Until the early 1990s, South Korea was becoming more industrialized, and it had comparative advantage in any manufacturing that needs specific technology. This could also mean that Korea had comparative advantage in electronics, heavy machinery, and other technological goods to China. However, China’s rapid growth has made it possible to transcend the comparative advantage that South Korea had in low-technology places. However, China has lost its comparative advantage in high labor - required industries because Korea also had been rapidly catching up. In Jung Taik Hyun and Jin Yong Hong’s study conducted in 2011, “Comparison of Comparative Advantage of Korea and China by Technology Level,” it is proven that South Korea has maintained a comparative advantage in high and medium-high technology products over
It is essential for foreigners or multinational companies in South Korea to understand those cultures and use them appropriately to work better with Korean employees or partners. All of these critical aspects of the Korean culture have strong influences on the way how to do business in South Korea. More and more foreigners and foreign companies have been doing business with Korean and Korean companies. For the last decade as many Korean companies become major players in global markets with their impressive performance. As foreigners and foreign companies are more involved in business with Korean and Korean companies, they would often face some difficulties of handling their daily business with Korean and Korean business people because of different expectation, practices and behaviors in each stage of business.
Low cost of resources and cheap labour causes increasing of attractiveness of China for German FDI. Germany disposes technology know-how and managerial skills which leads them to good partnership with emerging markets like China. To the Location advantages may include market potential which is huge as the Chinese consumers have significantly purchasing power. Disposable incomes can equal or exceed those of European and American consumers. Now, the number of potential customers is more than 1,4 billion (worldometers.info).
In old days, international trade was one of the hardest works because, it takes long time to carry products to other countries and has no technology to carry food for a long time too, but now, because of developed technologies, it becomes much easier to trade products. Korea is the one of the county that export and import a lot and it affects positively to Korea economy because it provides raw martial, extend the market size and create number of jobs. Therefore, Korea must continue international trade to develop economy. According to an article it states that “South Korea has a high dependence on import of capital goods, raw materials and industrial supplies. The country is also the 5th largest importer of oil in the world, with 3.074 million barrels imported per day.”(South Korea Export, Import & Trade) As the article report, Korea is the country that has no raw materials and industrial supplies geographically.
This economy is influenced by demand and supply, so the price is set by the demand of customers and the supply of products instead of the government. Countries that run with this economic system are the US and Japan. The advantages in this economy are that businesses are highly motivated by the profits to make products that customers actually want. So, customers and businesses have the freedom to buy and produce whatever they want. Another advantage is that since plenty of businesses produce the same good or service, the competition will ensure that consumers get their products or services at the best price.
These factors create the national environment where organizations compete. Each attribute affect the competitive advantage of the nation. Competitive advantage is a result for nations that create factors and then work to upgrade them. First attribute is the Factor condition, the nation creation of factors of production, natural recourses, skilled labor, Capital,
1. 2. INTERNATIONAL TRADE THEORIES 2.1. Absolute Advantage According to Adam Smith 1776) in….., a country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it. If two countries specialize in production of different products (in which each has an absolute advantage) and trade with each other, both countries will have more of both products available to them for consumption. 2.2.
Samsung is a leading company in the electronic and technological market, Samsung one of the biggest companies that produce high quality TVs,Batteries and mobile phones. So in terms of Innovation they are a top notch company. in the late of nineteens and early of the new millennium. Samsung adopt two theories to their strategic Approach. They realized that they will offering their products in different countries outside Korea.
Aided south Korean exporters make significant inroads into world markets for mobile phone In 2011, Samsung largest market share for mobile phones, smartphones and tv in china Competitive capabilities Strong technical expertise Deep understanding of markets Proper analysis and forsee trends in product divisions. Centralized management system (each division had its own mgmt. structures) Global r and d network and patents 55000 engineers and other researchers quarter- worked on robotics and semiconductors or sought new applications for advanced materials market research. Product capabilities: 2007, cell based manufacturing system that doubled productivity of their producy portfolio of digital media and communications business. Branding: 2004, Samsung electronics- brand equity valued at us $ 12.6 B increased to US$14 B in 2012 Innovation mgmt.
Porter’s Diamond for Volkswagen A Porter’s Diamond is a global tool which analyses why some nations are really good at certain industries. The diamond was proposed by Michael Porter in the mid 1980’s which proposes that countries are able to generate factor advantages for themselves. Porter’s diamond is shown below which represents four elements that Porter suggests as the determining aspects of national comparative economic advantage. One of the concepts of the model is factor conditions which refers to the resources available in the country. This would include resources such as; human, physical, capital, infrastructure and knowledge.