Business and globalisation - AQAChanging business locations and multinationals
In business, globalisation means operating on an international scale to provide or produce goods and services. Almost all of the goods we use are made of parts sourced from around the world.
As businesses grow and increase the scale of their operations, operating overseas in several countries becomes a real possibility. For example, for a food takeaway business, this could mean opening outlets in other countries in order to access new markets of customers. Alternatively, for an online business, this could mean developing a website in a foreign language and opening distribution centres in a foreign country.
There are a number of advantages and disadvantages to a business increasing the scale of its operations:
Advantages
Disadvantages
Access to more customers
Increased responsibility
Potential for more sales and profit
More risk
Potential to grow product range
Potential for failure
Increased brand awareness
Advantages
Access to more customers
Disadvantages
Increased responsibility
Advantages
Potential for more sales and profit
Disadvantages
More risk
Advantages
Potential to grow product range
Disadvantages
Potential for failure
Advantages
Increased brand awareness
Disadvantages
Multinational companies (MNCs)
The ultimate goal for a growing business that wants to increase the scale of its operations is to compete abroad. Multinational companies or MNCs (also known as transnational corporations or TNCs) are companies that operate in a number of countries around the world.
Some of the biggest retail, technology, food, coffee and soft drinks brands operate in many different countries. These companies often adapt their products to suit consumers in the different countries while keeping their brand image recognisable around the world. For example, a fast food chain might sell beef burgers in the UK or the USA but develop a spicy taco to sell in Mexico. This is often also known as ‘glocalisation’.
