

BSB spice bends are sold to

• a number of wholesalers who deal with smaller, specialist stores

http://www.thespiceshop.co.uk/http://www.telegraph.co.uk/sponsored/in-the-know/london-shopping/9469801/london-herb-spice-stores.html

Consumers all over the world via the internet

http://www.spicesofindia.co.uk/?kw=spices%20online&fl=662723&ci=21201920888&network=s&pm=&gclid=CKLJ2_qnur0CFSMOwwod1KMAvA

http://www.thespiceisright.co.uk

Specific retailers, packaged and labelled as their own brands

http://www.youtube.com/watch?v=ZGt0YvZD-8A

Internal Economies of ScaleTypesThis is when a firms unit of cost of production falls as the output and scale of operation increasesTechnical economies Larger firms can afford research &

development costs and buy sophisticated equipment

Managerial economies Employ specialist managers to improve efficiency

Financial - economies Larger firms are more stable financially – easier to negotiate lower interest on loans

Risk –bearing economies As firms grow – more product range – diversification spreads risk over more markets

Purchasing economies Larger firms can have discounts from buying in bulk

Marketing economies Larger firms are able to buy services for specialist advertising agencies – more types of promotion.

Sales Revenue

Number of goods sold x price = Sales Revenue

10 x £25 = £250

You will probably be asked to work out the increase in Revenue from 2012 to 2013

£1 900 000 - £600 000 =

2 easy marks

£1 300 000

You will also be asked to work out the increase in percentage or the decrease in percentage from 2012 to 2013

To calculate percentage decrease:First: work out the difference (decrease) between the two numbers you are comparing.Decrease = Original Number - New NumberThen: divide the decrease by the original number and multiply the answer by 100.% Decrease = Decrease ÷ Original Number × 100If your answer is a negative number then this is a percentage increase.

To calculate the percentage increase:First: work out the difference (increase) between the two numbers you are comparing.Increase = New Number - Original NumberThen: divide the increase by the original number and multiply the answer by 100.% increase = Increase ÷ Original Number × 100.If your answer is a negative number then this is a percentage decrease.

Percentage increase of

other blends

increase35% to 38% = 38-35= 3 /35 x 100 = 8.57 – 8.6% increase in revenue

decrease of Punjabi masala from 10 to 8 so 8-10 =-2 / 10 x 100 = 20% decrease in revenue

Other blends 8.6% INCREASEKorma 12-/15= -3/15 x 100 = 20% DECREASETunisian Tabil 6-5=1= 16.6 INCREASECajun 10-9=1/10 = 11.1% INCREASECreole – no changePunjabi Masala 8-10=-2/10X100 =20% DECREASEVindaloo 13-14=-1/14 x100 = 7.1 DECREASEBahar 7-6=1/7 x 100 =16.7% INCREASE

“BSB now produces a range of spice blends. It is noted particularly for its distinctive blends which are sold under the BSB brand. The spices are roasted, blended and packaged in the factory. The spices are packaged either in heat-sealed foil pouches or in glass bottles. The pouches and bottles are bought in bulk by BSB and labels are attached to them to identify the brand and the spice blend.”

What type of production method (s) do you think BSB use?