Globalisation (Junior Cert Business Studies): Revision Notes
Globalisation
What is globalisation?
In the past, people mainly bought and used products made locally in their own country or town. Today, this has completely changed - we can easily purchase goods from anywhere in the world right here in Ireland. This shift happened because of globalisation.
Globalisation is the process by which countries around the world exchange goods, services and ideas with each other.
Several key factors have made globalisation possible:
- Technology advances - Email, instant messaging and video calls allow buyers and sellers to communicate instantly, regardless of location
- Better transport systems - Goods can now be moved further, faster and more affordably than ever before
- Government agreements - Countries have reduced taxes and import costs to encourage trade. The World Trade Organisation (WTO) helps regulate international trade
Global business
Globalisation has made it much easier for businesses to expand their operations across multiple countries. When a company operates in many different nations, it becomes a global business.
A global business is a company that operates in many countries around the world.
Example: McDonald's Global Expansion
McDonald's is a perfect example - this American fast-food chain now has restaurants in 119 countries worldwide. When global businesses enter new markets, they often influence local culture, affecting how people dress, the music they enjoy, films they watch, and food they eat.
Consider how KFC introduced American-style fast food to Asian consumers, fundamentally changing dining habits in China where it now operates over 4,500 outlets.
Globalisation and the consumer
Globalisation significantly impacts how we shop and what we buy. Here's how it affects consumers:
- Greater choice - We can access products from all over the world
- Easy availability - Global products are readily available in local shops and online
- Lower prices - International products are often cheaper than locally-made alternatives, encouraging us to purchase them
- Advertising influence - Global companies spend enormous amounts on marketing to make their products familiar to us
- Cultural influence - Exposure to different cultures affects our purchasing decisions and lifestyle choices
For example, Irish consumers can now easily buy Japanese electronics, Italian fashion, or American software without leaving their local shopping centre.
Benefits of globalisation
Globalisation brings several advantages:
- Wider consumer choice - Access to diverse goods and services at competitive prices
- Cultural exchange - Opportunity to experience new ideas and cultures, such as enjoying sushi restaurants that introduce Irish people to Japanese cuisine
- Economic benefits - Global businesses contribute taxes to governments and improve commercial areas where they operate
- Job creation - International companies provide employment opportunities. For instance, Apple employs approximately 6,000 people in Ireland
- Business expansion - Irish companies gain access to larger international markets, potentially increasing their profits
Risks of globalisation
However, globalisation also presents challenges:
- Environmental damage - Transporting goods over long distances creates pollution and contributes to climate change
- Loss of local identity - Towns and cities lose their unique character as global chains dominate high streets. Ireland now has the highest concentration of Starbucks coffee shops in Europe
- Corporate power - Some large international companies may abuse their influence and show little loyalty to the countries where they operate
- Economic inequality - Wealthy countries may become richer while less developed nations are exploited for cheap raw materials and labour
- Competition challenges - Local Irish businesses may struggle to compete against powerful global corporations with greater resources
Example: Impact on Local Irish Businesses
When international retail chains open in Irish towns, they might force local independent shops to close due to their inability to match the pricing and marketing power of these global competitors.
Key Points to Remember:
- Globalisation is the worldwide exchange of goods, services and ideas between countries
- Global businesses operate in multiple countries and can influence local cultures
- Consumers benefit from greater choice and lower prices but may face environmental and cultural costs
- Globalisation creates jobs and business opportunities but can also lead to inequality and unfair competition
- Ireland is both positively and negatively affected by globalisation - from job creation by companies like Apple to the dominance of chains like Starbucks