This includes Economies of scale, competition and investing. Economies of scale: With an expanded market, member countries can penetrate local industries and other member countries more freely, enabling producers to obtain scale benefits, eg. Increase in production to reduce unit cost of products by specialization (labor and capital). Competition: An expanded market can promote competition among manufacturers in a trading block. Local manufacturers must become more competitive or may run out of business with less limited trade.
In consequence, there were some technological advances that were necessary and that finally reduced the costs of transportation and communication. With the ease of entry of imported products in the country, there was an increase in supply and improved the quality of national products. Thus, imported products became cheaper and nationals had a improves. Besides being a great enabler source of jobs. According to Intriligator (2003) other important advantage is that companies are able to increase their size to multinational and international level.
To be able to share this product with its partners will give Etihad a potential advantage in attracting customers, particularly given the importance of the virtual network. Conclusion The rapid expansion of the group’s network and access to newer and larger markets is a benefit to all parties. Through the Etihad Partners, Etihad Airways continues to accomplish its own success while boosting the business of the other airline partners with mutually-beneficial alliances, some of which may not have been able to survive without Etihad’s intervention, or would have been relegated to a more marginal status if involved with another investor. Despite the recent trouble regarding regulatory authorities in both Europe and the US the strategy is moving full steam ahead unabated. Strong organic growth by Etihad is aided by extensive commercial partnerships, strengthening the carrier’s hub through a lower capital investment approach.
Diversification in another economy will reduce the risk. Economic, political and social factors can play important factor in company’s success 3. Bigger market size will lead to greater sales and profits if market expansion set up successfully and foreign market entry is chosen correctly. 4. Having operations in different countries, it requires better understanding in cultural and social differences.
Free trade agreement allows the agreeing nations to focus on their comparative advantages and to produce the goods they are comparatively more efficient at making, thus increasing the efficiency and profitability of each country. 4. OBJECTIVE OF FTA Free trade agreements typically concern on import & export terms imposed by both agreeing countries. For instances, Import tax, it is one of the critical tariffs, it can impact the market directly, making the imported goods more expensive. Thus, the existence of FTA is to negotiate with partnering country to lower their import tax.
However, another aspect believes that entrepreneurship has a positive effect on the creation of job opportunities, which thus decreases unemployment rate. Entrepreneurship is also able to improve an economy through the actual products, services and technology that is introduces into a market. These new ideas boost economic growth. Innovation also creates a sense of competition within the market, which allows for the entrepreneurs involved to become creative under pressure. Competition is necessary in order to encourage either existing, or new entrepreneurs to constantly grow and improve, which once again improves the economic situation.
Specialization by countries can therefore increase efficiency in both how quickly a product is produced and the use of capital. For this reason PepsiCo benefits by saving money in production which means they stand to earn a higher profit margin when goods are sold. Imperfect Markets Theory When factors of production such as labour and other resources are immobile in a foreign country, firms such as PepsiCo can take advantage of this. As a large firm with more information and resources, they are able to enter these markets and exploit them. Product Cycle
3.2 RANGE OF STRATEGIES THAT CAN CONTRIBUTE TO A BUSINESS COMPETITIVE ADVANTAGE When a business thrives in gaining competitive advantage, it often sets eyes on a manifold of strategies that aim to em-better its image and its competitive positioning. It focuses on strategies that may help increase its rate of consumers acquisition, retention and satisfaction; strategies of industry and competitors analysis. Moreover, it sets eyes on those strategic process to build strong investments portfolios ( Liquidity) that can help establish longevity and leadership in the market. Competitive advantage inevitably leads to faster, continual exponential growth, increased sales, market share gains and overall business profitability. Competitive
According to Dogra (2011), there are many benefits in terms of economic growth to a country. Immigration is a process which increases consumers by a large percentage. Furthermore, it is very beneficial for companies to get profit and sell their products in their relevant field. In addition to it, more and more immigrant’s leads more sales taxes it helps to a country to boost their economy. Insurance is also a advantages thing as well as increasing loans, real estate taxes for a country.
Thus, making employees be more productive. However, integration of international markets have led to costs for some companies and as well as it benefits others. Therefore, these are a result of three effects of globalization which are the expanding of markets, cheaper resources or perhaps a mixture of the two. ii. Technology: every organization can have the advantage of technology; reason for this is that technology helps organize the work environment.