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Business Studies IGCSEPDF 191
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3. Outsourcing and Offshoring – Businesses can contract specific tasks (like
customer service or manufacturing) to countries where it’s cheaper.
4. Import Opportunities – Firms can import components or products at lower prices
to sell domestically at a profit.
5. Economies of Scale – Global operations allow for large-scale production, reducing
unit costs.
6. Diverse Resource Access – Easier access to raw materials and skilled workers
worldwide.
Example: Nike designs in the US, manufactures in Asia for lower costs, and
sells globally for maximum profit.
4. Disadvantages of Globalisation
1. Increased Competition – Domestic firms face competition from efficient foreign
producers.
○ → Smaller firms may lose market share or shut down.
2. Pressure on Wages – Multinationals may offer higher salaries, forcing local
businesses to raise pay to retain workers.
3. Job Losses – If domestic firms close due to foreign competition, unemployment
may rise.
4. Economic Dependence – Over-reliance on global trade makes countries
vulnerable to global recessions or crises.
5. Cultural Erosion – Global brands can dominate local markets, reducing cultural
diversity.
6. Environmental Damage – Increased transportation and industrialization can lead
to pollution and climate impact.
Example: Cheap Chinese imports caused many local textile factories in
Pakistan and Bangladesh to close.