RSM100Y1 Chapter 4: Competing in World Markets
Document Summary
Take advantage of large populations, healthy resources, rising standards of living abroad that increase foreign interest in good/service. New market for products, access to more resources. Companies expand markets and grow, more efficient production/distribution systems. Accept risk involved with trade if advantages are anticipated. So much supply that law of supply or demand would push price down at home. Sell to other countries who are willing to pay more. One factory with three shifts more efficient than three factories in separate locations. Trade depends on factors of production abroad availability, price, quality of labor, natural resources, capital, entrepreneurship. Highly qualified engineers, computer scientists from indian universities. Different countries at different stages of development, business cycle. Falling demand in one country countered by growing demand in another. Large population does not equal high demand, economic prosperity. Even with lower income, developing countries represent opportunity because of rapid growth and large population. Balance of trade: difference between exports and imports.
