Question 1

Isn't globalisation always a good thing for a successful business?

Accepted Answer

Not necessarily. While globalisation offers opportunities like access to larger markets, it also brings significant threats. These include intense price competition from low-cost international rivals, the risk of becoming uncompetitive if exchange rates move unfavourably, and the complexity of managing global supply chains. For a business that relies on a protected domestic market, globalisation can be a major threat to its survival.

Question 2

If a product is a bestseller in the UK, can't a business just sell it the same way everywhere else?

Accepted Answer

This is a common mistake known as ethnocentrism. Assuming a 'one size fits all' approach ignores crucial differences in culture, religion, income levels, legal regulations, and consumer tastes. For example, a food product may contain ingredients that are not consumed in another country, or a promotional campaign's humour might be offensive elsewhere. Successful international marketing often requires significant adaptation of the product, price, promotion, and distribution.

Question 3

Are tariffs the only way governments can restrict international trade?

Accepted Answer

No, tariffs are just one type of trade barrier. Governments also use non-tariff barriers (NTBs). These include quotas (a physical limit on the quantity of a good that can be imported), subsidies to domestic producers (making them more competitive), and complex administrative or technical regulations (e.g., safety or labelling standards) that are difficult or expensive for foreign firms to meet. These NTBs can be just as effective as tariffs at restricting trade.

International

What you need to know

International