Advantages Of Small Scale Industry

The 21st century has seen several companies cross international borders to look for new markets to conduct their business and increase shareholders’ return. The process was fuelled by opening of borders and advancement in transport mode and technology in the 21st century. The situation has complicated the attempts to fully understand the process of global production. However, the research and different literatures in the recent past have given customers and scholar a good read on forms of labour which go into producing the product or service, and how this work is globally distributed (Coe, Dicken and Hess 2008, p.274). The development has made customers to strongly know what they want and what they consume. Therefore, this essay will analyze the Global Production Network (GPN) of coffee and discuss who benefits most from the structure of this GPN. In the analysis, the essay will focus on three different aspects. First, the paper will analyze various forms of labour that go into creating the product and how is this work globally distributed. The essay will also analyze how the value is captured at each stage of production distributed along the network. Lastly, the essay will focus on the institutional arrangements that explain the structure of this GPN.

Exporting has become a very important business strategy nowadays. In order for firms to expand to the international market, and also to maintain and grow their share of market in whatever industry they are in, depending on their goals and objectives, any company must at least explore this possibility. A few and important advantages might come into place, in that they can extend their sales potential of their existing products, increasing margins through a larger customer base. Also, these small to large businesses can consolidate by gaining global share of market, they can reduce their dependence on their existing markets,

Conditions have changed. Global trade has rapidly increased in both volume and value, reaching nowadays more than $4 trillion in 1997 (Daniels J.D., Radebaugh, 1998, pg. 529). Competition is fierce from all corners of the world. Failure at the global level can backfire and may consume existing brands and business relationships. At the same time, global opportunities have emerged that offer possibilities for growth, profit, and an improvement in worldwide standards of living.

Growing up in a very little town in Illinois was a lot different than growing up in Houston, Texas. When I was in the fourth grade I found many things to have changed about my surroundings, I currently lived in a place where, the people thought and acted differently. I know now reading about it and understanding more that some of those changes were for the good and some were not. Small town living has its advantages such as, very close friendships, close approximately to may things, and friendly people. Looking back, I also realized that there were a lot of disadvantages such as lack of transportation, affects of a poor education, no opportunities for growth, crime, no diversity, and low paying jobs and housing. Now that I am older, and aware of the affects of living in a small town, I can see how these many things affected my life and will continue affect it in the future.

International trade has been known as the backbone of of the evolving world. As commercialization begins to form, nations need a way to form relationships between companies and manufactures. Individual countries trade with one another in order to meet the needs of its population. If the country’s needs are not met within the country’s border, that country can then seek assistance from other countries. Through the production of surplus resources, a country can acquire the resources needed to keep moving forward. The micronation of Tyrus is built upon a five acres lot. Within the five acres lot there are very little foliage and space for agriculture or manufacturing. Tyrus can use international trade as a method of accumulating needed resources

Impressed by this worldwide supply chain and the international entanglement of markets we now want to discuss some of the bases of global trade, its implications and the advantages and disadvantages of such an evolution. The major reason behind international expansion and the import of goods is the search for minimum labour cost at a certain quality level or the highest quality for a certain price. Products are bought from the best and cheapest producers whereas transportation costs often play a secondary role. Domestic producers, paying wages many times higher than in developing countries, cannot always fulfil the requirements. Products, which only require low skilled workers, are already produced and imported from abroad since many years. Moreover, as the workers in low-wage areas gets more educated, foreign companies challenge more and more the local white-collar workforce. Isn't this evolution a major threat to our local labour market?

The infant industry argument is one of the leading arguments why G20 countries should enact trade protectionism policies, it argues that newly formed industries do not have the economies of scale that the older competitors from other countries may have, thus they need to be protected so that they can attain the economy of scale (Stiglitz, 70-73). This argument illustrates Stiglitz’s point that many times these protectionist policies must stay in place to protect infant industries because the industries “never grow up and demand to be permanently insulated from outside competition” (Stiglitz, 70). Another argument in support of these policies will create more jobs domestically for the country, but these jobs will only be temporary and the jobs that depended on the exportation of goods will be lost. By turning inward and developing industries domestically, countries as a whole will become less competitive internationally. The products that they develop domestically will be hire priced, and will not feel the need to continuously innovate because they have no competition, ultimately people will be paying higher prices for lower quality products. This has been demonstrated with American cars in the 1970s, Ford produced standard cars that had no quality so when Toyota, a Japanese company broke into the American car market with

Globalisation on a local scale has been greatly impacted by businesses. Several smaller, local businesses have been kicked out of action by their transnational cooperations. This is often a result of end consumers turning to cheaper retail prices which transnational cooperations can offer as they have mass manufactured products using cheap foreign labour. For example; the brand name 'Nike' mass produces products overseas employing approximately 38 000 employees in sweatshops and only pay them

Globalization promotes the concentration and the emerge of large multinational companies, with the possibilities of selling its products worldwide and reducing production cost through exploitation of economics of scaly causes that small businesses reducing their sales potential, this can result in the reduction of global competition and that one of a few companies dominated the market.

Global approaches are not always relevant to firms in the Asia-Pacific apart from alerting them to the nature of the international competitive environment in which they are likely to operate. A global approach is not an operating strategy for Indigenous small and medium scale exporters (SMEs) and is only partially appropriate for local subsidiaries of transnational firms.

The most imported products and food are iPhones and chocolate beans since they can’t be made in the United States due to the environment and the choices the maker has decided. Most of all, it makes our lives feel further connected and wanting to support where our products came from. For the people who determine to not like the idea of Globalization, says that local businesses have been shutting down due to multinational corporations, having advanced in Science and Technology gotten people to lose their jobs. Throughout six articles, all have their own viewpoints about globalization is or is not helping local business and local economies.

Small businesses are mighty minnows, reflecting the competitive spirit that a market economy needs for efficiency; they provide an outlet for entrepreneurial talents, a wider range of consumer goods and services, a check to monopoly inefficiency a source of innovation, and a seedbed for new industries; they allow an economy to be more adaptable to structural change through continuous initiatives embodying new technologies, skills, processes, or products (Ibielski 1997, p. 1).

In India, about 670 industries are completely reserved for very small companies, which means that the economy lose the benefits of scale, don’t get foreign investments and are unable to compete globally. In 2001, the average Indian clothing company had only 50 machines, compared to 500 in the typical Chinese plant. The same problem

The collective way of all the decisions on demand and supply, use of resources and opportunity costs made by millions of people or firms sets the price for goods, services, assets and labour demand and supply therefore form the main principle that underlines all microeconomics (ESRC).

The importance of small and Micro Enterprises (SMEs) in the economy of any country cannot be overlooked. In fact for nearly 15 years, most researchers dealing with economic planning have highlighted the significance of these enterprises stating that they are a key player in realizing any country’s economic goals. As such, governments as well as other organizations with interest in development are laying plans and strategies to promote the establishment of Small and Micro Enterprises. This is seen as a move to ensure that there is full participation of SMEs in the country’s economy. The Small and Micro Enterprises have been known to contribute to a large extend as a source of innovation, entrepreneurial skills as well as source of employment. For example, statistics in 25countries of the European Union show that 99% of the jobs provided to its citizens come from the micro, small and medium-sized enterprises. Rowe (2008) points out that the British economy relies heavily on the participation of SMEs. On the other hand, 99% of the UK’s economy is composed of small and micro enterprises.