Influences on business Study Guide

Globalisation is the process by which businesses or other organisations develop international influence or start operating on an international scale. For businesses, this means expanding their operations, sales, and supply chains across national borders. Several factors contribute to globalisation, such as advancements in technology (especially communication and transportation), reduced trade barriers through international agreements, and the increasing interconnectedness of global financial markets. Globalisation affects businesses in various ways, creating both opportunities and threats. Opportunities include access to larger markets, lower production costs by utilising cheaper labour or resources abroad, and the ability to source a wider range of components. Threats can involve increased competition from international firms, exposure to economic and political instability in other countries, potential exploitation of workers in developing countries, and difficulties in understanding and adapting to diverse cultural and legal environments. Businesses must carefully evaluate these aspects when considering global expansion, often needing to adapt their products, marketing, and operational strategies to suit different international markets. This includes understanding the specific needs and preferences of consumers in various parts of the world, as well as navigating complex international regulations and tariffs.