3.4 Globalisation / FDI (p59) Year 10 GCSE Economics 3.4 Globalisation / FDI (p59) Objectives: Understand why foreign firms choose to operate in the UK. Understand the consequences for the UK economy when overseas firms relocate. Apply understanding to Kraft takeover of Cadburys

Key terms Foreign Direct Investment (FDI): When a business from one country builds a factory in another.

Reasons why foreign firms locate in the UK Access to highly skilled labour workforce Instant access to EU without trade barriers (500 million + consumers) Access to British brands and distribution networks. Example Cadburys retailers for Kraft. English language accepted international language for business, science and technology.

Problems when foreign firms exit UK market Jobs lost directly in local economy Government lose taxation UK firms that supply the business lose revenue and may make job cuts Government may need to spend money on education and retraining in the region affected.

Example successful FDI in UK:

Create a timeline display of the Kraft takeover of Cadburys Cadbury’s / Kraft case study Create a timeline display of the Kraft takeover of Cadburys Identify the reasons ‘for’ (Kraft’s) decision to takeover Cadburys. Identify the arguments “against” the takeover. Analyse the consequences on at least three different stakeholders of the takeover. Please include actual evidence from the media to support your analysis. Your findings should be reported in a ppt presentation

Web links for research: http://www.ft.com/indepth/cadbury-kraft http://news.bbc.co.uk/2/hi/8467007.stm http://www.marketingweek.co.uk/news/kraft-completes-takeover-of-cadbury/3009469.article http://www.mirror.co.uk/news/top-stories/2010/01/20/we-can-t-sell-out-to-kraft-a-plastic-cheese-company-115875-21980876/ http://www.southwestbusiness.co.uk/news/concern-Kraft-takeover-Cadbury/article-3583350-detail/article.html http://video.ft.com/v/750928659001/Kraft-Cadbury-one-year-on