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    In the short run, the imperfect markets theory applies to Blades, Inc. as it wants to import cheaper inputs from Thailand and export to Thailand to take advantage of low competition. In the long run, the comparative advantage and product cycle theories apply as Blades hopes to establish a Thai subsidiary to be the first roller blade manufacturer there, utilizing its superior production process, and to preserve its competitive advantage as its U.S. sales decline.

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    CP-3.Which Theories of International Business Described

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    In the short run, the imperfect markets theory applies to Blades, Inc. as it wants to import cheaper inputs from Thailand and export to Thailand to take advantage of low competition. In the long run, the comparative advantage and product cycle theories apply as Blades hopes to establish a Thai subsidiary to be the first roller blade manufacturer there, utilizing its superior production process, and to preserve its competitive advantage as its U.S. sales decline.

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    28 views1 page

    CP-3.Which Theories of International Business Described

    Uploaded by

    hy_saingheng_7602609
    In the short run, the imperfect markets theory applies to Blades, Inc. as it wants to import cheaper inputs from Thailand and export to Thailand to take advantage of low competition. In the long run, the comparative advantage and product cycle theories apply as Blades hopes to establish a Thai subsidiary to be the first roller blade manufacturer there, utilizing its superior production process, and to preserve its competitive advantage as its U.S. sales decline.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    3. Which theories of international business described in this chapter apply to Blades, Inc.

    in
    the short run? In the long run?
    ANSWER:Thereareatleastthreetheoriesofinternational
    business:thetheoryofcomparativeadvantage,theimperfect
    marketstheory,andtheproductcycletheory.Intheshort
    run,BladeswouldliketoimportfromThailandbecauseinputs
    suchasrubberandplasticarecheaperinThailand.Also,it
    wouldliketoexporttoThailandtotakeadvantageofthefact
    thatfewrollerbladesarecurrentlysoldinThailand.Bothof
    thesefactorssuggestthattheimperfectmarketstheory
    appliestoBladesintheshortrun.Inthelongrun,thegoal
    istopossiblyestablishasubsidiaryinThailandandtobe
    oneofthefirstrollerblademanufacturersinThailand.The
    superiorityofitsproductionprocesssuggeststhatthetheory
    ofcomparativeadvantagewouldapplytoBladesinthelong
    run.However,theproductcycletheoryalsoappliestoBlades,
    sinceitsU.S.salesaredecliningandBladesfeelsthatit
    musteventuallyestablishasubsidiaryinThailandinorderto
    preserveitscompetitiveadvantageoverThaicompetitors.

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