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    Globalisation 2

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    wengiemotshegwe
    Globalization has led to increased worldwide competition between businesses. As trade barriers fall with formations like the SADC and SACU, businesses face more foreign competition and less government protections. Changing exchange rates also impact businesses, with currency appreciation buying more and depreciation buying less of other currencies. While free trade increases market share and access to cheaper imported goods, it also brings disadvantages like competition and potential job losses from imports.

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    Globalisation 2

    Uploaded by

    wengiemotshegwe
    8 views11 pages
    Globalization has led to increased worldwide competition between businesses. As trade barriers fall with formations like the SADC and SACU, businesses face more foreign competition and less government protections. Changing exchange rates also impact businesses, with currency appreciation buying more and depreciation buying less of other currencies. While free trade increases market share and access to cheaper imported goods, it also brings disadvantages like competition and potential job losses from imports.

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    GLOBALISATION 2

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    Globalization has led to increased worldwide competition between businesses. As trade barriers fall with formations like the SADC and SACU, businesses face more foreign competition and less government protections. Changing exchange rates also impact businesses, with currency appreciation buying more and depreciation buying less of other currencies. While free trade increases market share and access to cheaper imported goods, it also brings disadvantages like competition and potential job losses from imports.

    Copyright:

    © All Rights Reserved
    Download as ODP, PDF, TXT or read online from Scribd
    Download as odp, pdf, or txt
    8 views11 pages

    Globalisation 2

    Uploaded by

    wengiemotshegwe
    Globalization has led to increased worldwide competition between businesses. As trade barriers fall with formations like the SADC and SACU, businesses face more foreign competition and less government protections. Changing exchange rates also impact businesses, with currency appreciation buying more and depreciation buying less of other currencies. While free trade increases market share and access to cheaper imported goods, it also brings disadvantages like competition and potential job losses from imports.

    Copyright:

    © All Rights Reserved
    Download as ODP, PDF, TXT or read online from Scribd
    Download as odp, pdf, or txt
    of 11

    GLOBALISATION

    The increase in worldwide competition between business.


    HOW BUSINESSES ARE AFFECTED BY
    INTERNATIONAL COMMUNITY
    • More competition from foreign firms- as the are many businesses from
    other countries that will be providing the same service or the same
    product. Hence, less customers that will buy the product leading to
    less sales.
    • No government protection- as the government cannot provide loans,
    tax credits and tax deductions. Hence they can be strained by higher
    currencies
    •
    EXCHANGE RATE
    • The price of one currency in terms of another.
    HOW BUSINESS CAN BE AFFECTED BY
    CHANGING EXCHANGE RATE
    • APPRECIATION-it occurs when the value of a currency arises. It
    buys more of another currency than before.
    •
    • DEPRECIATION-it occurs when the value of a currency falls. It buys
    less of another currency that before.
    CURRENT EXCHANGE RATE
    BARRIERS TO TRADE
    • LANGUAGE- different countries uses different languages some of
    which being a business owner, one might not be aware of them. This
    leads to difficulty to trade amongst the customers and producers.
    • Different currencies- when one sells at a different country the
    currencies might be higher than the other which makes it expensive
    for the business. Hence high sales
    • Strict laws- a country might set legal price limits on products to
    protect customers. Hence lower prices leads to lower profits made by
    the business.
    FORMATION OF FREE TRADE
    ASSOCIATIONS
    • This is reducing barriers and limits on international trade.
    • E.g. SADC, SACU
    • They even share or use sea ports for free
    •
    ADVANTAGES OF FREE TRADE
    • Increases market share- as there are many people who can buy the
    products
    • Easy to export-as there are no barriers and no charges when selling
    goods btwn countries.
    • Cheaper goods- as there are low or no charge when exporting goods
    DISADVANTAGES OF FREE TRADE
    • Competition from imported foreign goods- as better goods may be
    imported into the country leading to low demand.
    • Leads to loss of jobs-
    ADVANTAGES OFGLOBALISATION
    • Cheaper goods- as there is higher competition, businesses reduce
    prices to increase customers willing to buy the goods.
    • Large market share- there are many people to buy the goods than just
    within the countries.
    • Easy access to raw materials- as a business can acquire the raw
    materials from other countries
    • High quality goods produced- due to profit motive of the businesses,
    quality is ensured so as to meet consumer needs and satisfaction.
    •
    DISADVANTAGES
    • Loss of skilled manpower-
    • may increase dumping of poor quality goods to less developed
    countries- as they want to make profit, they will produce more goods
    compromising the quality and then send it to under developed
    countries to maximise profits. Hence minimum satisfaction of
    customers from the under developed countries.
    • Increased competition- as there are many businesses that sell the same
    product from different countries some of which are developed and
    they will produce goods of better quality. Hence low sales of the
    goods.

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