LBIM2019H010

SINGH Ananya

1. Reasons affecting the growth of international trade are

exchange rate,
competitiveness,
competitive trade,
reducing cost of manower,
globalization.
2. Drivers of international trade means market, government, cost and completions. These
drivers affect the main condition for international trade and its potential which are taken
care by different firms.
3. Cost, transport mode, inventories, agents, financial risk, communication, cultural.
4. By managing costs, improving inventory, improve quality and fulfilling the demand.
5. Market Potential ,Geographic Diversification, Excess Production Capacity and Low Cost,
Position, Near end of Life-Cycle in Domestic Market, Source of New Products and Ideas.
6. Advantages- increase efficiency ,maintain flexibility, gives access to special logistique
expertise, stay current with the logistique
disadvantages-loss of control, transparency, distance from materials and merchandise, limits
on individualized service.
7. A global company refers to company which provides goods or service through distribution in
many countries. Example McDonald’s are located across the global.

(1) A) Uncontrollable elements – Political and legal factors->business requires to know about
taxes, subsidies, regulations, government ownership of carriers and availability modes.
economic factor- unemployment rate, inflammation rate, labour cost, per capital income,
market size.
Socio- cultural forces- countries with cultural similarity can be easily approached as
compared to countries with cultural diversity.
Technological-> depends on the variation in availability of technology between developed
and emerging market.
Competition-> products imported from the various part of the world and goods produced
domestically.
CONTROLLABLE ELEMENTS-> product- what does customer want or need in the market
Place- where do they need
price- value of product to the buyer
Promotion- where and when can you market message across to your target.
(2) We can do so by giving the products in lower cost to customers which will attract more
customers. And it will give the company a advantage over the competitors. For example,
Walmart sell products at lower price which makes consumer happy, and it still gain profit,
locality and stand as a good competitor.
(3) A) Global logistique increase the need of transportation where all modes of transport are
reliable. Which lead to congestion at seaports, on railways, at border crossing and it led to
pollution, fuel cost high.
 B) it increases the international shipping activity, and effect labour and it's so easy to
exchange goods across and its takes couple of time.
C)it has reduced credit constraints and allowed everyone to save less. And it benefited the
world making markets more efficient, increasing competition, limit to military conflicts and
spreading wealth more equally.
D)the process of growth in economy and as well as society and to improve their lifestyle for
status.it bring a lot of information in multinational trade and higher financial openness', this
led to increase in trade.

3.1 While sourcing from low-cost countries has proven to be cheaper, sourcing for such retail
services comes with issues of its own.

The major five current challenges faced while opting for sourcing from low-cost countries are -

1.Unskilled Labour - The workers hired are not well trained and unskilled

2.Lack of Road and Port Infrastructure - This affects the trade availability due to poor infrastructure
of transport routes.

3.Cultural differences - These differences occur due to sourcing from an outside country with
different beliefs.

4.Lack of local raw materials - Not enough raw materials being available locally.

5.Technology Disruptions - As these countries are not properly developed therefore not advanced
technologically.

This shows a significant trade-off between both the costs and benefits while sourcing from low-cost
countries.

3.2 Intel has invested highly in its R&D which enables it to stay competitive and provide with
constantly improving microprocessors.

Therefore, to retain their competitive advantage by investing highly in their R&D, Intel has decided
to build plants outside of US to save costs.

Intel considers Costa Rica to be the site location for its Assembly and test plant because of its low
labour costs and logistical advantages for exporting of products to United States or Europe.

3.3 Mode of transport chosen for the following characteristics -

a) Low Volume, low value - Package Carriers, such as FedEx, UPS and the Postal Service, which carry
small packages such as letters.

b) Low Volume, high value - Air, as this is very fast and fairly expensive mode of transport.

c) High Volume, low Value - Rail , since the transportation time by rail can be long. It also offers
transportaion of large/heavy density products given they are not very time sensitive.

d) High Volume , high value - Truck as it offers the advantage of door to door shpment and slightly
shorter delivery times.