INTERNATIONAL TRADE

Managing International Trade



Managing International Trade

Brief Synopsis of the Issue

The company named EECO woks on the philosophy of production that is quality that is why the company should compete in the international market as there is a scope for the country to work in the international environment and compete due to the quality products provided by the EECO.

Recommendations

The EECO is the quality focus so the company should go and explore the international market which means that the EECO has the opportunity of export. This export of the shoes not only gives new ways, regions and country to work in but also increase the customers that will directly affect the sale and the income of the business.

Background

EECO is the company that deals in the shoe industry and providing quality products to the market. Now the company is working efficiently so it should compete in the international market or in other words the EECO should export the products to the international markets as there are various benefits of this strategy like the expansion of the business to the international world. The EECO have a philosophy that is quality is the only thing that endures. That is why the company constantly works to create the perfect shoe so good that the customer forget that he is wearing it. It has to be light and solid, designed on the basis of the newest technology and knowledge about comfort and materials. ECCO have to be the world's best shoes-shoes with internal values. So the company has a good chance to explore the international market and export its products.

Research on the Assessment Topic

Trade Theory

Absolute Advantage

One simplistic view of world trade would be to expect that whatever country is “better” at producing a good in some absolute sense will end up specializing in the production of that good. Was this the case, it would spell bad news for poor developing countries considering opening up their borders to free trade. Because industrialized countries such as the United States have high levels of productivity across all sectors, a less technologically advanced developing country would have no hope of competing in a free trade environment if absolute productivity levels were all that mattered. For example, consider the United States and Mexico. Suppose that one laborer using U.S. technology can produce a computer in 2 hours of work. That same person working with U.S. agricultural technology can harvest a bushel of corn in 1 hour. Now suppose that in Mexico, producing a computer takes a person 12 hours, and harvesting a bushel of corn takes 3 hours. In this example, Mexico is slower at producing both computers and corn. We say that the United States has an absolute advantage in producing both goods because it can produce each of them at a lower cost (measured in person-hours) than Mexico. (Bartlett & Beamish, 2011)

Comparative Advantage

The past studies show that a British economist named David Ricardo turned this idea of absolute advantage on its ...