Globalisation

The first thing that usually comes into our minds when people mention the word "globalisation" is a globe, right?
So, what does globalisation actually mean?
In terms of business, globalisation means "the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology".

As always, there will be benefits and drawbacks.
Benefits of globalisation:

• Choice of goods 

When a country imports goods from other countries, it gives the local consumers a wider choice of goods and services.

• Competition

Globalisation creates competition for the local companies. As a result, price of the products will be decreased.

• Specialisation

Countries begin to specialise in products they are best at making.

• Economic interdependence

Nations build political relations and social relations because of economic interdependence. This helps to improve relations between different countries.

Drawbacks of Globalisation:

• Unemployment in developed countries

Cheap imports from developing countries may lead to unemployment in developed countries where the total costs of production is high. Companies would want to go where the labour is cheaper. 

• Unemployment

Unemployment may happen in sectors which are not prioritised due to specialisation of certain products.

• Competition

Competitiveness in globalisation will lead to failures of the smaller companies. They are obviously less competible compared to large companies.

An example of globalisation is the iPhone 4.

Did you know that different parts of the iPhone 4 are manufactured in different countries?

Below is a diagram of the different components that make up an iPhone 4, their costs and origins.

Interesting, isn't it?

Hope you had fun reading my blog!
That's all for today. See you soon! :)