Advantages And Disadvantages Of Local And International Trade

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In this section I will be discussing the advantages and disadvantages of local or international trade with specific reference to Illovo Sugar, a South African company. Local trade can be defined as the buying and selling of goods and services within the boundaries of a country where international trade is just an extension of local trade and it takes place outside the boundaries of the country (TRADSA, 2015:5). The company I will be relating to is Illovo Sugar. Illovo sugar is a company that sells sugar and sugar substitute products and is based in Durban. They engage in international trade. Illovo sugar is Africa’s largest sugar producer but still has many local and international competitors such as Tongaat Hullets and Imperial Sugar Company.
Local and international competition impacts the operations
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Even though competition helps a company to stay productive and effective the more competition there is in a market the less sales you will have.
Another disadvantage for Illovo Sugar is that the South Africa government does not provide any form as assistance or subsidies. They now have to compete against international companies who receive export subsidies from their government. The implication for Illovo Sugar is that they now have to compete against very cheap prices without having any form of assistance what so ever. Overseas companies can sell sugar at a cheaper price that what Illovo Sugar can produce it locally. This leads to Illovo losing customers and profits.
Competition can also influence a company to become part of criminal actions or work . examples of this is when a manager bribes a supermarket manager to give Illovo Suger more shelf space and then tip him/her for it.
A competitive environment creates an atmosphere of survival of the fittest. This causes many businesses to disregard the safety of the general public to increase the bottom line (

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