I need some help answering these questions please. 1. Using Porter’s four determ
ID: 1102307 • Letter: I
Question
I need some help answering these questions please.
1. Using Porter’s four determinants of competitive advantage, describe how a business may use the trade theories to develop its business strategies.
2. Why is it important to understand political and legal factors of countries that you want to deal with when trading Internationally?
3. What are three factors that impact a company’s decision to invest in a country? What is the difference between vertical and horizontal FDI? Give one example of an industry for each type. How can governments encourage or discourage FDI?
4. Identify at least two ways culture can impact a Business. Be specific and PROVIDE EXAMPLES. Explain some of the challenges that could materialize (i.e. decision -making, negotiating, etc.) and generate some ideas on how you would help to resolve the problem in specific ways
Explanation / Answer
Answer 1:
Micheal Porter gave the Diamond theory of national advantage which states that features of home country are crucial for the success of an organization in international markets. It describes factors that are necessary for the success of an organization in global industries -
1. Factors of Production - It includes inputs that are necessary to produce goods and services. The main factors are natural resources and labor. South Korea lacks in natural resources but has comparative advantage in skilled labor.
2. Demand conditions - The increased demand for the product constantly persuade the customer to purchase more and thus domestic organizations constantly improve the product.
3. related and Supporting industries - There are mainly related to innovations that helps in producing the product at lower cost.Growth of automobile encourages the growth of steel industry.
4. Organizational Strategy, structure and rivalry - They help in setting new goals, managing operations and generating innovative ideas in organizations.