3.4 Globalisation / Operating Overseas (p58) Year 10 GCSE Economics 3.4 Globalisation / Operating Overseas (p58) Objectives: Understand why UK firms choose to operate overseas. Understand the consequences for UK firms of operating overseas. Apply understanding to Dyson case study

Key terms Labour costs: Costs of employing workers (wages, salaries taxes on labour) and also training and recruitment costs. Foreign Direct Investment (FDI): When a business from one country builds a factory in another.

Benefits of globalisation for UK firms operating in overseas markets Lower operating costs Lower labour costs Increases firms international competitiveness Exchange rates (ER) if ER falls it lowers X prices Firms are nearer to raw materials reducing costs Firms are closer to emerging markets which is beneficial for growth.

Drawbacks of globalisation for firms operating in overseas markets UK jobs lost can create structural unemployment Negative publicity in UK media Possibly increase distribution costs Face competition from domestic firms Exchange rate fluctuations can effect business planning Overcome language cultural barriers

Wipeout Challenge: See Notes View on how to use this game Game objective: The winning team is the one with the highest points! How to play: Using any method you wish (e.g. Drawing straws) to determine which team goes first. This team chooses the first answer that they think is correct (for the question posed at the bottom of the screen. The games master then clicks on the teams answer. If they are correct they will get a ‘star’ symbol. If the team is incorrect they will get the big ‘W’ symbol. If the team are correct they can choose to pick another answer or pass that responsibility to the next team (going clockwise). Scoring: The team scores points based upon the number of correct answers already given – the 1st star on the board brings 10 points, the 2nd brings 20 points and so until 110 points is given for the 11th correct answers. (See guide at the side of the screen) If the team gives an incorrect answer (gets a big ‘W’) then their entire score is ‘wiped’ out. The scoring accumulates between the 3 games but can also be wiped out at any point (teams can not bank points from one game to another. If all 5 incorrect answers are found, then the game ends and the games master can move on to the next game (if there is one!) Editing: To edit answers, click on any individual square and change text. The incorrect answers (wipeouts) are signified by the red crosses (which don’t appear when you run the slide show). Tip: Use the final slide of this presentation to show the accumulated scores. Print off as many of the final slide as you need for the number of teams. Laminate the card (if you can) and then the teams can add or wipe out as required. Operating Overseas 5

Which are the POSITIVES of operating overseas Opportunity for growth in new markets Possible Cultural barriers Possible language barriers Increases number of consumers Values 1 10 2 20 Consumer back lash domestically Reduces wage inflation Increases competitive-ness Reduces effects of economic downturn 3 30 4 40 5 50 Availability of labour Domestic competition Possibly lower corporation tax No NMW therefore lower labour costs 6 60 7 70 8 80 9 90 Closer to suppliers Cheaper property costs May need to invest in training Less Government regulation 10 100 11 110 Which are the POSITIVES of operating overseas Next 6