Business & the International Economy

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Business & the International Economy

The big idea: the world's markets are all connected now — businesses buy, sell, hire, and set up shop across borders more than ever, and this "globalisation" creates huge opportunities but also real risks, all shaped by one wobbly, ever-changing number: the exchange rate.

📋 Summary — What This Chapter Covers

Skim this first. Every bullet below gets fully explained later.

Globalisation is the growing economic integration of countries — trade, people, tech, and money moving more freely across borders.
Countries import (buy from abroad) and export (sell abroad) — exports bring revenue in, imports send money out.
Six drivers pushed globalisation forward: technology, transport, deregulation, government commitment, market saturation, and brand familiarity.
Globalisation creates opportunities for businesses: bigger markets, economies of scale, access to labour, and favourable tax regimes.
But it also brings threats: tougher competition, the need for a niche, risk of hostile takeover, and exposure to external shocks.
A multinational company (MNC) is registered in one country but operates (manufactures or sells) in several others.
MNCs affect stakeholders differently — local residents, local businesses, local government, and national government all win and lose in different ways.
An exchange rate is the price of one currency in terms of another, and it constantly moves.
A currency can appreciate (rise in value) or depreciate (fall in value) — this changes how expensive imports and exports are.
You need to be able to calculate currency conversions using a simple formula — this is a guaranteed numeracy question.

🌍 Topic 1 — Globalisation

Why the world's economies have become so tangled together.

What Is Globalisation, Really?

Globalisation is the business and economic integration of different countries through increasing freedom in the cross-border movement of people, goods, services, technology, and finance.

Think of it like this: fifty years ago, most countries operated like separate, sealed rooms. A business in the UK mostly sold to UK customers, hired UK workers, and bought UK materials. Globalisation is the process of knocking down the walls between those rooms — so a t-shirt might be designed in the US, its cotton grown in India, the fabric woven in Bangladesh, sewn together in Vietnam, and sold in a shop in the UK. One product, five countries, one connected world economy.

Imports vs Exports — don't mix these up

Term	Meaning	Effect on the country's money
Imports	Goods and services bought by people/businesses in one country from another country	Money leaves the country — but generates revenue for the foreign business
Exports	Goods and services sold by domestic businesses to people/businesses in other countries	Money comes into the country — extra sales revenue for the domestic business

💡 Memory trick Think "EXports EXit" — exports leave the country and bring cash home. Imports come IN, and cash goes OUT to pay for them.

The Six Reasons Globalisation Happened

why

Example:

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Also in the full note

🏢 Topic 2 — Growth of Multinationals
💱 Topic 3 — Exchange Rates
🧠 What to Memorise
✅ Concepts Checklist
🎯 Exam Tips & Common Traps
Opportunities of Globalisation for Businesses
Threats of Globalisation for Businesses
What Is a Multinational Company (MNC)?

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Business Objectives

Globalisation

The Importance of Business Location

Primary, Secondary & Tertiary Business Sectors

External Factors that Impact Business Decisions

Government Objectives

Financial & Non-financial Objectives

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Sole Traders & Partnerships

Internal & External Communication