Logitech
Trade is the exchange or the transfer of ownership of goods and services from a seller to a buyer and gets back something for an exchange. Trade exists because of specialization and division of labor, which is to concentrate on a specific part of production of goods, and trade the finished goods for other finished goods with others.
A country’s economy may gain from buying certain products for other countries than to produce at home because international trade allows a country to specialize in manufacture and export their most efficient manufactured goods, and on the other hand import manufactured goods that produced or manufactured more efficiently from other countries.
Trade exists in between regions or countries as they got an absolute advantage or a comparative advantage in production of specific tradable goods through their mass production. An absolute advantage for a specific country is the more efficient on production of a product than other countries. A comparable advantage for a specific country is to produce the most efficient goods and buy goods that it produces less efficient from other countries, even though they can produce more efficiently by themselves.
Different factors of production (i.e. land, labor, capital) are available in different countries and regions, and together with different proportions are needed to manufacture particular goods. A more abundant of the above factors of production lead towards a lower cost. Through international trade, a manufacturing firm able to gain an economy of scale and for the ultimate goal of cost reduction. An economy of scale is a cost of reduction based on a large scale of output, the two reasons behind are a large production volume able to spread the fixed cost to a lower level, and through the utilization of specialized employee and equipment which able to obtain a high productive output.
International trade helps Logitech lower the cost of manufacturing their computer peripherals such as
A country’s economy may gain from buying certain products for other countries than to produce at home because international trade allows a country to specialize in manufacture and export their most efficient manufactured goods, and on the other hand import manufactured goods that produced or manufactured more efficiently from other countries.
Trade exists in between regions or countries as they got an absolute advantage or a comparative advantage in production of specific tradable goods through their mass production. An absolute advantage for a specific country is the more efficient on production of a product than other countries. A comparable advantage for a specific country is to produce the most efficient goods and buy goods that it produces less efficient from other countries, even though they can produce more efficiently by themselves.
Different factors of production (i.e. land, labor, capital) are available in different countries and regions, and together with different proportions are needed to manufacture particular goods. A more abundant of the above factors of production lead towards a lower cost. Through international trade, a manufacturing firm able to gain an economy of scale and for the ultimate goal of cost reduction. An economy of scale is a cost of reduction based on a large scale of output, the two reasons behind are a large production volume able to spread the fixed cost to a lower level, and through the utilization of specialized employee and equipment which able to obtain a high productive output.
International trade helps Logitech lower the cost of manufacturing their computer peripherals such as
References: Charles WL Hill, Chou-Hou Wee, Krishna Udayasankar, International Business - An Asian Perspective, McGraw Hill 2012 Study Units – International Business Management MKT B390, OUHK 2012