Pearson Edexcel · GCSE · Business
Course version: 1BS0 · Version from Sept 2017
The impact of globalisation on businesses: ● imports: competition from…
Full specification wording
Business and globalisation: The impact of globalisation on businesses: ● imports: competition from overseas, buying from overseas ● exports: selling to overseas markets ● changing business locations ● multinationals.
Globalisation integrates global economies, profoundly impacting businesses.
Checked against the Pearson Edexcel 1BS0 specification (opens in a new tab) on .
- Point 1 of 3
- 4 key terms
Study notes
From the checked teaching notes for this specification point.
The idea
Globalisation integrates global economies, profoundly impacting businesses. Imports increase domestic competition as overseas firms enter the market, but also allow businesses to buy cheaper or higher-quality raw materials from abroad. Exports offer opportunities to sell to overseas markets, increasing potential sales and extending product life cycles. Businesses may change locations, moving manufacturing to countries with lower labour costs to improve profit margins. Finally, globalisation enables the rise of multinationals—companies operating in multiple countries—which benefit from economies of scale but face complex logistical and cultural challenges.
For example: A UK clothing brand might buy cotton from India, manufacture in Bangladesh, and sell finished garments in Europe.
What earns the marks
- Globalisation increases competition from overseas imports, forcing domestic businesses to lower prices or improve quality.
- Buying raw materials or components from overseas can reduce production costs and improve profit margins.
- Selling to overseas markets (exports) allows businesses to access larger customer bases and increase revenue.
- Changing business locations to countries with lower labour or property costs can significantly reduce fixed and variable costs.
- Multinationals benefit from global brand recognition and economies of scale but must adapt to local laws and consumer preferences.
Common mistakes and how to put them right
Confusing imports and exports from the perspective of the UK business.
Put it right: Imports are goods brought into the UK (buying), exports are goods sent out (selling).
Assuming globalisation only benefits large businesses.
Put it right: Small businesses also benefit by accessing cheaper overseas suppliers or selling globally via e-commerce.
Stating that changing location only involves moving factories.
Put it right: Businesses also relocate services, such as call centres or IT support, to reduce operational costs.
Exam tips
- When evaluating the impact of globalisation, always consider both the opportunities (e.g. new markets) and the threats (e.g. increased competition).
- Use the context of the business in the case study to decide if changing location is realistic or beneficial for them.
- Link the concept of multinationals to economies of scale to demonstrate a deeper understanding of why businesses expand globally.
Try the lesson
The start of the Business and globalisation: The impact of globalisation on businesses: ● imports: competition from overseas, buying from overseas ● exports: selling to overseas markets ● changing business locations ● multinationals. lesson, made from checked teaching notes for this specification point.
Have a go first
What is a likely impact of globalisation on a domestic business?
Listen
Globalisation integrates global economies, profoundly impacting businesses. Imports increase domestic competition as overseas firms enter the market, but also allow businesses to buy cheaper or higher-quality raw materials from abroad. Exports offer opportunities to sell to overseas markets, increasing potential sales and extending product life cycles. Businesses may change locations, moving manufacturing to countries with lower labour costs to improve profit margins. Finally, globalisation enables the rise of multinationals—companies operating in multiple countries—which benefit from economies of scale but face complex logistical and cultural challenges. For example, a UK clothing brand might buy cotton from India, manufacture in Bangladesh, and sell finished garments in Europe. A strong answer earns marks for these points. Globalisation increases competition from overseas imports, forcing domestic businesses to lower prices or improve quality. Buying raw materials or components from overseas can reduce production costs and improve profit margins. Selling to overseas markets (exports) allows businesses to access larger customer bases and increase revenue. Changing business locations to countries with lower labour or property costs can significantly reduce fixed and variable costs. A common slip: Confusing imports and exports from the perspective of the UK business. Instead, imports are goods brought into the UK (buying), exports are goods sent out (selling). Exam tip: When evaluating the impact of globalisation, always consider both the opportunities (e.g. new markets) and the threats (e.g. increased competition).
See it
Key words
Say what each word means before you turn the card.
Globalisation
Try answering aloud or in your head before turning the card.
Imports
Try answering aloud or in your head before turning the card.
Exports
Try answering aloud or in your head before turning the card.
Multinationals
Try answering aloud or in your head before turning the card.
See every definition
- Globalisation
- The integration of global economies, which profoundly impacts businesses through imports, exports, changing business locations and multinationals.
- Imports
- Goods brought into the UK, which increase domestic competition as overseas firms enter the market but also allow businesses to buy cheaper or higher-quality raw materials from abroad.
- Exports
- Selling to overseas markets, which offers opportunities to increase potential sales and extend product life cycles.
- Multinationals
- Companies operating in multiple countries, which benefit from economies of scale but face complex logistical and cultural challenges.
Label the diagram
Some boxes have lost their names. Pick the right name for each number.
1Box 1
2Box 2
3Box 3
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