Achieving Competitive Advantage

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Achieving Competitive Advantage

• By Chantel, Isuru, and Jhoanna

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Global Presence and Canada

• When a country has global presence, its
  recognized for reliability, fairness, integrity,
  and standards of its goods and services
• Countries can also be known for negative
  qualities
• Some countries with this flaw are known for
  non-democratic governments, unsafe/unfair work
  environments, political upheaval, etc.
• Canadas global presence other countries know
  we are reliable and that we have same products
  and good standards
• We have to access to capital and markets from
  around the world

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• Capital
• -gt money or other assets available for
  investment purposes
• Companies must have a stronge international/global
  presence if they want to expand to other
  countries
• However, not all companies are successful at
  this
• To successfully create an international business,
  companies must have established distribution
  arrangements, offices, hired staff, a toll free
  number, website, e-commerce, etc.

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• Another way for businesses to build
  global/international presence is to develop
  answers to the following questions
• Which product will lead the way for the company
  as it starts a inter-business initiative?
• Which markets should be entered first?
• What is the best way to enter these markets?
• How rapidly should the company expand?
• To be successful, companies must understand local
  markets in other countries (i.e. In Japan,
  Baskin-Robbins sells green tea flavoured ice
  cream)

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• Gross Domestic Product (GDP)
• -gt the total value of goods/services produced in
  a country during a specific period
• GDP includes items produced by foreign countries,
  and GDP per capita is the total GDP divided by
  the number of people in the country
• Canadas lower GDP a number of other countries
  are been more productive and are in a better
  position to compete internationally with other
  countries and companies

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• Competitive Advantage
• A companys ultimate goal to increase sales and
  profits
• This is achieved when companies/countries
  outperform other competitors by better products,
  better pricing and quality, uniqueness of
  products, profits, etc.
• Competitive advantage is achieved by market
  share, good performance, customer demand,
  distribution, service, basic resources, skilled
  workers, and more
• Canada the 8th out of 80 countries measured for
  competitive growth according to World Economic
  Forums Global Competitiveness Report in 2002
• The authors of the report said that the results
  are from evidence and data from many countries to
  assess for economic growth.
• Canada has slipped relative to the USA and some
  other European countries

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Factors Affecting Canadas Competitiveness

• Some characteristics and others such as strengths
  and weaknesses, can be applied to a countrys
  business climate to asses its potential for
  success at home and abroad.
• There are number of factors to be consider when
  assessing any countrys competitive strength or
  position.
• Criteria such as per capita income and employment
  statistics are used as measures and also some
  other factors.

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Lists of Factors that Affect Canadian
Competitiveness
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Quality and Quantity of Natural Resources

• Canadas abundant natural resources such as oil
  and gas are competitive advantages.
• Many of these natural resources are easy to
  export into U.S. and the relatively open borders
  between Canada and U.S.
• On the other hand, greater distances from other
  countries can be a disadvantage when transport
  costs and delivery time are accounted.
• Societal Characteristics
• value a countrys citizens place on quality and
  productivity at work, the level of health care
  and standard of living.

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Strength of the countrys currency and its
exchange rate

• Canadas currency has been relatively weak
  against the U.S. dollars that encourages foreign
  investment and increases Canadian exports, which
  means that companies have to pay more import
  goods and apparatus and new technology in the
  country over the last decade.
• Infrastructure in the Country
• Canada's strong transportation and communication
  systems support Canadian business production that
  allows companies to get their products to market
  efficiently and help business to communicate with
  customers and supplies around the world.

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Research and Development

• the level and scope of research and development
  can affect its competitive position.
• Canadas record on research and development,
  according to sector with RD in information
  technology and telecommunications infrastructure
  sectors leading the way.

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Workforce Characteristics

• the level of education and the extent of training
  in the workforce are also factors in a countrys
  competitiveness.
• Canadian workforce is fewer in number than those
  of some other countries, but has well-educated
  workforce and a high level of literacy.
• On the other hand, the number of days lost due to
  union-management problems in a country, is the
  one where international and multinational
  businesses are interested with.

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Opportunity cost

• When one opportunity is chosen by a company, the
  rest are sacrificed. It is the cost of passing up
  the next best choice when making a decision.
• Example
• - The opportunity cost of going to college is the
  money you would have earned if you worked
  instead. On one hand, you lose four years of
  salary while getting your degree on the other
  hand, you hope to earn more during your career
  thanks to your education. If utilized properly
  you will make more money after doing your degree.
  You work for 4 years with a salary of 40,000 and
  make 160,000 but with the degree you make 80,000
  which will increase with experience. But if you
  hadnt done the degree u would be stuck at making
  40,000 with little increase.

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Comparative advantage

• When a country has a lower cost in producing a
  good (product) at a lower opportunity cost than
  another country. When a country has a comparative
  advantage it can specialize in what it does.
• Example
• - in the early 1990s the consumption of
  Canadian salmon heads grew at a rapid rate in
  southern China. Canada specializes in salmon
  heads and exports to China. Meanwhile China has a
  comparative advantage in making toys because of
  inexpensive labour. China specializes in toys and
  exports to Canada.

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Absolute advantage

• when a country can produce a good at a lower cost
  or higher rate of productivity than another. A
  country that can produce a good with lower
  production costs through more efficiently
  machinery, new techniques, fewer labour resources
  or costs.
• Example - Kentucky has significant coal
  reserves.Illinois does not and uses nuclear
  energy.If energy production is cheaper with coal
  than with nuclear energy.Kentucky has an absolute
  advantage in energy production.