Exam Questions Essay

move on countries, which have the capability to enter, as n separate(a) as broad(prenominal)-income levels and mass consumption, get out deceive the item first to its republical merchandise, consequently ordain buzz off initial exportingers of good enoughs to some early(a) technically advance countries. by and by the harvest-festival break downs adopted and use in the knowledge do primary(prenominal) securities manufactures, action gradually moves away from the level of origin. The advanced(a) filthed estate loses their exports initially to under substantial countries (who leave alone import and later violence these goods) and subsequently to less developed countries.Eventually, the certain advanced surface bea (original innovator) will become importers of these goods because they will have begun producing opposite bargon-ass harvest-times. The duration of each exemplify of the pass varies with the mathematical harvest-feast and the type of m anagement accompaniment(a) it. Understanding the harvest-tide life-cycle spots al sufferings a smart set to fully take profit of businessplace opport building blockies by either strengthening or protect a militant advantage d i a long-lasting throw aim. The chief(prenominal) usiness reason for extending the harvest life-cycle would be to accession gross r level(p)ue through longer globe in the commercialize placeplace. Certain consumers will brood a harvest-home at divers(prenominal) stages of the output life cycle so by extending each stage of the cycle, in that place is a better determine of moving-picture show to the targeted consumer group. A frequently used archetype of this is the invention, modernize and merchandise of the individual(prenominal) computing device. exhibit one is considered the naked product stage and this is where domesticated production essentially begins.After a period of look for and development, a new product is en foldd to pertain local anaesthetic anesthetic (or national) quests. The product is created, proved and consumed in the domestic commercialize and virtually no dole out takes place. During the inception phase, the innovating caller-up does non know the finale to which a profitable mart exists. For vitrine in the late 1970s and into the early 1980s, during the early stages of the personal data processor, IBM and Apple pcs were produced in the US and aimed for part and small business use.Personal information processing system use spread quickly passim the domestic market as to a greater extent(prenominal) and more households do leveragings for increased personal productivity and gaming purposes. In stage twain, the maturing product stage, domestic production peaks as the motivation for the product signifi give noticetly increases since the consumer dish begins to acknowledge the product value. This stage is sensory faculty by a period of growth as sales and a modernize in shekels as mass-production techniques be developed and distant demand expands (developed countries).At this stage the product is now exported to early(a) developed countries and some(prenominal) domestic and foreign competitors emerge. A copy product is produced elsewhere and introduced in the home country (and elsewhere) to delight growth in the home market. base on production be, manufacturing moves to some other countries. As was the case with Apple PCs, production in this stage moved come forward of the original facility and into manufacturing plants in atomic number 20 and Texas as surface as scattering w arhouses in two the US and the Netherlands. compass point three is the beatized product stage. This is when the market for the product stabilizes and domestic production trance downs. The product becomes more of a article of trade and companies argon compelled to reduce manufacturing prices which is the main reason for moving production sites t o countries with dishonor labor equals. As production moves to developing countries, in turn, they begin to export the product to developed countries. A product color phase is experienced as sales level off and the first signs of reject occur.In the personal computer industry, the US market low- legal injuryd brand-name imports from producers such as South Koreas Hyundai and Samsung. Several minute manufacturers exported millions of personal computers both to the US and other countries, a self-aggrandizing pile which ar produced for foreign distri hardlyors. To contest this, Apple condensed their product line, expanded use of industry standard move, outsourced component manufacturing and streamlined warehousing operations. there is a final stage of decline in which poorer countries constitute the only markets for the product and import challenger is genuinely healthful.At this point, al almost all declining products are produced in less developed countries. The PC is no t necessarily a good shell of decline, for one because there is a fainthearted demand for computers in less developed countries, but sort of an example of engineering science that is ever improving which would make primarily versions of computers and tie in bundle package obsolete. Normally, a product may finally disappear from the market at this point, however, PC technology get across to improve. There is no threat of the PC disappearing, but certain versions will finally become dinosaurs. . Explain door play alongers infield in terms of Nokias development as an foreign alert telecommunication powerhouse. Michael Porters conjecture of national hawkish advantage manakin was the product of a study of patterns of proportional advantage among industrialized nations and looked at sources of emulous advantage from a national context. The rhombus-shaped surmise back end be used to appreciate both a fasts ability to sound in a national market as well(p) as a na tional markets ability to compete world-widely.Porters surmisal of international trade comes from the interaction of four country- and loyal-specific elements 1. Factor conditions this is a countrys legacy of production factors that affect its ability to compete on an international level such as human preferences, physical resources, knowledge resources, and so forth Porter looks beyond the most fundamental factors of land, labor and capital to take the educational level of the do cash in ones chipsforce and the quality of the countrys infra anatomical structure. 2. Demand conditions demand in the home market helps the comp either to establish a war-ridden advantage.A passing developed domestic market will printing press a firm to innovate faster and to create more advanced products than those of competitors. When the domestic market for a token product is with child(p)r locally than in foreign markets, the home firm will devote more attention to that product which l eads to a competitory advantage when merchandise begins. 3. link and permiting industries these related and supporting industries extend cost-effective inputs and participate in the suffice of upgrading which serves to stimulate other companies in the strand to innovate.When local supporting industries are competitive, the home firm experiences more cost-effectiveness and creative activity. This effect is reinforced when the supporting industries (suppliers) are strong competitors as well. 4. Firm schema, structure and arguing the way in which companies are created and managed are authorized for success. The presence of rival in the domestic market is big because it creates pressure to continually innovate in evidence to promote competitiveness.Other conditions that affect the diamond scheme are G everywherenment simply the g overnment git influence the proviso conditions of key productions factors, the demand conditions in the domestic market and the competitio n betwixt domestic firms. The government faecal matter overly put in on several different levels (local, regional, national, international). -Chance clearly, chance events will occur that are external the control of the domestic firm. Chance is important because it tummy create or chop off competitive billets.Porters Diamond in terms of Nokia Factor conditions -Finland is one of the grounds most homogenous and invariable societies as well as having genuinely sophisticated consumers -As a country, Finland has invested gold into a strong educational governance which gives them an excellent educational system with which to provide the necessary work force -Finland has a uniform, market-oriented government Nokia, with close ties to national government, has helped actuate technology, legal issues and export opportunities.Finland as a whole has a national competitive strategy -Substantial public investment in telecommunications-related R&D which focuses on radio receiver t echnology -Finland has a tradition of advanced engineering and telecom industry -Due to caustic physical and natural conditions, options for a land- ground fit out system was a truly pricy option, making wireless digital systems a relative bar pile up for the same price -Most of the population speaks English -Finland was an early adopters of the lucre and other wireless activities.Demand conditions As mentioned in the Factor Conditions, a sparsely populated celestial sphere supports adoption of wireless devices -The weather and physical supports mobile forebode over face-to-face conversations -Nationally, a telling usage of texting and other wireless capacity services -Finland a test market for wireless applications -Nordic Mobile Telephone created the worlds largest single mobile market. Related and Supporting industries Huge R&D expending by government and companies Finland, as a whole, offers strong venture capital, and a strong manufacturer network -Due to the cons titution and claim of wireless communication, there is a high number of specialized companies cod to fragmented market -There are more or less 3,000 Finnish firms in telecom and IT related products and services -There is a large local supply allowing for highly customized contributions Firm strategy, structure and disceptation Signifi set upt historic reasons for highly competitive landscape within Finland -A very strong export-centered commerce experience stouthearted network and links between companies, banks and governments -The regional Development Agencies Act favors intense rivalry -History of competition in telecommunications services passim the 20th century -Finland was early to exempt in telecom-related industries -A high number of telecom firms create an active local rivalry in wireless communications -There is no monopoly on either of the value chain parts of telecom and a very healthy competition between companies -European consumer demand (roaming, etcetera Fi nland has been a part of the European Common Market since 1995. Other conditions that affect the Diamond Theory Government oVery stable with a long-term view (low turn-over with 6-year terms) oStrong initiatives to improve national innovative capacity oAssurance of technological neutrality oOpen socialist scrimping -Chance oConditions in Finland provided a grotesque medium for Nokias success. Creating, maintaining and updating land-based wired communication networks can be very slow and very expensive which made wireless digital systems seem a virtual bargain. . What is un flack catcherable Advantage and how does Intels world-wide suppose in mircoprocessors reflect this? Adam smith developed the theory of unassailable advantage which asserts that one party (a nation, a firm, etc. ) reachs from manufacturing more output than others since it is possess a unique resource or commodity. This crabby resource or commodity can be a certain method, a distinct knowledge or manufac turing process that increases production efficiency, and thus reduces the relative motivation for additional resources.The theory holds that different countries (or firms) produce some goods more effectually than others based on those particular resources or commodities. Limitations to the theory exist if there multiple unique resources or commodities once the hypothesis expands to include multiple unique resources, the secure would turn to a comparative advantage. Generally, in international trade, countries export goods/services when they have an infinite advantage in that product area and will import goods/services when another(prenominal) country (or firm) has the absolute advantage.Intel and Dell had a unique relationship in this pick up Intel had set the industry bar in terms of microprocessors and Dell, using Intel soaply, became one of the strongest PC manufacturers in the world based on their distinctive marketing tool of create computers. Both firms benefited from this relationship as they both had an absolute advantage on the items they produced. Further, jibe to the theory, if a country (or firm) has no absolute advantage in any product or service, no trade will occur.For instance, if both Intel and Dell manufactured microprocessors and PC hardware, no trade would exist between them they would be direct competitors since no benefit would exist to either of them. A competitive advantage occurs when a firm acquires or develops a product or frisk that allows it to outperform its competitors. To gain competitive advantage, the firm strategy is to manipulate that unique resource or commodity over which it has a direct advantage which gives them the ability to collapse a competitive advantage.Superior proceeding outcomes and superiority in production resources reflects competitive advantage, and in doing so, gives a firm absolute advantage over an industry (or product). In the case of Intels ball-shaped position in microprocessors, their s trategy has been to continually introduce cutting-edge technology which ultimately heart and soul that consumers endure for the research and development of the speeds of new chips. It is a cyclical process, which demands more research and development of even faster, smaller products. The high society does this to constantly renew consumer need which helps keep margins high.This business model of Intels can be compared to the auto industrys planned obsolescence. The introduction of new models authority the previous model is not as good, or new, anymore. As such, consumers feel compelled to purchase the newest, latest, greatest product. The trends are pushed by more powerful applications, which in turn create the need for new stronger, faster microprocessors and other new generations of computer products. Here are some of the contributing factors in Intels absolute advantage in the microprocessing industry 1.Distinct ability to draw a prevailing share of the markets attention In tel benefited from a very exclusive and significant relationship with Dell (Intel privileged) until May 2006. With Dell be a major player in the computer hardware market, they offered custom-made computers with an exclusive organisation to offer only Intel processors inside. 2. Capability to claver innovative obstacles which created more labor for any competition Not only did competitors already struggled to meet specs for the industry standards, they also experience issues keeping up with Intels production speed and product features. 3. set about costs down and keep remuneration up Intel was able to make its partners (and consumers) pay for this with an ordinary selling price of over $150 a unit. PC makers had to require this because at the time, Intel was only choice. 4. Strong news report as the reliable standard PC makers and consumers had not reason to look for ersatz processors based on Intels innovation combined with the lack of reliable parts produced by competit ors. 5. Economy of case Because the per unit cost of manufacturing depends on the size of the firms output, the larger the firm, the greater the home plate of manufacturing benefits.Due to Intels economy of scale in the microprocessing industry, they could potentially monopolize the industry. found on Intels strengths mentioned above as industry attracters (2) as well as their ability to drive costs down while keeping profits up, Intel was untouchable and could manage to win any price war brought on by the competition. The Intel quality was also so high that the unreliable chips made by the competition almost, until recently, didnt even create lots of a price war since there wasnt another game in town. 4. Explain Comparative Advantage? therefore describe the development of Indias software industry and how it reflects one theory of competitive advantage. Comparative advantage theory is an international trade theory attributed to David Ricardo that indicates that firms or nations trade because they have superior productivity in a particular industry and can produce that particular good or service at lower bare(a) and opportunity costs than another party. In simple terms, this theory explains how trade can create value for two parties even if one party can produce all goods with fewer resources than the other.The prospect being that each country can gain by specializing in the goods/services where it experiences this cost/efficiency advantage and trade that good/service for another where they do not posses the same advantage. Governments may attempt to predict comparative advantage by rearing trade barriers, imposing high tariffs, and allowing newer and comparatively uncompetitive industries ample time to become established. Comparative advantage is an appropriate theory to explain why particular countries export more services that support the global supply chain of both transnational enterp turn offs and domestic firms.The source of a nations comparativ e advantage evolves from the mixing of its own factors of production such as availability of work force, labor skills, access to capital, land and technology. For example, India is an excellent example of a country that has developed a highly efficient and low-cost software industry. This industry supplies not only the creation of custom software, but also call centers for customer support and other information technology services.The Indian software industry is composed of legion(predicate) subsidiaries of multinational corporations as well as independent companies. This question focuses on the rise of the software industry in India. As a relatively poor country, India in the past has not normally been thought of as a nation that is satisfactory of building a major presence in a high-technology industry (e. g. , software). However, over the last decade or so, the Indian software industry has become an important force in the global software market.Among others, the main factors t hat have boosted India into this position are their large number of well-educated, English-speaking work force, a strong national work ethic coupled with technical experts who are paid only a ingredient of the salary (including overhead) earned by U. S. counterparts. Additionally, the low cost of international telecommunication networks hike up enhances the comparative advantage of an Indian location for outsourcing. India has a comparative advantage in those services that are tradeable such as business process outsourcing and programming services.In looking at IBMs outsourcing and how it utilizes both a US workforce and an outsourced Indian workforce, it is important to identify the relative strengths of each. For the principally technical aspects of the job, IBM realizes cost savings by using the Indian workforce. Since programming proceeds are low in India and the average productivity of Indian programmers is somewhat alike(p) to the productivity of US programmers, then Indi a can potentially enjoy a comparative advantage in programming. For those aspects of the job specializing in knowledge of a clients business, the US workforce is well-matched to do the job.The complementary nature of these two separate workforces rose out of the need of IBM to compete in more than retributory one area in order to succeed. Utilizing the Indian workforces allows IBM to realize a cost savings that can be used in other areas of their business. India, on the other hand, benefits from the trade with IBM by realizing large exercising in the country as well as a boost to the economy that will only help to act developing the country. 5. Explain briefly the common patters of successful Nipponese entry into global markets once dominated by US firms such as RCA, elope and GM.In the business world, an initial direct attack of a competitor is usually most advantageous to the defending company since the assail company usually ends up spending an exorbitant amount of resource s without ever genuinely reaching its goals. This is a prime explanation of certain large companies such as General Electric, Xerox and RCA back to the 1970s when all of them waged war against IBM in the computer market. All suffered very heavy fiscal losses and as a result, did not engage further in the computer industry.The gamble cost these companies devastating sums up(a) in the millions. A companys objective is to make use of its resources in such a way that allows them to maximize the market share. Direct attacks dont necessarily serve that purpose, but rather the indirect attack seems to be more successful. The successful market penetration by Japanese companies was facilitated by an indirect approach. As one example, Xerox was an established leader in the photocopier field and by the 70s control the copier market, controlling the majority of the markets share.However, within a decade, Japanese companies outwitted Xerox, and proceeded to follow suit in other industries ( such as the auto industry) by ingress indirect attacks on the smaller portion of the consumer base, and eventually swallowing up the entire market. The Japanese discovered that Xerox was marketing and provide large copiers mainly to only large companies. That left millions of smaller companies using more local and less known supplies to meet their copying inescapably. These smaller companies couldnt undergo by purchase on the large scale of Xerox, nor did they have the physical quadruplet to store the industrial-size equipment.Enter the Japanese market with companies focusing on this weakness and entree the market focusing on the needs of the smaller organizations. Because there was no flying effect on sales, Xerox took no notice of the market competition. As before long as the Japanese companies gained traction in this market, by focusing on the need of smaller products, lower prices, simplified technology, and diffusion through office-supply dealers, tactics began to chan ge as the Japanese continued to build upon their consumer base. The product ranges broadened with superior technology and more product choices.Towards the mid 80s, the Japanese had made a considerable difference in the size of the market share, leaving Xerox behind and struggling. The Japanese business gloss has seen significant success with a strategy of focusing in on an a smaller, overlooked, neglected, or emerging market subdivision and targeting in on the weaknesses of the competitor thereby gaining an advantage that affords a company the pocketbook it needs to make gains in the market segment. Once that grip is found, the Japanese company consolidates their products position by mobilizing all resources and expanding into the rest of the market.