Explain globalisation and its effects on UK businesses.

Direct answer

Globalisation has increased the variety of inputs available to a small UK manufacturer, often from overseas suppliers. While this can lower unit costs through cheaper raw materials, it also introduces higher shipping and customs costs, and requires investment in technology to manage supply chains. Additionally, the need to meet international quality standards can raise compliance costs. Overall, globalisation creates a more complex cost structure with both cost‑saving opportunities and new expense streams.

How it works

The answer identifies the main cost drivers—input sourcing, logistics, compliance—and explains how each is affected by global market integration, showing cause‑and‑effect relationships.