TNC effects on Globalisation
TNCs effect Globalisation in many different ways.
One way that TNCs have spread Globalisation is through Cheap International Marketing. Wealthy TNCs often utilise the vast resources of people for cheap labour in LEDCs such as China and other parts of Asia and Africa.
By investing in a developing country, a TNC is able to benefit from cheap labour as developing countries usually do not have any form of national minimum wage. This means that the TNCs costs are kept to a minimum thus creating productive efficiency. If costs are low, profit should remain high which can then be used to reinvest into product innovation and new technology. The aim of this investment is to crush all local and/or lesser companies, thus becoming the dominant corporation.
Thanks to the intelligent investments TNCs make in LEDCs, some TNCs can become huge (e.g Nike, Adidas, Coca-cola) and can even earn more money in a year than some countries.
Another way that TNCs spread Globalisation is through the concept of the 'Uninformative Product' which is where a compamy will release only one product, one after the other. For example, Apple release the Ipod Classic, then the Ipod Nano, shuffle, Iphone, Ipad etc). This means that everyone will desire the latest and the best product the company has to offer.
TNCs also spread Globalisation by destroying local competitors in the LEDCs. Many companies will invest offices and factories in LEDCs and then, by attracting plenty but cheap labour, quickly dominate and crush the lesser companies and businesses. this means less competition, which equals more money, sales and success in the TNC.
TNCs effect Globalisation in many different ways.
In addition, TNCs have help spread Globalisation through the use of Advertising.
Advertising is an extremely significant and effective way to spread TNCs and thus Globalisation as it promotes ideas, concepts and stock all across the globe.
Advertising comes in many forms such as:
One way that TNCs have spread Globalisation is through Cheap International Marketing. Wealthy TNCs often utilise the vast resources of people for cheap labour in LEDCs such as China and other parts of Asia and Africa.
By investing in a developing country, a TNC is able to benefit from cheap labour as developing countries usually do not have any form of national minimum wage. This means that the TNCs costs are kept to a minimum thus creating productive efficiency. If costs are low, profit should remain high which can then be used to reinvest into product innovation and new technology. The aim of this investment is to crush all local and/or lesser companies, thus becoming the dominant corporation.
Thanks to the intelligent investments TNCs make in LEDCs, some TNCs can become huge (e.g Nike, Adidas, Coca-cola) and can even earn more money in a year than some countries.
Another way that TNCs spread Globalisation is through the concept of the 'Uninformative Product' which is where a compamy will release only one product, one after the other. For example, Apple release the Ipod Classic, then the Ipod Nano, shuffle, Iphone, Ipad etc). This means that everyone will desire the latest and the best product the company has to offer.
TNCs also spread Globalisation by destroying local competitors in the LEDCs. Many companies will invest offices and factories in LEDCs and then, by attracting plenty but cheap labour, quickly dominate and crush the lesser companies and businesses. this means less competition, which equals more money, sales and success in the TNC.
TNCs effect Globalisation in many different ways.
In addition, TNCs have help spread Globalisation through the use of Advertising.
Advertising is an extremely significant and effective way to spread TNCs and thus Globalisation as it promotes ideas, concepts and stock all across the globe.
Advertising comes in many forms such as:
- Television
- Internet
- Billboards
- Posters
- Magazines