【internationalbusiness4Twomacrofactorsseemtounderliethetrendtowardgreaterglobalization.Thefirstisthedeclineinbarrierstothefreeflowofgoods,services,andcapitalthathasoccurredsincetheendofWorldWarII.Thesecondfactoris】
internationalbusiness
4Twomacrofactorsseemtounderliethetrendtowardgreaterglobalization.Thefirstisthedeclineinbarrierstothefreeflowofgoods,services,andcapitalthathasoccurredsincetheendofWorldWarII.Thesecondfactoristechnologicalchange,particularlythedramaticdevelopmentsinrecentyearsincommunication,informationprocessing,andtransportationtechnologies.
7Inapuremarketeconomyallproductiveactivitiesareprivatelyowned,asopposedtobeingownedbythestate.Thegoodsandservicesthatacountryproduces,andthequantityinwhichtheyareproduced,arenotplannedbyanyone.Productionisdeterminedbytheinteractionofsupplyanddemandandsignaledtoproducersthroughthepricesystem.Ifdemandforaproductexceedssupply,priceswillfall,signalingproducerstoproduceless.Inthissystemconsumersaresovereign.Thepurchasingpatternsofconsumers,assignaledtoproducersthroughthemechanismofthepricesystem,determinewhatisproducedandinwhatquantity.
12Portertheorizesthatfourbroadattributesofanationshapetheenvironmentinwhichlocalfirmscompete,andtheseattributespromoteorimpedethecreationofcompetitiveadvantage.Theseattributesare
○Factorendowments---anation’spositioninfactorsofproductionsuchasskilledlaborortheinfrastructurenecessarytocompeteinagivenindustry.
○Demandconditions---thenatureofhomedemandfortheindustry’sproductorservice.
○Relatingandsupportingindustries---thepresenceorabsenceofsupplierindustriesandrelatedindustriesthatareinternationallycompetitive.
○Firmstrategy,structure,andrivalry---theconditionsgoverninghowcompaniesarecreated,organized,andmanagedandthenatureofdomesticrivalry.
13Atariffisataxleviedonimports.Tariffsfallintotwocategories.Specifictariffsareleviedasafixedchargeforeachunitofagoodimported(forexample,$3perbarrelofoil).Advaloremtariffsareleviedasaproportionofthevalueoftheimportedgood.TheEuropeanUnionhasimposedsuchatariffonimportsofbananasfromLatinAmerica;thetariffamountsto15to20percentbyvalueonthefirst2.5milliontonsofimportsofbananasfromLatinAmeric