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Development and globalisation case studies

From China to Brazil via McDonalds - read our case studies to help give you ideas for your own essays.

China: an NIC

China is the most widely used example of an NIC and with good reason as its history and development covers almost everything that students are required to know and give examples of. China is the world’s fastest growing economy and the second largest after the United States. It exports more manufactured goods than any other country and is the second largest importer of products in the world.

China’s impact on the global raw materials is huge. It dominates the use of raw materials in its manufacturing industry. When China’s industry is experiencing high demand for steel based goods then the global price of steel rises such is its influence.

China benefits from having a well-developed trade infrastructure. The rise in container shipping was a boost for industry in China, as much as its growing exports were for the shipping industry. The communist system in China has allowed for very tight controls on the targeted development of its regions and the government has benefitted from having industrial profits to reinvest in infrastructure.

Agriculture

China produces and consumes more than any other country in the world, hardly surprising given its population is approaching 1.5 billion. It is the largest producer of rice and pork. Over half of the world’s 700,000million pigs are in China!

China has developed highly effective intensive farming methods, yielding more food by area than any other country. It has also bought land across the globe in order to produce more food, some to be sold on global markets for profit but some for import. In China itself, farming is largely non-mechanised or uses simple machinery. This is in contrast to its overseas agriculture which employs the most technologically advanced equipment to maximise output.

Energy and mineral resources

Four fifths of the energy produced in China is from fossil fuels which draws criticism from the global community because of resources depletion and air pollution. China has to import 20% of its oil to meet energy demand and it has invested in oil producing countries around the globe. China has planned and continues to plan to reduce its reliance on fossil fuels. The Three Gorges Dam is the largest of many hydro-electric power stations providing a quarter of its electricity needs.

The mining industry employs about 1% of the country’s population and China’s mineral needs cannot be met internally due to its rapid industrialisation. Coal is China’s biggest mined product and in 2012 it produced just under a billion tons. It produces huge amounts of oil, gas and some metals. It imports ores to process into metals too for its manufacturing industry.

Industry and Manufacturing

China’s most famed for its consumer goods with ‘Made in China’ being printed on so many products across the globe it has a fierce reputation as a producer. Factories are on huge scales, one example of a sock factory produces 1.5 million pairs a day for export. Textiles are the largest part of China’s consumer goods industry.

The motor industry in China is huge with 1 in 4 of the world’s cars produced there. This has been fuelled not only by global demand (and exports for China) but by the number of Chinese who are able to afford to buy and run cars with their increasing disposable income.

The Service Sector

China is seventh in the world service sector rankings and accounts for just less than half of its GDP. As the country has developed so has the level on consumerism. White goods, cars and luxury products are in high demand and urban centres are home to huge shopping centres and retail outlets. China has increased its tourism trade and an estimated 6% of its GDP comes from foreign spending.

The Olympic Games in China were a runaway success and boosted the economy at the time and since then by attracting tourists. It is estimated that China will have the world’s largest tourism industry by 2020 accounting for up to 10% of world market share.

Shell: a TNC

Introduction

A case study of a trans-national company (TNC) needs to be as recent as possible to have maximum relevance. The economic fortunes of businesses change quickly and drastically which is why you will not find case studies in many text books. Even with well-known TNCs such as Ford, Apple or Shell, circumstances can alter for them and keeping up to date with developments is important. For example, McDonald’s has 30,000 outlets in 19 countries… at the time of writing this! By the time you read this it will have changed. The general features of TNCs, for example the majority are from MEDCs will still apply as will the concepts relating to their operation but facts and figures should be up to date in case studies.

Profile

SHELL has 92,000 employees in over 70 countries. Their primary concern is energy; oil and natural gas are what they are most well known for. They produce more than 3 million barrels of oil each day. The company is known in the UK for extracting natural gas (and some oil) from the North Sea fields. It has operations throughout Europe but in the UK, Aberdeen and East Anglian depots are good examples to use.

SHELL’s interests go beyond the automotive industry it is renowned for by supporting other industries such as aviation, engineering, the marine industry and motorsport.

Follow the Sun IT Support

SHELL, like many other TNCs, is a 24/7/365 company that supports 1000’s of employees around the world. An impressive example of its logistical success is its IT support system which is known as ‘Follow the Sun’. If an employee in Lowestoft (East Anglia) rings IT support with a problem between the hours of 09.00 and 17.00 they speak to someone in the UK. After 17.00, if the same employee was working late or from home and they needed further support they would pick up the telephone, dial the same number and speak to a SHELL colleague in the USA. The experience of the employee would be seamless. Support would pick up where it left off. If the employee starts work early, say 05.00 and call IT support again then they speak to someone who works for SHELL in Kuala Lumpur. This is a very specific example of a TNCs efficiency in operation.

Finance

SHELL prides itself on supporting sustainable development and their website quotes figures to demonstrate this. For example, in 2013 from a total revenue of $451.2 billion $12 billion was spent in LICs, $750 million invested in safety and $159 million spent on ‘voluntary social investment’ across the world. Whilst high numbers, as percentages of total revenue, these spending figures are arguably small.

Future

SHELL undoubtedly has a lot more oil and gas to find and extract, in areas such as the Arctic, where there are an estimated 400 billion barrels of oil equivalent (natural gas included). In a fragile environment such as this there is a lot of controversy about its extraction and many think that the TNC should be investing more in renewable energy sources such as wind. SHELL has 10 major wind farms, in North America and Europe but whilst so much fossil fuel is yet to be extracted this is not going to be a huge priority.

Bangladesh: an LDC

Bangladesh is an example of a Least Developed Country. It meets all the UN criteria of low income, limited human resources and it has a vulnerable economy.

The population of Bangladesh is approximately 153 million, 7 million of whom live in the capital city Dhaka. Life expectancy is 70 years for both men and women (approximately 12 years below the UK). The GNI per capita fluctuates around the US $760 mark and is predominantly made up of income from exports of garments, jute (a fibre used in rope making) and jute goods and leather products. In 2013 the HDI ranking was 144 out of 187 (UN Development Report).

Development Plan

The country has a current development plan, aided by other countries including the UK, which aims to target resources effectively to suit the needs of the country and its population to help the progress of development. Current focus is on improving water supply to areas which lack a clean supply (Water Aid are involved), health care, education and the development of agriculture. There are also micro-finance projects which aim to give targeted support where it is needed, these schemes include self-help and improving the status of women in society. The approach is very much trade as oppose to just aid, and indications are that it is working, Bangladesh is rising up the HDI rankings.