International Markets and Comparative Advantage

International Markets and Comparative Advantage

There are four steps of screening potential markets and sites. The first step is the identification of basic appeal which determines the resource availability. The second step entails assessing forces which may influence the business which include National environmental culture, political forces, financial forces, governmental forces and transport cost. The third step is to measure the size of the market and how it affects the business which includes all the potential resources and emerging issues (Wild & Wild, 2013). The final step is market selection whereby you should analyze the competitors in the international market.

In order for one to be able to conduct an international market he or she should be able to understand market research first. Market research therefore, entails the analysis of information collected which is helpful to the managers in making decisions which in turn will be used in assessing both the market and the sites. International market research offers variety of information which include politics, business environment, regulations potential size, buyers and other information (Weber, 2010). It is therefore, important to conduct market research in order to gain information about marketing strategy and the buyer interests. Designing market strategy information helps in understanding new market sites, buyers’ altitudes and opportunities for competitors.

The researchers should understand unique circumstances in the market in order to be able to cope with difficulties during the research and also after research. For research data to be reliable, organizations must be aware of various difficulties. Availability of data is one of common issues experienced in market research. Agencies that have internationally established themselves provide the most important and useful information (Wild & Wild, 2013). Data comparability from other countries should be screened well before use as some information may differ from country to country. Cultural problems are also experienced when the researchers are working in a new environment. This may lead to information misinterpretation. Hiring the locals as researchers may give the best information as they have already familiarized with the area and know how reliable the data is.

Comparative advantage can be defined as the ability of producing goods and services at a minimum opportunity cost. It is not a must for an organization to produce great volumes, what is more important is the production of goods and services at a lower rate. Comparative advantage was clearly shown between the Portugal’s wine business and England’s cloth business. On the other hand, comparative advantage of china to United States is demonstrated from the cheap labor they receive. The goods and services produced in china are simple and manufactured at lower cost. US produce goods and services at lower costs but specialized and capital-intensive workforce (Weber, 2010). These working techniques impact highly to the development of these nations. Comparative advantage also helps different people to realize their potentials in different localities and be placed where they best fit.

In conclusion, wages enable different people to realize their comparative advantage whereby various wages helps to drive different workforce to their best positions. Organizing labor in a more efficient way allows for more gaps providing greater opportunity costs. Diversity in workforce provides advanced skills in the international market providing greater opportunity. Terms of trade have got various impacts to the economy whereby these impacts may be negative or positive (Ragan, 2014). Terms of trade in the nations that import goods decrease with time.

References

Ragan, C. T. S. (2014). Microeconomics (14th Canadian ed.). Don Mills, Canada: Pearson Canada Inc.

Weber, R. H. (2010). Internet of Things–New security and privacy challenges. Computer law & security review, 26(1), 23-30.

Wild, J.J., & Wild, K.L. (2013). International business: the challenges of globalization (7th ed.). Upper Saddle River, N.J.: Pearson Education Inc.