1 Introduction
The case study will address the issues contained in the case using theories of international business such as the theory of comparative advantage, global operations, free trade and Porter’s diamond that will be based on the cross-border trade and investment in the world, These theories can be incorporated in the company Logitech, which has made them into one of the world’s leading provider of personal peripherals. This analysis allows the team to develop the knowledge and identify the important implications in which international trade theory can be linked to real-life business situations.
2 Theory of Comparative Advantage and Global Operations
The theory of comparative advantage implies the importance of trading for other goods with countries that specialize in the producing those goods in areas that are more efficient so that countries can utilize the majority of its resources to gain an absolute advantage. Logitech has benefitted by diversifying its global operations to different countries based on operational and strategic decisions to remain competitive and innovative in the computer industry.
In order to expand and increase its profit margins, they had to remain cost-effective in the manufacturing of its products so they decided to venture into Taiwan and capitalize on the “low-cost labour and production costs to manufacture products that are more affordable to consumers, which resulted an increase of market share” and first mover’s advantages to
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.
The reasons for the company to choose Taiwan as the primary target for its international expansion
The issue and concept addressed in the case study is trade theories such as competitive advantages and also the benefits and costs brought by international trade and its related government policies.
One of America’s most powerful tool to enhance and prosper the lives of its citizens deals with the principles of trade in the global market. Throughout much of the twentieth century, individuals who embody the roles of a leader or policymaker viewed trade by means of military power. Although in more recent decades, policymakers and leaders went beyond this scope to realize that trade poses even more power than military strength, such as prosperity, investments, enterprises, goods, and international relations that are so strongly needed for more unifying relationships between global actors. Within the United States, trade can be looked at in a perspective of a very powerful business. It attracts investors and manufactures while also proving
With the recent history of gun violence on college campuses, questions have been raised on how incidents like these can best be prevented. One proposed solution is allowing firearms to be carried on campuses. With many states passing the open carry law, the topic of guns on campus has become a major issue; however, there are many reasons to why allowing guns to be carried on campus would not help prevent situations like these. A college campus is a place where individuals of different maturity levels come to learn and develop. Research has shown that college students are not fully developed in regards to impulse and judgment, so allowing a student to be able to carry a gun would not be a logical choice. In addition, allowing guns on campus could lead to an increase in reckless shooting incidents, an increase in gun related crimes, and add to the difficulty to law enforcement personnel. A college campus needs to be a safe place for all. To ensure the safest environment for college students, guns should not be able to be carried on campus with the exception to law enforcement.
The importance of legal representation to those considered to be poor or disadvantaged is vital to the outcome they receive in legal processes. In saying this, eligibility for public funded representation such as legal aid can be difficult to obtain (Hall 1993). Legal aid provides assistance to people unable to afford legal representation and access to the court system (Hall 1993). Legal aid is defined as a grant of legal assistance free-of-charge, for people who cannot afford their own representation and meet certain criteria such as a means test to determine eligibility (Australian Government 2017). Published research has illustrated that the chances of people being successful rises from 20 percent to 35 percent when professionally represented
They are facing difficulty in logistics and procurement restricted to imports from Taiwan. Sometimes, they are also have marketing budget of their products during their promotion.
Marijuana is the most commonly used illicit drug in the United States. In 2015, more than 11 mil-lion young adults ages 18 to 25 used marijuana in the past year. The drug has both positive and negative effects. Both physical and mental. Living up to full potential is something any person strives to do. Choosing to use marijuana at a young age might not be the best choice to a grow-ing brain.
In addition, the internationalisation is the strategy to occupy the foreign market step by step. Also, the porter’s competitive advantages theory is to analysis the strategies of global business. They could divide to three strategies: over cost leading, diversity, and market focus strategy (Passemard& Calantone, 2000). The cost leading strategy focus on establish efficient scale production facility and minimize the research and advertising cost. The diversity strategy focus on introduce some unique product in whole industry. But, this strategy will with a high cost price. The focus strategy is attack of a particular customer group or specialist regional market, its purpose to design the service for a particular target. Consequently, the companies need to consider the internal and external factor condition, such as: factor condition, demand condition, related and supporting industries condition, and firm strategy and rivalry. They are called diamond system. This dynamic system gives the company a standard to measure theirs advantage and disadvantage before they enter foreign market. Moreover, the specific advantage in Internationalisation of Production is give companies a new choose for exhausted market (Strange,S. 1992). In an international environment, the companies will face more uncertain and unequal condition than home market, therefore the companies need keep the attention of more factors:
Being the world 's largest economy, the United States is also largest exporter and importer of goods and services. American economic growth relies heavily on trade. According to a recent report on NAFTA, “Since 1992, nearly 20 million new jobs have been created in the U.S., in part due to the 1994 NAFTA agreement. Total trade between the NAFTA partners -- the U.S., Canada, and Mexico -- rose from $293 billion in 1993 to more than $475 billion in 1997, and has increased since. ” (Bowman, Free Trade). It is obvious evidence that international trade is beneficial to the US economy, at least in the 1990s.
Mercantilism was a sixteenth-century economic philosophy that maintained that a country's wealth was measured by its holdings of gold and silver (Mahoney, Trigg, Griffin, & Pustay, 1998). This recquired the countries to maximise the difference between its exports and imports by promoting exports and discouraging imports. The logic was transparent to sixteenth-century policy makers-if foreigners buy more goods from you than you buy from them, then the foreigners have to pay you the difference in gold and silver, enabling you to amass more treasure. With the treasure acquired the realm could build greater armies and navies and hence expand the nation’s global influence.
There are four international competitive strategies that include: global standardization, localization, transnational, and international. Global standardization is a business model based on pursuing a low-cost strategy on a global scale. Localization, on the other hand is a strategy that is focused on increasing profitability by customizing the company’s goods or services so that the goods provide a favorable match to tastes and preferences in different national markets. Moving on transnational strategy, which is a business model that simultaneously achieves low cost, differentiates the product offering across geographic markets, and fosters a flow of skills between different subsidiaries in the company’s global network operations. Last of the international competitive strategies is the international strategy which involves making products at home, while leaving other functions to foreign business units.
In the recent years, business become more larger due to the advancement of technology, a renewed enthusiasm for entrepreneurship and a global sentiment that favors international trade to connect people, business and market. The economist emphasize about the international trade can increase the production of goods and service, increase the demand from the consumer in local or international, the diversification of goods and services and the stability in the supply and prices of goods and services. As a result, it becomes the main part of the international business and motivated countries to trade with borders. The United States implied the government intervention since the great depression through the financial sector rescue
3. The leadership qualities of founders and highly skilled labour from Taiwan gives more power to company. Moreover use of latest technology also built up their abilities.
Any country should use porter diamond theory of national advantage. It's designed to help understand the competitive advantage nations. It suggests that the national home base of any organizations are playing a supportive role in shaping the size or scoop to which it is likely to achieve advantage on a global scale. This home base provides basic factors, which support organizations from building advantages in international competition. Porter classifies four determinants: Factor Condition, Diamond Condition, Relatives & supporting and Structure, strategy & Rivalry. Egypt government acts to catalysts to improve Egypt position in a globally competitive economic environment. They found that they can create new factors such as skilled labor and high technology (Porter M., 1990). Porter's diamond model suggests threat there are inherent reasons why some nations are more competitive than others on an international market. Another factor that influence in competitive advantages such as the policies that put by government. One of the most influencer policies is (FDI) Foreign direct investment