Understand the issues relating to Globalisation and the environment Able to explain what globalisation is and can give examples of global business activities Know the advantages/disadvantages of Globalisation for the UK

Globalisation Is when business activities in different countries become more and more connected to each other. This can affect the production of goods, manufacture or services

Most mass produced cars made in the UK are produced by foreign owned multi national companies. – Toyotas made in Derby, Nissans – Sunderland, Hondas – Swindon, Jaguars in Speke. The cars are assembled from parts made in different countries. – Tyres from Italy, engines from Japan, body parts from Mexico.

The trend for setting up customer service operations to India started in the 90’s – call centre intensive companies lured by 40% cost cuts.

Apple design products such as IPOD but then–outsource their products to Asustek- a company in Taiwan

Most mobile phones are made by Flextronics – a company in Hong Kong or Selectron. (employ 70,000 people MNC produce electric goods in 23 countries)

International Trade Produce goods in one country and sell to another country Production abroad Where firms set up their own factories and offices abroad Outsourcing abroad A firm may pay another business to produce goods/services for it. Multinational Corporations (MNCs) Where a company has several plants in different countries of the world - Selectron Global branding World wide brand name and sold – coca cola /McDonalds. People movement Workers move to work abroad. Globalisation

Globalisation in developing countries The Good Culture – changing as branding, advertising and production methods are influencing ways of life. Jobs – living standards are being created – multinational companies pay much more than local firms - living standards much better and people living longer. Codes of conduct are being drawn up Use of technology- expanding- communication is cheaper and faster

Globalisation in developing countries The bad Exploitation – Low wages, long hours, dangerous conditions Codes of conduct can be overlooked

The environment and Ethical issues Carbon emissions from aircraft Disposal of toxic waste Impact on local landscape Great amount of transport Factories emissions Controls on pollution not as strict in developing countries Firm closures – effect social costs on humans – standard of living.

employ_the_chinese.html Apple employ chinese? Radiator caps

be Choice - we are now able to have goods Produced abroad Lower prices – due to goods and Labour cheaper – global competition keeps prices low. Benefits

be Lower profits – have to cut prices due to Competition abroad. Lower sales –due to competition from foreign Firms Closure and loss of jobs –UK may not need To employ workers Problems

Try to explain the ethical issues relating to Globalisation and the possible Contamination to the environment Discuss the issues relating to Globalisation Include the advantages/disadvantage of Globalisation for businesses in the UK

Section 1 Introduction history of Chloe Seaton – business failure due to poor cash flow (possible question on cash flow) Uk – recession Unemployment VAT up to 20% World food prices rising - Population in Bowton falling

Know and Understand where you lost marks Know how to improve your answers

Understand celebrity endorsement and how it can impact on sales. By the second half of 2013 BSB were receiving large orders. One Christmas Order was for pouches of spice blends.

Able to identify WHICH Economies of scale areEconomies of scale Being achieved SO FAR at BSB Able to work out the differences in the total revenue - Start to analyse and explain who BSB spice blends are being sold to.

EXTENSTION TASK – Go through section 4 and Make notes on production methods/JIT ext – Think about the production processes – which Do you think BSB are using? Explain your Answer.

Three supermarket chains Tesco/Asda/Aldi/Waitrose/Sainsburys/Morrisons/Lidl Several large and prestigious retailers Wine/Categories/Shop-Food/Spices-marinades/?llc=dnhttp:// Wine/Categories/Shop-Food/Spices-marinades/?llc=dn crackers?_requestid= t,sc.html&redirectQuery=food BSB spice bends are sold to

a number of wholesalers who deal with smaller, specialist stores know/london-shopping/ /london-herb- spice-stores.html

Consumers all over the world via the internet &network=s&pm=&gclid=CKLJ2_qnur0CFSMOwwod1KMAvA

Specific retailers, packaged and labelled as their own brands

Internal Economies of Scale Types This is when a firms unit of cost of production falls as the output and scale of operation increases Technical economiesLarger firms can afford research & development costs and buy sophisticated equipment Managerial economiesEmploy specialist managers to improve efficiency Financial - economiesLarger firms are more stable financially – easier to negotiate lower interest on loans Risk –bearing economiesAs firms grow – more product range – diversification spreads risk over more markets Purchasing economiesLarger firms can have discounts from buying in bulk Marketing economiesLarger firms are able to buy services for specialist advertising agencies – more types of promotion.

Sales Revenue Number of goods sold x price = Sales Revenue 10 x £25 = £250

You will probably be asked to work out the increase in Revenue from 2012 to 2013 £ £ = 2 easy marks £

You will also be asked to work out the increase in percentage or the decrease in percentage from 2012 to 2013

To calculate percentage decrease: First: work out the difference (decrease) between the two numbers you are comparing. Decrease = Original Number - New Number Then: divide the decrease by the original number and multiply the answer by 100. % Decrease = Decrease ÷ Original Number × 100 If your answer is a negative number then this is a percentage increase. To calculate the percentage increase: First: work out the difference (increase) between the two numbers you are comparing. Increase = New Number - Original Number Then: divide the increase by the original number and multiply the answer by 100. % increase = Increase ÷ Original Number × 100. If your answer is a negative number then this is a percentage decrease.

Percentage increase of other blends increase 35% to 38% = 38-35= 3 /35 x 100 = 8.57 – 8.6% increase in revenue decrease of Punjabi masala from 10 to 8 so 8-10 =-2 / 10 x 100 = 20% decrease in revenue

Other blends 8.6% INCREASE Korma 12-/15= -3/15 x 100 = 20% DECREASE Tunisian Tabil 6-5=1= 16.6 INCREASE Cajun 10-9=1/10 = 11.1% INCREASE Creole – no change Punjabi Masala 8-10=-2/10X100 =20% DECREASE Vindaloo 13-14=-1/14 x100 = 7.1 DECREASE Bahar 7-6=1/7 x 100 =16.7% INCREASE

“BSB now produces a range of spice blends. It is noted particularly for its distinctive blends which are sold under the BSB brand. The spices are roasted, blended and packaged in the factory. The spices are packaged either in heat-sealed foil pouches or in glass bottles. The pouches and bottles are bought in bulk by BSB and labels are attached to them to identify the brand and the spice blend.” What type of production method (s) do you think BSB use?