[Synnen]

Help! It's due tomorrow, and I have to finish it tonight.

I need to find two examples of how the different forms of competitive advantage affect domestic and international business.

I don't get it. I'm seriously frustrated, because I can't see a way that it DOESN'T affect business on any level, yet I can't come up with a single example to use in my paper.

I'm sitting here crying in frustration, and my prof is no help.

Can someone make this make sense to me?

[Wondergirl]

Let's think this through. "Competitive advantage rests on the notion that cheap labor is ubiquitous and natural resources are not necessary for a good economy. The other theory, comparative advantage can lead countries to specialize in exporting primary goods and raw materials that trap countries in low-wage economies due to terms of trade."

[Synnen]

Right... I get the differences between absolute advantage, competitive advantage, and national advantage and how they affect international business, and especially how they affect whether a country/company is in a position to profit from international advantage.

What I don't get is examples of how competitive advantage affects international business and domestic business.

I mean, isn't EVERYTHING an example, in a way?

[Wondergirl]

Did you figure it out?

[Wondergirl]

Is there a country that has cheap labor and few natural resources?

[Synnen]

All I'm coming up with are reasons a company couldn't/wouldn't be in a position to be internationally competitive. The Flying Fish Company in Seattle, for example. They CAN ship internationally, but kind of the whole point of their business is that they're local and fresh. So while they have a good competitive advantage domestically, they wouldn't internationally, simply because their product isn't conducive to international marketing.

Am I completely lost here?

[Synnen]

A LOT of countries have cheap labor and few natural resources, or at least if they have the natural resources, they don't necessarily have the money to get to them.

Armenia, for example.

[Wondergirl]

How's business in Armenia? Domestic? International?

[Synnen]

Ummm... not sure offhand. Let me go look that up.

[Wondergirl]

China has both cheap labor and scads of natural resources. What does that say about how China is affected domestically and internationally?

[Synnen]

Okay, it's doing better than it had been, but it's still extremely dependent for outside resources, especially fuel and energy sources.

So it does not have a competitive advantage over anyone, really.

This is due to a lot of things, though--and I think this is where I get confused. The 88 earthquake, the breakup of the USSR, and the 20 year border battle pretty much left most of the country in poverty. Lack of central govt didn't really help much, either.

So... how does that work, then? Their domestic business is doing all right, with a lot of new construction and services replacing their old agricultural lifestyle. But with their lack of resources they're pretty much completely unable to compete internationally. They simply don't have the money or resources to invest in it, and their lack of a stable and competitive energy supply leaves them completely vulnerable.

[Synnen]

Ps... sorry for the horrible grammar... I'm so frustrated and have had such a horrible day, my head is killing me... I'm just being really thankful for spelling and grammar check tonight.

[Synnen]

Oooh... would another example be that of off-season veggies and fruits from countries like Kenya to Europe and the US?

[Wondergirl]

Good re Armenia -- your last paragraph.

[Wondergirl]

Oooh...would another example be that of off-season veggies and fruits from countries like Kenya to Europe and the US?

Okay. Explain. Or veggies and fruits from poor countries in the Southern Hemisphere, say, S. America. Or S. American countries that have huge populations and no domestic ways to use it to their advantage -- so what do they do?

[Synnen]

Kenya is the leading supplier of fruit and vegetables to Europe and the United States during their off-seasons. While Kenya doesn't necessarily have a comparative advantage OVERALL in vegetables and fruits, during the off-season they are able to provide a commodity that is more expensive and harder to do in the northern climes. The cost of shipping is easily overcome by the worth of the produce. In other words, they don't have a comparative advantage in volume overall, they have almost an absolute advantage during the winter months when much of the land given over to produce in the US and UK is frozen.

[Wondergirl]

Yay, Kenya!

[Wondergirl]

e.g. Kenya -- "Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors."

Then there's tariffs and taxes, etc.

[Synnen]

Oh lady, thank you so much.

I guess I DO get it--I just couldn't think past the end of my own nose.

Thank you thank you thank you thank you.

When I graduate, I'm saving you a seat of honor. I am starting to think that you're my Heroine of Homework.

And thanks for not just giving me the answer. The way you walked me through it helped me to understand it soooo much more.

I really can't thank you enough.

[Wondergirl]

I used to be a teacher and tried to make my students think. :D