Export Subsidies Advantages And Disadvantages

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

Farm subsidies help farmers to keep the prices of their products low and competitive in the international market. This means that national farmers and their products receive sufficient support and revenue to keep them in business. If this were not the case, there is a danger that retailers will begin to find foreign markets from which to important even basic foods such as corn and meat. The danger here is then that many American

The competition among rivals is very high due to price and non-price factors. Companies try to attract customers to their products by introducing

In chapter eight, one main idea concept is subsidy. Subsidies are an amount of money given to a business, usually from the government, in order to keep the price of service low. A real life example of a subsidy is likely to occur in the farming industry. The farming industry is very competitive in addition to low priced products. Therefore, the government would provide subsidies to a farm so it can sell their products cheaper, yet still make a profit. I do not think subsidies are a necessity, but I can see how they can benefit poorer areas who are able to afford products at the lowest market price. (177-180)

The majority of products offered by industry members are commodities and are weakly differentiated which increases rivalry.

Competition serves as an effective mean for businesses to identify ways to improve product quality, charge lower price, and to increase efficiency. Business that can offer the highest product quality at the reduced costs will succeed in a

Meanwhile, according to Morelock, J (2017) Tariff has a clear number of results that may be an advantage to some parties, while being a significant disadvantage to others. Tariff have an impact on promoting American products, when the U.S government chooses to place a tariff on an import good, the producer can choose to reduce their price to compensate for the tariff or to pass on the cost to the consumer. (2) increase the government revenue, the U.S. government collect revenue in order to economically support its function. (3) discourages trade, when American consumers choose to buy a lower-priced American product, foreign producers become disadvantaged, ultimately leading to less trade with the U.S. Foreign producers are forced to reduce their prices to compete with similar American products. (4) reduces consumer choice, individual consumer choice remains as one of the greatest consumer benefits of international trade. When tariffs are placed on imported goods, the increase prices and reduced trade prohibit individuals from all choices that could be available in the market.

Competition being one of the major issues that often must be addressed in the business world, it is important for a firm to learn on ways to reduce the impact of the competition. Competition is definitely an important factor in helping a business

Competition is very large in the everyday business industry. One company is trying to beat the next company or top the next company. Competition in the businesses is the normal competition. Individuals must be building and have a strategic plan which needs to be unique and different. In large industries such as drink interesting are rapidly changing for the sake of the market place.

When there are industries you can always count on them having competition. The bigger the player, the harder they can play. The big players always attempt to take many of the small competitors. When this happens they can expand their market share. A perfect example for this is the soft drink business; Pepsi and Coke have always been rivals to each other.

Economic policy of nations and states, tariffs are tools used to control the flow of goods, services and resources being brought into the country. The overall purpose is to create security for the domestic industry from the imported product. These products can sometimes be less expensive to purchase than the goods being manufactured in the local economy. (McEachern, 2015) The government does this either stimulate or deflate trade with other countries. (Fontinelle, 2012)

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

Competitors also influence how a company conducts business in a certain market segment, the company’s location, and the overall strategy a company pursues (attack or avoid competitors).

When implementing subsidies in these various markets, the governments, typically the main source of subsidies, are seen by some as acting like parents to the industries that are receiving these funds. Generally the subsidies are grants, tax breaks and trade embargoes against competing companies in foreign countries and are put into place to allow a new industry to begin to develop such as the solar, wind and alternative fuel (ethanol) energy sectors that have only in the last