Hire Writer These factors are further examined and following factors are derived that can best explain the diamond model of Porter. Factor conditions Porter argues that key factors of production or specialized factors are created, not inherited.
The international trade has been revolutionized by technological advancements, connectivity, liberalization of trade and globalization.
Differences in the opportunity costs of production explain the comparative advantage theory. The theory applies where a country is able to produce goods at a small opportunity cost than another country.
The comparative advantage has seen countries specializing in production of goods that they are able to produce at low costs that increase productivity. The comparative advantage helps a country know what they can specialize in. The specialization can be on what they do best while outsourcing the rest of the activities.
Availability of low cost labor in a country can lead the country specializing in production of goods that require lower costs. A country with capital availability will specialize in activities requiring large amounts of finances Suranovic, In the Logitech case the high productions in China at a low cost is a comparative advantage to the company.
Therefore, absolute advantage refers to differences in productivity of countries. When a country requires less quantity input to make productions they are considered to have an absolute advantage. The absolute advantage is based on a country or company being able to produce effectively at the same time using minimal resources Rodrigue, In the Logitech case, China availability of cheap labor is an example of an absolute advantage.
The distribution of operations in different countries where each country is great at performance of a particular operation is an absolute advantage.
The opening of a company in Taiwan takes advantage of the absolute theory.
In Taiwan there is skilled labor, an expanding computer industry and provision of space in a science-based industrial park.
The absolute advantage helps a company gain a competitive advantage over rival companies. The company is able to spend less while making profits because of the distribution of activities.
The new trade theory suggests that countries can benefit from trade with each other even when they do not have differences in resources and technology. The theory highlights the importance of geographical location of a company. The location preference is close to customers and suppliers to help lower transportation costs.
Large population areas make a good center for production. The new trade theory also focuses on the individual characteristics of a company.Keiser is revolutionizing fitness with our pneumatic training system and indoor cycles, including the award-winning M3. Because good enough isn’t.
To what extent can Porter's diamond help explain the choice of Taiwan as a ma jor manufacturing site for Logitech? Porter's diamond considers four important attributes which will create an enviro nment that helps the domestic industries.
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The Logitech case describes the global activities of Switzerland's Logitech, one of the world's largest producers of computer mice. To what extent can Porter’s diamond help explain the choice of Taiwan as a major manufacturing site for Logitech?
Search Results for 'to what extent can porter s diamond help explain the choice of taiwan as a major manufacturing' Case Study 5. To what extent can Porter's diamond help explain the choice of Taiwan as a major manufacturing site for Logitech?