Name: Brylle Patayon

FINAL EXAM CBM321 (2887)

ESSAY
1. Assuming equality and fairness in trading like in free trade, nations who engage in
international trading will enjoy equal benefits in international trade. Countries that
engage in International trade benefit by increasing their revenue, decreasing
competition, benefit from currency exchange, etc. As nations have different barriers to
trade both importing and exporting, the benefits they get when trading internationally
depends on their own policies in trading. These trade barriers come in several forms like
tariffs, licenses, embargo, subsidies, and the likes and it generally causes economic
inefficiency. If a trade war occurs – that is when 2 or more countries repeatedly use
trade barriers to each other, it causes a limited choice of product and increase the prices
of products.

2. As I’ve answered in question number 1, as nations engage in trading, trade barriers will
also exist and these barriers of trade differ in every country affecting the economy
negatively. Consequences in trade expansion will occur when trade barriers like tariffs
and licenses are present as it will cause the prices of imported products to increase and
can reduce the availability of some other products and commodities.

CASE

1. The advantages brought by global sourcing are the following:

- With global sourcing, you can have multiple options for quality specification
- Global sourcing leads to upgrade in technology through innovation
- Global sourcing can offer lower cost of production and cheap man labor
- Global sourcing allows wider access to raw materials
- Global sourcing also allows recruitment of well skilled employees with distinctive
skills
The disadvantages brought by global sourcing are:
- Foreign currency can affect the cash flow due to process or devaluation of currencies
- Changes in political policies
- High storage costs
- You cannot quickly responses to changes in business environment
- Global sourcing can cause loss of job as manufacturing is made in another nation this
put domestic employees out of work
- High cost of communication

2. The expansion of foreign market is an advantage of M&M because it can help them have
wider customer base. This means that with the expansion of market, M&M has the
potential to expose their product to international markets, boosting your customer and
gain higher sales which leads to higher profits. Expansion of market can also provide
potential relocation of the business if needed. Most of all the greatest advantage
expansion of markets can give to M&M is the opportunity to meet new people and hire
highly qualified professionals that will help develop or bring new concepts and ideas to
their business.

3. M&M have a lot benefits to gain from the alliance they made with Tong Yang. First of all,
their alliance with Tong Yang helped them enter new business territory and gave them
 more ability to compete to the market as they got access to new technologies. Second,
their alliance with Tong Yang boosts their market capacity as they gain new resources
and new competitive skills without the expense of recruitment.

4. Possible risks of alliance include the following: Hidden costs as the business operates
there is something happening unknowingly and it only goes through time. Another is
that as alliance is a partnership, a certain difficulties suffered by a partner will affect the
other. As partnership goes, information may flow freely and there is a risk of leakage of
information. Risks of alliances can also include loss of operational control.