MHL manufactures tyres for large vehicles．It has factories in 6 countries．The business creates external costs when producing its products．Good communication with MHL＇s suppliers is important． The Managing Director knows globalisation provides many opportunities for MHL．She is reviewing data for one of MHL＇s factories as she wants to reduce the average cost of the tyres．An extract from this data is shown in Table 4．1． Explain two opportunities of globalisation for MHL. Opportunity 1: Explanation: Opportunity 2: Explanation:
Exam No：0450_s25_qp_12 Year：2025 Question No：4(d)
Answer:
Award 1 mark for identification of each relevant opportunity (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).
Points might include:
- Increase potential sales/access more markets [k] for its tyres [app] increasing revenue/increase market share [an]
- Cheaper/access (better quality) raw materials from other countries [k] for its factories [app] could help improve the profit margin [an]
- Lower wages/cheaper labour [k] in the 6 countries [app] reducing (labour) costs [an]
- Avoid/fewer quotas [k] which could limit quantity sold/able to sell [an]
- Avoid/lower tariffs [k] so does not make products more expensive [an]
- Access new technologies [k] which could improve efficiency/allow new product development [an]
- Access to government grants (in other countries) [k]
Other appropriate responses should be credited.
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).
Points might include:
- Increase potential sales/access more markets [k] for its tyres [app] increasing revenue/increase market share [an]
- Cheaper/access (better quality) raw materials from other countries [k] for its factories [app] could help improve the profit margin [an]
- Lower wages/cheaper labour [k] in the 6 countries [app] reducing (labour) costs [an]
- Avoid/fewer quotas [k] which could limit quantity sold/able to sell [an]
- Avoid/lower tariffs [k] so does not make products more expensive [an]
- Access new technologies [k] which could improve efficiency/allow new product development [an]
- Access to government grants (in other countries) [k]
Other appropriate responses should be credited.
Knowledge points:
6.3.1.1. The concept of globalisation and the reasons for it
6.3.1.2. Opportunities and threats of globalisation for businesses
6.3.1.3. Why governments might introduce import tariffs and import quotas
6.3.2.1. Benefits to a business of becoming a multinational and the impact on its stakeholders
6.3.2.2. Potential benefits to a country and/or economy where a MNC is located, e.g. jobs, exports, increased choice, investment
6.3.2.3. Potential drawbacks to a country and/or economy where a MNC is located, e.g. reduced sales of local businesses, repatriation of profits
6.3.3.1. Depreciation and appreciation of an exchangerate
6.3.3.2. How exchange rate changes can affect businesses as importers and exporters of products, e.g. prices, competitiveness, profitability (exchange rate calculations will not be assessed)
Solution:
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