Know and understand how globalisation both helps and hinders development with reference to one case study

from an LEDC or NIC.

The company sells over 400 brands in over 312 countries or territories.

90 billion servings of Coke’s products are consumed each day

A multinational company is

one that operates in

more than one country across

the world.

http://www.flickr.com/photos/lynns/110140674/

Apart from operating in more than one country, multinationals also have a number of other characteristics…

Well-known brands

Huge ProfitsLarge employers

http://www.flickr.com/photo_zoom.gne?id=286819826&size=o

Headquarters mostly in MEDC countries.

Atlanta, Georgia, USA

$24 billion dollars 71,000 people worldwide

An increase in the flow of goods, services, people, capital across national borders in

order to create a more integrated and interdependent world economy.

http://en.wikipedia.org/wiki/Globalization

The term globalisation is contested, a general definition is…

Basically the World is shrinking.

Improved transport means that people and goods can be moved around the world more quickly. Distance between

places hasn’t changed, but the time needed to cover those distances has.

http://www.flickr.com/photos/danoots/165294639/

Improvement in technology, such as the internet, has meant

that capital (money) can be transferred instantly between

locations. People can also use telephones and the internet to communicate more easily in

‘real time’.

http://www.flickr.com/photos/ldandersen/301812211/

Improvements in technology have also lead to the

development of a mass media, television, radio and internet, far off places now seem much closer… we can even see them

in real time.

http://www.flickr.com/photos/skooal/322346446/

These factors have lead to increased interdependence between places… they also seem much closer than they

did.

http://www.flickr.com/photos/anjan58/1281306048/

http://www.flickr.com/photos/blipfish/124908486/

Bottled in 200 countries across the world.

http://www.flickr.com/photos/jamesonroper/400400410/

http://www.flickr.com/photos/33924575@N00/677513608/

Manufacturing your product in

the country you sell it has a

number of advantages.

Labour costs may be lower in some countries, especially LEDC countries.

Low labour costs = higher profits.

http://www.flickr.com/photos/thomasvr/2178131895/

Manufacturing your product in the country it is sold reduces transport

costs.

Less transport = higher profits.

http://www.flickr.com/photos/jungkumseok/2175023880/

Legalisation on working conditions, workers’ rights, health and safety, and the environment may be less strict in

some countries.

Relaxed legalisation = lower overheads= more profit.

http://www.flickr.com/photos/22385378@N02/2171255668/

Some countries may try to encourage multinationals to invest in their country by offering lower tax rates and financial

incentives.

More favourable taxation = lower overheads= more profits.

http://www.flickr.com/photos/dukeofism/2137719782/

Coca-Cola employs people.

Coca-Cola locates in an area

http://www.flickr.com/photos/ikayama/784139355/

Generates income for local suppliers

Employees have greater income.Generates income for local businesses

Employees pay taxes

Increased tax revenues can be spent on the local community.

Process of the positive multiplier effect.

And so on…

And so on…

It widens your market.

More consumers= more profit.

http://www.flickr.com/photos/perverted_introvert/

2197021334/

The status of your brand is raised.

More status = more consumers = more profit

http://www.flickr.com/photos/gunnarfreyr/2196432220/

Producing your product in a country and

adapting to the local market makes it seem

more ‘local’.

More local = more consumers = more

profit.

http://www.flickr.com/photos/liemtran/2184656873/