Swot Analysis Of International Trade

CHAPTER I: THEORETICAL BACKGROUND Export is a vital part in international trade which has been going for thousands of years. That a country has any product to export means there is at least one other country to import that product. Then international trade happens; in other words, international trade is the exchange of goods and services which may be tangible and intangible across national boundaries for maximizing their economic profits. It creates opportunities for countries to be involved in the international division of labor, economic development and enrichment for themselves. In many trade-dependent countries, export turnover occupies a large percentage in GDP. Chapter I will cover an overview of export issues including the definition

In fact, export as well as domestic sales activities are both the process of exchanging goods. Taking the forms and extent into account, however, export has many different characteristics from domestic sales that exporters need to be concerned about. Le Ngoc Hai (2013) listed four main characteristics of export. Firstly, partners taking part in exporting are foreigners. Therefore, when wanting to serve their demands, exporters cannot apply similar methods as used in selling domestic goods. The reason is the differences of language, lifestyles, standards of living and traditions between foreign customers and domestic ones. This leads to different demands and ways of consumption. So exporters need to study importers’ need and want to best give them favorable

In other words, trade will be beneficial even if one country is less efficient in the production of two goods, so long as it is less inefficient in the production of one of goods. Due to the increasing development of production forces and the larger extent of specialization, the number of goods and services to meet human needs and wants has been more and more diversified, leading to interdependence among nations. In other words, specialization promotes trade demand and vice versa. A country cannot specialize its production without trading with others. It is international specialization that gives a manifestation of comparative advantage rule. This rule emphasizes the difference of production cost that is the key of trading. When participating in export, a country tends to export a product that is produced with the least disadvantages and import goods that do not have comparative