LOGT 4232 Week 1 Class Notes Aug 16-18
LOGT 4232 Week 1 Class Notes Aug 16-18 LOGT 4232
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This 3 page Class Notes was uploaded by Tavish Smith on Tuesday September 6, 2016. The Class Notes belongs to LOGT 4232 at Georgia Southern University taught by Heidi Celebi in Fall 2016. Since its upload, it has received 3 views. For similar materials see International Logistics in Logistics at Georgia Southern University.
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Date Created: 09/06/16
Week 1 – August 18, 2016 Chapter 1 – International Trade International Trade Milestone Bretton-Wood Conference (1944) o Creation of the International Monetary Fund (1945) Biggest borrower = Portugal, Greece, Ireland, & Ukraine After WWII Stability o First general agreement on tariffs and trade (Geneva, 1948) Treaty of Rome (1957) o European Union World Trade Organization (1995) The Euro’s creation (1999) and placement in circulation (2002) o Maastricht Major Exporting Countries 1. China = 11.2% 2. United States = 8.4% 3. Germany = 7.7% 4. Japan = 4.4% Major Importing Countries 1. United States = 12.6% 2. China = 9.8% 3. Germany = 6.3% 4. Japan = 4.8% Surplus: selling more than buying (China and Germany) Deficit: buying more than selling China is exporting more and more US imports has not increased International Trade Drivers Cost drivers: companies increase their sales worldwide to recover their high investment costs o Re-shoring due to operational costs o Increase revenue o Supplier/supply cost o Fixed cost Competition drivers: companies enter foreign markets to keep up with their competitors, retaliate against them, or enter a market first o Retaliation o Detrimental (local) Market drivers: companies enter foreign markets because their customers expect them to be present in those countries o Changing lifestyles, preferences, tastes o Expanding o Sector/industry o Untapped Technology drivers: companies enter foreign markets because their customers use technology to make purchases from these markets o Easier to buy o Transparency o Market leader o Create market/preference Why is global trade becoming more global? Laws loosened Lower cost, less time to transport People “OK” with buying foreign goods International Trade Theories Theory of absolute advantage o Adam Smith o If a country can produce a certain good more efficiently than other countries, it will trade with countries that product other goods more efficiently Theory of comparative advantage o David Ricardo o Nations will trade with one another as long as they can produce certain goods relatively more efficiently than one another o The reason one country’s labor is better than another’s is because the technology is better o Consider? Cost? Renewable? Static? Technological advances? International product life cycle theory o Raymond Vernon o Over it’s life, a product will be manufactured in different types of countries, in stages, generating trade between these countries Stage 1: product is created in developed country, using new technology and serving a market need Stage 2: as sales grow, competitors start to make similar products in other developed countries, responding to local needs Stage 3: manufacturing of product has become routine and costs need to be reduced, and production moves to developing countries Cluster theory o Michael Porter o Competitive clusters form when companies in the same industry, as well as their suppliers, concentrate in one geographic area. o When this happens, the companies “feed” on each other’s know-how, pushing them to innovate faster. o They become so efficient and innovative that they become world-class suppliers Logistics cluster theory o Yossi Sheffi o Form when logistics companies concentrate in one geographic area o When this happens, the companies allow manufacturers to operate more efficiently, since all the services they need to ship are located in one area o The logistics suppliers, even though they are competitors, actually help each other attract new customers
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