1. A) It’s logical that most trade groups contain countries in the same area of the world such as NAFTA which comprises of U.S, Canada and Mexico. There are a number of reasons why economic geography matters in the case of trade agreements. Neighboring countries often, though not always, share a common history, language, culture and currency. Close proximity reduces transportation costs thereby making traded products cheaper in general. Trade is likely to rise by 80% between countries with a common border, 200% with a common language such as English between U.S. and Canada, and 340% with common currency such as the euro for countries in the EU that have adopted the euro. Another strong incentive for geographically close countries to establish …show more content…
Li & Fung is a kind of 4PL which is a fourth party logistics that handles the complete end to end supply chain network. It is 4PL because the concept of a 4PL provider is an integrator that accumulates resources, capabilities and technologies to run complete supply chain solutions which is the main work of Li & Fung. Since Li & Fung source its items from various global companies, they tend to create competition among these companies. To source from a good and capable company, Li & Fung will have to concentrate on a cluster area of that particular item they intend to source. Let’s say if they want to source a better material for their cloth manufacturing, they will go to that cluster area where there will be different companies that deal in the same material. Within that particular cluster area, they will find a better company that can contract with. Cluster brings companies that are in the same industry in one geographical area. To maintain the success of a cluster, there must be competition among these companies. According to Michael Porter “Productivity rest on how companies compete, not on the particular fields they compete in.” This shows that competition brings in new companies into the cluster thus strengthen the success of that cluster. Competition and global network can also increase productivity in any cluster area because of the pace of innovations and advance technology available in that cluster
Per Kalogeropoulos (2016), the company is better able to ensure product availability while managing their costs because of their latest logistics initiative. They have recently created a network of deployment centers that reduces the time between when the product leaves a supplier to when it hits the shelf at the Home Depot store which drives profits higher. Parnell (2014), relays that companies who use low-cost strategy seek distribution channels that minimize cost. Home Depot’s new logistics initiative provides the company with economies of scale and a market advantage because it adds to their low-cost
Technological advancement is another condition that enhances complex linkage. The Apple Company should employ modern technology to link its suppliers. The method of coordinating the suppliers sho...
Trade is the most common form of transferring ownership of a product. The concepts are very simple, I give you something (a good or service) and you give me something (a good or service) in return, everyone is happy. However, trade is not limited to two individuals. There are trades that happen outside national borders and we refer to that as international trading. Before a country does international trading, they do research to understand the opportunity costs and marginal costs of their production versus another countries production. Doing this we can increase profit, decrease costs and improve overall trade efficiency. Currently, there are negotiations going on between 11 countries about making a trade agreement called the Trans-Pacific
Trade, of course, is only part of a larger network of relationships between our two countries. This network evolves in response to many complex influences, and exporters need to consider how our two countries' ever-expanding, ever-changing relationships will affect their activities. To take just a few examples:
Information outputs – They order massive amounts from manufacturers. Bulk packages sell larger quantities to consumers. The huge warehouse clubs eliminate the need for actual warehouses. At the same time, they reduce the need for handling. This greatly enhances distribution efficiency. Their large-scale membership base makes them strong.
After each order is made, the product is either picked from the store or ordered from one of the central hubs. If a product is ordered from a hub, an employee needs to track down the part, count out the correct amount of pieces, and ship the product. Once the product is shipped to the store, employees need to receive the parts and then deliver them to the customer. Behind every part bought, there is an extensive amount of labor time put into getting that product to the customer. Not only do the companies need to have labor to produce and distribute products, they need high-end technology to develop and distribute their products.
The U.S. industries have been outsourcing manufacturing for several decades now. U.S. companies thought they were reducing costs by outsourcing development, manufacturing, and process-engineering abilities. Consequently, U.S. corporations’ knowledge, skilled workers, and supply chain, which are the necessities to producing advanced products, have vanished. For example, almost all notebook computers, cell phones, and handheld devices, which were once created in the U.S., are now designed in Asia. When a major U.S. company outsource, it pressures their rivals to do the same thing. They also lose the expertise of process engineering, which would interact with manufacturing on a daily basis. Minor companies and skilled workers go to where the jobs and knowledge networks are no matter where they are geographically in the world. This decline of trade in the U.S. has caused a negative chain reaction to their suppliers of sophisticated materials, tools, production equipment, and components. U.S. industries do not have a way of coming up with new ideas for the next generation of high-tech products...
The cost advantages related to raw materials may be explained by better negotiated agreements with suppliers (perhaps due to the larger volumes of purchases – comp. Fig. 5) and possibly less shipping and distribution costs that stem from the fact that Samsung’s fab facilities are geographically collocated (while competitors’ facilities are spread world-wide). In terms of labour productivity only Chinese SMIC outperformed Samsung, but that came hardly unexpectedly: low labour costs in China had been and were to remain unbeatable for some time yet.
Much of the political case for regional economic integration stems from national security. Another case study provided by Hill is the European Union. The nation states of Western Europe bonded together in an effort to deal with the political giants of the USSR to the east and the USA to the west. Further, regional economic integration can facilitate political harmony between nations due to their increased level of
Globalization has become one of the most influential forces in the twentieth century. International integration of world views, products, trade and ideas has caused a variety of states to blur the lines of their borders and be open to an international perspective. The merger of the Europeans Union, the ASEAN group in the Pacific and NAFTA in North America is reflective of the notion of globalized trade. The North American Free Trade Agreement was the largest free trade zone in the world at its conception and set an example for the future of liberalized trade. The North American Free Trade Agreement is coming into it's twentieth anniversary on January 1st, 2014. 1 NAFTA not only sought to enhance the trade of goods and services across the borders of Canada, US and Mexico but it fostered shared interest in investment, transportation, communication, border relations, as well as environmental and labour issues. The North American Free Trade Agreement was groundbreaking because it included Mexico in the arrangement.2 Mexico was a much poorer, culturally different and protective country in comparison to the likes of Canada and the United States. Many members of the U.S Congress were against the agreement because they did not want to enter into an agreement with a country that had an authoritarian regime, human rights violations and a flawed electoral system.3 Both Canadians and Americans alike, feared that Mexico's lower wages and lax human rights laws would generate massive job losses in their respected economies. Issues of sovereignty came into play throughout discussions of the North American Free Trade Agreement in Canada. Many found issue with the fact that bureaucrats and politicians from alien countries would be making deci...
Comparing Power and Influence of WTO and OECD In the past two decades there has been a proliferation of associations and organizations in order to implement the interests of both private persons and governments at the bilateral, regional and global level in the course of the trade liberalization. The following essay will compare the power and influence of the World Trade Organization (WTO) and the Organization for Economic Cooperation and Develpment (OECD), with regard to their member states, as well as their importance in the global trading system on the background of their institutional structure.
The difference between a product being a success or a failure can come down to how quickly a team can communicate and correct problems. There are strategies that can centralize a lot of supply chain decisions to maximize efficiency and minimize problems as well as down time. According to kinaxis the strategy that is taking over the industry is called supply chain control towers. What these actually do is combine technology, people, and a centralizing process to achieve a more reactive supply chain. When a problem comes apparent, a supply chain control tower will fast track the solution. The supply chain control tower will be able to use all of its assets and delegate the information to relevant personnel extremely quickly. If a company doesn’t use a supply chain control tower, the information will get out at a snail pace if it even gets there. Without a supply chain control tower, no one really knows all of the elements that are affected by a problem. Only a central supply chain control tower will know how to connect the moving parts and fast track the correction
As Ian Fletcher pointed out in Free Trade Doesn’t Work: What Should Replace it And Why, nations need a well-chosen balance between openness and closure toward the larger world economy (Fletc...
A study done by Chang (2010) alluded that port cities attract economic activities because they have low access costs to foreign markets. He further argued that, “since trade does not only take place via ports, but goods are also directly transported across borders from land-to-land, border regions could also have a geographic advantage in attracting firms, due to their proximity to foreign markets” (Niebuhr and Stiller, 2004 as cited in Chang, 2010). Moreover, it can be assumed that border regions are more likely to thrive by lively trade and trades, and as a result generate economic growth in borderlands (Chang,
Currently in the global environment, there is a strong sense of competition that must be achieved through better performance, almost all firms are competing in international markets due to the reduction in barriers for capital and tariffs. With the new changes in both communication and technology, the consequences faced are that production processes are no longer within national boundaries but spread across (Debrah & Smith, 2002).