A Cost Globalization Driver

A Cost Globalization Driver

  • Submitted By: rennata
  • Date Submitted: 11/25/2008 4:40 AM
  • Category: Business
  • Words: 377
  • Page: 2
  • Views: 1362

Cost drivers depend on the economies of the business and so on can vary by industry. For example, global economies of scale are a cost globalization driver when they can only be realized with sales in many countries as opposed to one.
Competitive drivers
Government drivers
The credit crunch refers to a sudden shortage of funds for lending, leading the resulting decline in loans available. A credit crunch can happen for various reasons, a sudden increase in interest rates can push a credit crunch, and in 1992 the UK governments increased their rates to 15. The drying up of funds in the capital markers on mortgages, these mortgages were mainly in America but the resulting shortage of funds spread throughout the rest of the world.
The credit crunch that we currently find ourselves in was caused by inflation. Inflation can be defined as a persistent tendency for prices to rise, it occurs when the general increase in the price level, not just if one business raises its prices. Low levels of inflation is considered acceptable in most countries all over the world, a number that is acceptable is usually below 5 percent. Some believe that inflation is caused by the increases in the money supply; this is the total of money that is going around in the economy. In⋅fla⋅tion Economics. A persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency
Due to banks and other companies like AIG borrowing more than they have in assets, it has driven them to be bailed out by the governments and other firms with money. The AIG bust has affected people around the world as people had shares in the company and ended up loosing money because of the bust. Companies like banks and AIG have been affected because currently, people cannot afford to go to the bank and get a load to own a house and those who own houses have very well been made redundant therefore in some cases may not be able to...

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