What Are The Advantages And Disadvantages Of Export Subsidies

2 Reduced waste: With improved systems there would be reduction in waste and fewer defects in the products. This will help in adding to the profits. Logistical improvements will help in better organisation of physical space required and viable transportation and reduction in the waiting times for the materials required, thus giving lesser room for wasting time.

Some Major benefits of international trade include the reduction of poverty, expansion of business opportunities for local companies and reduces costs for consumer.

Subsidies are defined as a sum of money granted by the government to support an industry or business so that the price of a good or service remains low and therefore competitive. (Oxford Online Dictionary, n. d.) Nevertheless, subsidies can vary in their form and the most common ones are for example direct payments in cash or kind, governmental provisions of goods or services of prices below the normal market price, governmental purchases of goods or services in excess of the market price and tax concessions. (Britannica, 2014) Consequently, subsidies are crucial for business sectors, such as agriculture, energy and transportation as a way of financing their operations and thus offering products to affordable prices. Especially, the primary

Trade liberalization inspires economic growth, and ensures sustainable prosperity for everyone. The reduction and removing of tariffs has made materialistic goods like food and clothes more available and affordable to countries that are developing and have low GDP per person. For example, the average Kenyan

3. To demonstrate how a company can gain competitive advantages through a low-cost strategy and how

By reducing number of products carried, the firm will be able to differentiate them better, allocate marketing budget to most profitable products, and, therefore, increase brand recognition. Additionally by focusing on fewer products, they will be able to gain economies of scale and spread their high fixed costs.

More efficient product and logistics by having to put a good deal of time and effort into making the production and logistics more efficient by reducing the number of production platforms, increasing productivity, reducing inventory levels and increasing delivery

11). This is true but with governments like China sometimes we need to have trade restrictions in order to limit their advantages.

of climate are lessened, the quality of the subsequent product is more reliable, less labor is needed to

| * Low cost (competitor) * Labor cost * Strategic Marketing * Low waste * Lower overhead

Strategies of our firm In oligopoly market, one important method to increase the market share is to keep the price lower than competitors price. However, because at the beginning of the game, our firm ignored the importance of the plant size, process improvement and the training, our production cost was higher than other firms. So we could not use the

By reducing the introduction of new products, cost such as product development, R&D and advertising can be avoided.

Some advantages of free trade; Free trade occurs when there are no artificial barriers put in place by governments to restrict the flow of goods and services between trading nations. When trade barriers, such as tariffs and subsidies are put in place, they protect domestic producers from international competition, rather than create trade flows. It is also beneficial to consumers as they can gain great amount/variety of goods and services.

2)Companies get to be imaginative in finding new items to offer or produce and less costly approaches to achieve their objectives.

I’ve just discussed how limiting imports can hurt a country’s exporting. Now let’s discuss how imports can be limited. Tariffs are basically taxes that are put on imported goods upon entrance to a country. These taxes are put on imports usually because the domestic producers in the market feel that they will not be able to compete with the foreign competition. This is usually because the foreign producer can produce the product for much less than