BBB4M CHAPTER 3. Important Terms Absolute advantage Comparative advantage Competitive advantage...
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- BBB4M CHAPTER 3
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- Important Terms Absolute advantage Comparative advantage Competitive advantage Developed/developing nations Economies of scale Gross domestic product (GDP) Intellectual capital Opportunity cost Productivity Rationalization Standard of living Total quality management (TQM) utility
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- Global Presence and Canada Canadas global presence is important because it means other countries are aware of the products, standards and reliability we offer. CAPITAL the money or other assets that are available for investment purposes. Strong International or global presence A country is considered to be international, rather than global, if it operates and sources its needs in only a few countries.
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- Global Presence and Canada Global/International presence plan should answer these questions Which product will lead the way as the company launches or rolls out an international business initiative? Which markets should be entered first? What is the best way to enter these markets? How rapidly should the company expand internationally?
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- Competitive Advantage Canada is 8 th among 80 countries measured for their competitive growth Economic utility is a products ability to satisfy the needs and wants of the customer.
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- Gross Domestic Product GDP The total value of all goods and services produced in a country during a specific period. GDP per capita Total GDP divided by the number of people n the country.
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- 3.2 Factors affecting Canadas competitiveness Quality and quantity of natural resources Strength of the countrys currency and its exchange rate Infrastructure in the country Research and Development Workforce Characteristics Societal Characteristics Entrepreneurship Government Involvement
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- Opportunity Cost The forgone alternative Calculates in financial terms, the benefits of the next best opportunity that was forgone or not taken. When one country has a lower cost in producing at a lower opportunity cost than another country, it is said to have COMPARATIVE ADVANTAGE. ABSOLUTE ADVANTAGE If a country can produce the good at a lower cost or with a higher rate of productvity
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- 3.3The Meaning of Productivity Productivity refers to the amount of work that is accomplished in a unit of time using the factors of prodcution
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- Factors Influencing a Countrys productivity Efficient use of human and physical resources Costs associated with labour Accessibility and quantity of a countrys usable natural resources Quality and availability of a nations technology Quality of education and government services
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- Factors Influencing a Countrys productivity Quality of business leadership and strategy General work ethic and healthy lifestyle Efficiency of plants and of organizational structures Size of both domestic and international markets for a countrys products and services Amount of support given to research and development
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- 3.4 Canadas Global Challenge Standard of living is the way people live as measured by the kinds and quality of goods and services they can afford. Knowledge economy refers to the increased reliance of business, labour, and government on knowledge, information, and ideas-and information technology to put them to use. Intellectual capital is the sum of knowledge, information, intellectual property, talent, and experience within a country or an organization.
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- Innovation and quality Technological and scientific breakthroughs, constant improvements in the way businesses adopt new processes and adapt to new markets. Taxation and innovation Taxation is the method used to generate the finances required to run the country.
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- RATIONALIZATION RATIONALIZATION is the process used by an organization or company to change its organizational structure, its product line, or its production process to become more efficient, productive, and competitive. Economies of scale refer to the tendency of the cost per item to go down when items are bought or produced In large quantities.
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- Factors that companies/industries look at when Rationalizing Consumer demand A countrys trade balance and business climate Organizational change Business activities
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- Developed Nations and Economies Developed Nations Developing Nations Less-developed nations
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- 3.5 Quality control and continual improvement Japanese name for the concept of continual improvement: Kaizen(Ki-zan). Kaizen is the belief that to gain competitive advantage, there must be commitment to quality Promotes everyone working together to make improvements Helps eliminates waste in all systems and processes od an organization Does not necessarily mean an increase in investments or costs.
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- Quality control and continual improvement Some of Demings best known management points Always continuously improve the product or service to stay competitive and create jobs. Encourage education of the workforce, both on and off the job. Allow workers to take responsibility for and pride in their work. Remove communication barriers between management and the factory floor Encourage teamwork between departments to improve product quality and to create common goals.
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- TQM Total Quality Management(TOM) method of managing organizations with a commitment to continuously improve the products, processes, and the work habits of employees; management also is determined to consistently meet customer needs. MARKET-DRIVEN ORGANIZATIONS are those that respond to market needs by providing customers with high quality goods and services that are low in cost and available when required.
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- ISO International Organization for Standardization (ISO) Mission to promote the development of voluntary standards and related activities in the world, with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological, and economic activity.