BUSINESS II

NAME:

 Santana Lara Isabel

 Barreto Sánchez Gerson
 Guarnizo Guarnizo Rosa

9.1 South Africa accelerates its car production

1.-List four examples of multinational companies that have invested in South Africa.

Mercedes Benz

2.-Fiat

3.- Renault

4.-Volkswagen

2 Using the case study as well as your own knowledge, explain three reasons for these
manufacturers setting up factories in South Africa.

Principal reasons:

1.- It has become a key supplier of components for the motor industry, with massive deposits
of platinum and palladium.

2.- It is a deliberate strategy of the

government to attract the world's best automakers

3.- South Africa offers many financial incentives, so much so that the new factories have had
the benefit of generating thousands of new jobs and forcing hundreds of small and medium
local suppliers to improve quality and productivity or face extinction.

3 Analyse the benefi ts South Africa appears to be gaining from such investment.

The benefits obtained are that:

* They have had the benefit of generating

thousands of new jobs.

* It has 10% of the world production of catalytic converters.

* Generate investment in the country

* Large levels of export.

* Great productivity improvements and stabilize employment

4 Evaluate whether the government of South Africa should continue to support investment
by multinational businesses in its economy.

Of course, we see that South Africa is known as a place of extreme poverty, with the
investment changes generated by the government would be a benefit for the economy, since
the resources provided by this country would be used and we see this through the strategies
applied Therefore, the inhabitants would also benefit, through the employment generated,
offering a better quality of life and, in turn, would generate progress for the country.

OVER TO YOU
REVISION CHECKLIST
1 Why is globalisation not a recent development?
Because it has been a process that has been accelerating over the years in different ways such
as the expansion of free trade, the growth of multinationals and the growth of trade blocs.

2 Identify four factors that have contributed to globalisation in recent

years.
1.-Increase in international trade, since barriers to trade are

reduced

2.-Growth of multinational companies in all countries

3.-Greater freedom of movement of workers between countries.

4.- The expansion of international free trade

with less tariffs and quotas on imports

3 Explain four benefi ts to your country from receiving additional

investment from multinational companies.
1.- Employment opportunities will be created and Training programs will improve the quality
and efficiency of the local population.

2.-Local companies will be forced to contribute their quality and productivity up to

international standards either for compete with the multinational or supply it.

3.-The total production of the economy will increase and This will increase the Gross Domestic
Product (GDP).

4.- Tax revenues for the government will be boosted from any profit obtained by the
multinational.
4 Explain four potential drawbacks to your country from receiving
additional investment from multinational companies.
1.- The exploitation of local labor could occur. Overcome the absence of strict labor and health
and safety regulations

2.- Competing local companies may be forced to close due to inferior and much smaller teams.
resources than the large multinational.

3.- Winnings can be sent back to the country where the boss office of the company is based on
you see to give rise to the investment in the local country

4.-Contamination of plants may be at higher levels than allowed in other countries. Or this
could be due to loose rules or because the host government is afraid to expel the multinational
if it insists on environmentally acceptable practices.

5 Select one well-known multinational company and explain four benefi ts

that this business gains from operating multinationally.
Coca Cola Company:

1) You can easily access great resources. In addition, large companies tend to
enjoy cheaper sources of financing.
2) As they are large consumers, they have great bargaining power with
suppliers.
3) Thanks to economies of scale, they can invest large amounts of money in the
latest technology and make large investments in R & D & i.
4) the best located company in this sector, which is why they produce large
quantities of product at very low prices.

6 ASEAN is an example of a trading bloc. Carry out research into what

type of trading bloc it is.
ASEAN is an intergovernmental organization of Southeast Asian states created
on August 8, 1967 by five countries: Thailand, Indonesia, Malaysia, Singapore,
and the Philippines. It is currently made up of 10 countries in the Southeast Asia
region: Malaysia, Indonesia, Brunei, Vietnam, Cambodia, Laos, Myanmar,
Singapore, Thailand and the Philippines. ASEAN's main objectives are: to
accelerate economic growth and promote regional peace and stability. ASEAN
has established a joint forum with Japan, holds a cooperation agreement with the
European Union
7 Explain the benefi ts and potential drawbacks to a business in Russia
were the country to gain admission to the EU.
Relations with Russia, which are in fact at an impasse, are too important so that
they are weighed down by any bilateral problem. The EU should treat Russia for
what it is: a very important strategic partner, and try to progressively leave
approaching the system of rules and values that the European project represents.
The Union and Russia had been building a strategic partnership in relation to,
inter alia, trade, economy, energy, climate change, research, education, culture
and security, including the fight against terrorism,

8 Would the UK business sector benefi t from the UK joining the

eurozone? Explain your answer.
Yes, U.K. it would have greater budgetary discipline than they will have
separately.
 Greater bargaining power against third parties.
 Development of joint activities that would not be possible separately.