Globalisation of services

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Information about Globalisation of services

Published on March 19, 2008

Author: Marianna


Globalisation of services:  Globalisation of services Virgin Case Study Multinationals:  Multinationals An organisation that has operations in a large number of countries. Research and development take place in MEDCs, assembly in LEDCs and less well off areas within MEDCs. Virgin isn’t a classic MNC: It employs 20,000 globally but….. Very little manufacturing Successful diversification c) Made up of numerous Virgin companies operating fairlt independently Why go global?:  Why go global? Lower production costs, esp labour Can avoid tariffs and quotas Opportunity to tap world market Exchange rate advantages Ability to avoid strict environmental regulations in certain countries. Economic Power:  Economic Power Ownership of assets eg Hotels, warehouses. Control of assets. If assets not owned MNC can control marketing and transport of goods Employment. Over 50million are employed by MNCs. Government incentives. Duty free imports of raw materials, provision of infrastructure, cheap land rents Survival strategies:  Survival strategies Rationalisation Reduce workforce – replace with machines Reorganisation Improve administration, marketing Diversification Development of new products (eg finance) to make them less vulnerable to economic collapse. These MNCs are called conglomerates Timeline – key events:  Timeline – key events Major operations:  Major operations Virgin Travel 20 aircraft operating worldwide focussing on service, value & innovation Virgin Holidays Mainly Florida – Virgin is Disney Hotels’ biggest customer Virgin Retail Over 50 megastores, in partnership with WHSmith Virgin Rail Main route from London to Glasgow Virgin Net Internet Service Provider, a joint venture with NTL Virgin Direct Personal Finance Joint with Royal Bank of Scotland – unique “One” account Future….:  Future…. Highly reliant on Branson Usually entrepreneurs don’t pass ont their heritage successfully But Branson argues that each company could stand alone led by strong management Uncertain future of Virgin Atlantic after 9/11, and Railtrack* failures *Railtrack owns the Tracks and is under constant criticism for poor track maintenance

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