What weapons do countries and companies have to stay competitive?
sujet: What weapons do countries and companies have to stay competitive?
The victims of the Globalization are the countries who try to become integrated into the world trade, but they are only undergoing the competition of the rich countries which the exports are subsidized, and ruining local producers. So for the poor countries and their companies, it is recommended to apply a policy of protectionism.
However, for the rich countries the force is liberalism. Indeed, the companies will be able to offer wages that they want, which affect the price of production and hence sales. A company which wants to remain competitive has to lower its cost of returns. That is the company has to act on the prices of intermediate consumptions (find lowest prices). She also has to master production costs, that is choose the alliance the most effective engine / human being. Companies can also relocate, that locate their production in a country where labor is cheaper. Instead of relocating, they may outsource some of their production in the same country or not. A company can also rely on research and development, to allow innovation and thus outperform the competition. In purpose, the company can export to remain competitive, while keeping the prices the most cheaper and an optimal quality.
The state intervenes in the competitiveness of domestic enterprises. Indeed, it has tools for influencing the economy. These tools are lowering taxes, thereby reducing the cost of production so the price of sale. Subsidies are sometimes paid back to companies, such as the European Union subsidizes some business. Infrastructure has an impact on competitiveness (for example roads, telecommunication network ,...). Education affects the competitiveness of the company, in addition the skilled workers are more productive than unskilled workers. A country remains competitive with other countries if it has utility (for example health, culture, sports …).
Companies and countries