This tutorial includes an example of how to conduct a case analysis, using the case of Logitech, and an overview of some of the more influential international trade theories and ideologies of the past five hundred years. Particular attention is given to Adam Smith's theory of Absolute Advantage and David Ricardo's theory of Comparative Advantage.
Classical country-based trade theories and Modern Firm-based trade theoriesHelmee Halim
This paper presents an analysis of classical country-based theories and modern firm-based theories. Subsequently, further critical analysis is presented based on Mercantilism, being the least favorable theory and The National Competitive – Porter’s Diamond theory being the most appealing theory. This paper concludes with a case study of Toyota Motor Corporation’s global strategy in the international trade.
This tutorial includes an example of how to conduct a case analysis, using the case of Logitech, and an overview of some of the more influential international trade theories and ideologies of the past five hundred years. Particular attention is given to Adam Smith's theory of Absolute Advantage and David Ricardo's theory of Comparative Advantage.
Classical country-based trade theories and Modern Firm-based trade theoriesHelmee Halim
This paper presents an analysis of classical country-based theories and modern firm-based theories. Subsequently, further critical analysis is presented based on Mercantilism, being the least favorable theory and The National Competitive – Porter’s Diamond theory being the most appealing theory. This paper concludes with a case study of Toyota Motor Corporation’s global strategy in the international trade.
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15+1 Сritical Mistakes in Lead Generation You Better AvoidLyuba Lazarenko
The Lead Generation is not an easy thing to do. It is long and tedious process that requires efforts and time. And you never can do it perfectly. Usually the results come after failures and lessons learned. Even the most influential growth strategies and marketing professionals have dealt with big mistakes in lead generation.
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[SlideShare] Affinity Data Tells The Stories Of 2016Affinio
Let's face it, 2016 was a memorable year. At Affinio, we get to run analyses on almost any hot topic happening in the news – whether it be political, sports-related, or breaking pop culture news. And there were a lot of hot topics happening over the course of 2016. That’s why we created this SlideShare where we take a look back at the year of 2016 and highlight some of the biggest newsworthy events through the lens of affinity data.
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The Competitive Advantage
of Nations
Michael E. Porter
Harvard Business Review
90211
HBR
MARCH±APRIL 1990
The Competitive Advantage of Nations
Michael E. Porter
National prosperity is created, not inherited. It does of the patterns of competitive success in ten leading
trading nations, contradict the conventional wisdomnot grow out of a country's natural endowments, its
labor pool, its interest rates, or its currency's value, that guides the thinking of many companies and na-
tional governments— and that is pervasive today inas classical economics insists.
Anation'scompetitivenessdependsonthecapacity the United States. (For more about the study, see the
insert “ Patterns of National Competitive Success.” )of its industry to innovate and upgrade. Companies
gain advantage against the world's best competitors According to prevailing thinking, labor costs, inter-
est rates, exchange rates, and economies of scale arebecause of pressure and challenge. They benefit from
having strong domestic rivals, aggressive home-based the most potent determinants of competitiveness. In
companies, the words of the day are merger, alliance,suppliers, and demanding local customers.
In a world of increasingly global competition, na- strategic partnerships, collaboration, and suprana-
tional globalization. Managers are pressing for moretions have become more, not less, important. As the
basis of competition has shifted more and more to government support for particular industries. Among
governments, there is a growing tendency to experi-the creation and assimilation of knowledge, the role
of the nation has grown. Competitive advantage is ment with various policies intended to promote na-
tional competitiveness— from efforts to managecreated and sustained through a highly localized pro-
cess. Differences in national values, culture, eco- exchange rates to new measures to manage trade to
policies to relax antitrust— which usually end upnomic structures, institutions, and histories all
contribute to competitive success. There are striking only undermining it. (See the insert “ What Is Na-
tional Competitiveness?” )differences in the patterns of competitiveness in
every country; no nation can or will be competitive These approaches, now much in favor in both
companies and governments, are flawed. They funda-in every or even most industries. Ultimately, nations
succeed in particular industries because their home mentally misperceive the true sources of competi-
tive advantage. Pursuing them, with all their short-environment is the most forward-looking, dynamic,
and challenging. term appeal, will virtually guarantee that the United
States— or any other advanced nation— neverThese conclusions, the product of a four-year study
achieves real and sustainable competitive advantage.
We need a new perspective and new tools— an ap-
Harvard Business School professor Michael E. Porter is the author proach to competitiveness that grows ...
WTO & Trade Issues - International Trade Environment.pptxDiksha Vashisht
To better understand how modern global trade has evolved, it’s important to understand how countries traded with one another historically. Over time, economists have developed theories to explain the mechanisms of global trade.
The main historical theories are called classical and are from the perspective of a country, or country-based.
A wide-ranging presentation assessing the impacts of trade liberalisation on national economies and the international trend towards greater trade in services.
2. Outline
Key Terms
Comparative Advantage
Heckscer-Ohlin Theory
The Product Life-Cycle Theory
New Trade Theory
National Competitive Advantage: Porter’s Diamond
Article
Discussion
Quiz
3. Key Terms
Constant returns to specialization The units of resources
required to produce a good are assumed to remain constant no matter where
one is on a country’s production possibility frontier.
Factor endowments A country’s endowment with resources such as
land, labor, and capital
Economies of Scale Cost advantage associated with large-scale
production
First-mover Advantages accruing to the first to enter a market
4. Comparative advantage
Comparative advantage suggests that even if a
country has absolute advantage of two products they
can still benefit from trade
5. Gains From Trade
Combined output increases from both countries
Consumption increases
On a global scale:
Potential world production is greater with
unrestricted free trade than it is with restricted
trade.
6. Qualifications and Assumptions
Unrealistic assumptions
It is possible for many countries with many different
goods to still benefit
A rich country could possibly be worse off by
trading
7. Evidence of the Link Between Trade & Growth
Countries with a more open stance on international
trade have better growth rates
Open vs. Closed Growth Rates
Concludes that living standards and greater
economic results come from open trade policies
8. Heckscher-Ohlin Theory
• Eli Heckscher and Bertil Ohlin argued that comparative
advantages arise from differences in national factor
endowments (more abundant a factor, the lower the
cost)
9. Heckscher-Ohlin Theory
The Leontief Paradox
Found U.S. exports were less capital intensive than
U.S. imports
Produce what you are more efficient in, not
necessarily what your endowments favor
The U.S. exports commercial aircrafts and imports
textiles because they are
relatively more efficient at
producing aircrafts
10. The Product Life-Cycle Theory
Proposed by Raymond Vernon
Wealth and size = incentive to develop consumer
products
Cost of labor = incentive to develop cost-saving
process innovations
11. The Product Life-Cycle Theory
Evaluation
Exports began to decline because of other countries
entering the market quicker or simultaneously
Product Life Cycle Theory more accurate when U.S.
was dominating the global economies (1945-1975)
Relevance in modern world more limited
12. New Trade Theory
Focuses on Economies of Scale
Studied by Nobel Prize winner Paul Krugman
Trade increases variety available to consumer, and
decreases average cost of goods
13. New Trade Theory
Increasing Product Variety & Reducing Costs
Only valid where economies of scale is a factor
Trade offers mutual gain even when there are not
differences in resources or technology
Minivans vs. Sports Cars
Country A needs 80,000 minivans but must produce
100,000 for economies of scale to be reached
14. New Trade Theory
Economies of Scale, First-Mover Advantages & The Pattern of Trade
Ability to capture scale economies ahead of later
entrants and benefit from lower cost structure
Global market may only be able to support one
producer of certain products
The first mover advantage can lead to becoming a
leading exporter
“Whoever is first in the field will be fresh for the fight.
Whoever is second in the field and has to hasten to
battle will arrive exhausted.” Sun Tzu
15. New Trade Theory
Implications of New Trade Theory
• Government intervention and strategic trade policy
• Boeing was largely paid for by U.S. from a spin off of
a government-funded military program
16. National Competitive Advantage:
Porter’s Diamond
Four attributes that explain why nations have success
in particular industries – beyond the N.T.T.
Factor endowments
Demand Conditions
Related and Supporting Industries
Firm Strategy, Structure, and Rivalry
Two Additional Factors
18. Evaluating Porter’s Theory
Argues presence of all factors is usually required
Government can positively or negatively effect all
four factors
If correct mirror Real World Trade, but is he?
19. “Australian Election: How do the Major Parties
Stack Up On Fair Trade”
As the election draws near, The Australian Fair Trade and Investment Network (AFTINET)
has analysed how the trade policies of our major political parties compare in relation to fair
trade and free trade.
Both the Labor party and the Coalition are committed to trade liberalization, but differ in
their approach. Labor policy emphasizes sharing the benefits of trade liberalization both
domestically and between countries. The policy recognizes that short-term support is needed
to assist some workers and sectors to adjust and that although trade is important, it is not
always sufficient for developing countries. On the other hand, the Coalition focuses on
increasing Australia’s exports through “fast tracking” Free Trade Agreements especially in
Asia and particularly with China, Indonesia, Japan and India. The Coalition aims to increase
Australia’s reputation as “a safe place to invest”. The Greens emphasize the importance of
fairness and democracy in their approach to international trade and highlight the need to
assist developing countries.
To compare the parties on key fair trade issues, we examined the policy documents of each
party, as well as pre-election statements and publications on nine key issues. They are labour
rights, the environment, health care and access to medicines, investor rights to sue
governments (ISDS), intellectual property, Australia’s cultural industries, transparency, the
Trans-Pacific Partnership and Multilateral versus bilateral and regional agreements.
20. Article Complications
All parties in favor of trade liberalization
Each party has different policies and views on
achieving it
21. Background
The Labor and Green parties have specific policies
for all issues related to international trade
Liberals have no specific policies and have a negative
policy on investor state dispute
22. How is this Relevant?
To our class: International trade is a major topic of
our course
To Australia: To see if parties stick to their policies
and to see how trade is effected by the elections
23. Implications Raised
If Liberal Party wins: International trade will be less
structured, they will focus on fast-tracking free trade
agreements
If Labor Party wins: Benefits of trade will be shared
both domestically and with other countries
If the Green Party wins: Fairness and democracy will
be implemented and they will enforce the need to
assist developing countries