International Trade. International trade as a way of increasing welfare for all. Reasons for businesses to go international

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International Trade

  1. International trade as a way of increasing welfare for all
  2. Reasons for businesses to go international
  3. Entry strategies

International Trade

  • exchange of goods and services between different countries
  • way of increasing welfare for all

Advantages

Absolute

Comparative

  • Favorable climate
  • Natural resources,
  • Etc.

  • Labor force
  • Modern technologies,
  • Etc.

Benefits

  • more jobs
  • a wider choice of goods for consumers
  • wider markets for businesses
  • economic growth
  • improved living standards
  • closer political links

Reasons to Go International

  • existence of lucrative markets
  • saturated home market
  • increased competition
  • economies of scale
  • ‘experience curve’ effects

Advantages

  • competitive edge over rivals
  • less risk
  • fresh ideas and different approaches to solving problems

Criteria for Selection of Strategy

  • Financial resources
  • Characteristics of a product
  • Personnel
  • Political and economic situation at home and in foreign country
  • Constraints and barriers

Pros and Cons

  • International trade
  • a way of increasing welfare for all
  • Reasons for businesses to go international:
  • lucrative markets, saturated home market, economies of scale, ‘experience curve’ effects, etc.
  • Entry strategies:
  • direct exporting, indirect exporting, foreign production

Thank You for Your Attention!

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