{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

cavusgil_ib2_inppt06 SHORT

It refers to the distinctive assets competencies and

Info iconThis preview shows pages 10–18. Sign up to view the full content.

View Full Document Right Arrow Icon
It refers to the distinctive assets, competencies, and capabilities that are developed or acquired by the firm. The collective competitive advantages held by the firms in a nation are the basis for the competitive advantages of the nation at large. International Business: The New Realities 6-10
Background image of page 10

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Examples of Firm Competitive Advantage Dell’s prowess in the management of its global supply chain Samsung’s technological leadership in flat-panel televisions Cadbury’s capabilities in international marketing and distribution Herman Miller’s design strengths in office furniture (e.g., Aeron chairs) International Business: The New Realities 6-11
Background image of page 11
Absolute Advantage Principle International Business: The New Realities 6-12 A country should produce only those products in which it has absolute advantage or can produce using fewer resources than another country (Labor Cost in Days of Production for One Ton)
Background image of page 12

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Adam Smith (1723-1790) 6-13
Background image of page 13
Comparative Advantage Principle International Business: The New Realities 6-14 It is beneficial for two countries to trade even if one has absolute advantage in the production of all products; what matters is not the absolute cost of production but the relative efficiency with which it can produce the product (Labor Cost in Days of Production for One Ton)
Background image of page 14

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Comparative Advantage Principle (cont’d) International Business: The New Realities “Two men can make both shoes and hats, and one is superior to the other in both employments, but in making hats he can only exceed his competitor by one fifth or 20 percent, and in making shoes he can excel him by one third or 33 percent; Will it not be for the interest of both that the superior man should employ himself exclusively in making shoes and the inferior man in making hats?” David Ricardo, 1817
Background image of page 15
Comparative Advantage Principle (cont’d) While Germany can make both items cheaper than France, it is still beneficial for Germany to trade with France. The key is the ratio of production costs. In the exhibit, Germany is comparatively more efficient at producing cloth than wheat: it can produce three times as much cloth as France (30/10), but only two times as much wheat (40/20). Germany should specialize in producing cloth and import all the wheat it needs from France. France should specialize in producing wheat and import all its cloth from Germany. Each country benefits by specializing in the product in which it has a comparative advantage and importing the International Business: The New Realities 6-16
Background image of page 16

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Limitations of Early Trade Theories Fail to account for international transportation costs. Governments distort normal trade by selectively imposing protectionism (e.g., tariffs) or investing in certain industries (e.g., via subsidies). Services: Some cannot be traded; Others can be
Background image of page 17
Image of page 18
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page10 / 39

It refers to the distinctive assets competencies and...

This preview shows document pages 10 - 18. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online