Explain why globalisation is increasing
Connect transport, communication technology, free trade agreements and newly industrialised countries to cross-border business.
Exam scope and assessment notes
Cambridge IGCSE Business Studies 0450, 2026 syllabus, Version 2. Use the 2026 A*–G route; this qualification changes to 0264 for first assessment in 2027. Candidates are not assessed on constructing income statements or statements of financial position, nor on price-elasticity or exchange-rate calculations. Simple cash-flow forecast construction is assessed. Written practice is self-checked, not an official Cambridge grade; timed-paper evidence and human subject-teacher review remain outstanding.
Before you begin
- No previous study of external influences is assumed. Identify who is affected, which business decision changes and what evidence or condition would affect the outcome.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
Which is a syllabus-listed reason for globalisation?
What you will learn
- Identify syllabus reasons for globalisation
- Explain how each can connect markets
- Apply a reason to a firm
Cross-border connections have several drivers
Improved transport links can make it easier or faster to move goods and people. Technological change, including communication, helps businesses coordinate suppliers, customers and workers across locations.
Free trade agreements can reduce some trade barriers between participating countries. Newly industrialised countries can become important producers, markets or trading partners as industry and incomes change.
A driver creates possibilities, not identical outcomes
These developments can help firms access new customers or suppliers and increase competition. They can also expose firms to longer supply chains, new regulations and unfamiliar customer needs.
Use a specific link in a case. For example, faster shipping may support export delivery, while online communication may help coordinate a supplier; name the business benefit and a condition such as cost, reliability or skills.
Pause and explain
What can communication technology help businesses do across countries?
Worked example
A clothing firm begins selling in another country using online orders and a new shipping route. Identify two globalisation drivers and explain their role.
Show the worked solution
- Communication technology enables the firm to display products and receive orders across borders.
- Improved transport links help deliver the goods.
- The firm must still assess cost, reliability and local demand.
Answer Online communication helps the firm reach and coordinate with customers abroad, while the shipping route makes delivery possible. The firm should check delivery cost and reliability and whether local customers want the offer.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
A small producer uses video calls and online orders to work with a new overseas distributor. Explain how technology supports globalisation and one risk to check.
Give me a hint
Connect the digital tool to communication and coordination, then state a limit.
Compare my reasoning
- Online communication connects the firm with an overseas partner.
- Orders and product information can be shared more quickly.
- Check language, data reliability, payment and local requirements.
Communication technology can help the producer share product details and coordinate orders with an overseas distributor. It should check language, payment, data reliability and local legal requirements; a digital connection alone does not establish customer demand.
Look for these in your work
- Driver linked to activity
- Practical benefit
- Risk and limits named
A free trade agreement reduces a tariff between two countries. Explain a possible opportunity for an exporter and one reason it still needs to assess the market.
Give me a hint
Lower trade barriers can change cost, but the product still must compete.
Compare my reasoning
- The exporter may face a lower tariff on its goods.
- Its landed price or competitiveness may improve.
- Check demand, rivals, logistics and product rules.
Lower tariffs may reduce the cost of entering the market or improve the exporter's price competitiveness. It still needs to assess demand, rivals, logistics and product requirements; the agreement does not guarantee sales or remove every rule.
Look for these in your work
- Agreement mechanism stated
- Business opportunity explained
- Remaining checks named
A newly industrialised country becomes a supplier and a customer market for a manufacturer. Explain one opportunity and one supply-chain concern.
Give me a hint
A changing industrial economy can bring production capability and demand, alongside dependency risks.
Compare my reasoning
- The firm may gain a supplier or sell to a growing customer base.
- Longer or concentrated supply chains may face delays or disruption.
- Compare quality, delivery, currency and alternative suppliers.
The manufacturer may access a new source of inputs and a new market for its products. Reliance on a distant or concentrated supplier can increase delay and disruption risk, so it should compare quality, delivery reliability and alternatives.
Look for these in your work
- Opportunity connected to both roles
- Risk explained
- Checks identified
Common mistakes
- Treating globalisation as caused only by the internet
- Assuming trade agreements remove every legal or practical barrier
- Assuming transport always makes delivery cheaper
What can you explain now?
Which is a syllabus-listed reason for globalisation?
Compare with the explanation
Improved transport links
Transport links are one named driver.
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Make it stick
List four syllabus reasons for globalisation.
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.