POB Global Business 101

POB Global Business 101

Global Businesses

• Are businesses which operate internationally 

• Conduct trade across the world

• Import and export goods and services

Specialization

• Is when a business creates the efficient production of a specific product, which is typically shipped abroad to countries that do not produce the product

• for example:

• Pfizer is one of only 4 of the producers of the COVID 19 vaccine. They will distribute the vaccine around the world.

Opportunity Cost

• “Opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up,” 

• 
  

Competitive Advantage

• factors that allow a company to produce goods or services better or more cheaply than its rivals. It is what makes the brand, product, or service to be perceived as superior to the other competitors.

• for example, Facebook has a competitive advantage over other social networking websites such as Snapchat

Comparative Advantage

• Is when a company sells goods and services at a lower price than its competitors and still gains larger profits, despite selling at a lower cost an economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners.

• For example, China’s comparative advantage over the United States is in the form of cheap labor. Chinese workers produce simple consumer goods at a much lower opportunity cost. The United States’ comparative advantage is in specialized, capital-intensive labor. American workers produce sophisticated goods or investment opportunities at lower opportunity costs. 

Absolute Advantage

• when a producer can produce a good or service in greater quantity for the same cost, or the same quantity at a lower cost, than other producers.

• for example, Panama, a tropical country, can produce bananas much more cheaply than Canada can. Canada would need expensive greenhouses. Panama has an absolute advantage over Canada regarding banana production.

Multiple Choice

Which of these is an example of Specialization?

• What you lose by choosing to buy one item over another item

• Brazil's ability/cost of producing bananas over Canada's ability/cost of producing bananas

• Phizer's COVID 19 vaccine

• China's ability to charge lower prices because of lower labor costs

• Harley Davidson vs Indian Motorcycles

Multiple Choice

Which of these is an example of a Comparative Advantage?

• What you lose by choosing to buy one item over another item

• Brazil's ability/cost of producing bananas over Canada's ability/cost of producing bananas

• Phizer's COVID 19 vaccine

• China's ability to charge lower prices because of lower labor costs

• Harley Davidson vs Indian Motorcycles

Multiple Choice

Which of these is an example of a Competitive Advantage?

• What you lose by choosing to buy one item over another item

• Brazil's ability/cost of producing bananas over Canada's ability/cost of producing bananas

• Phizer's COVID 19 vaccine

• China's ability to charge lower prices because of lower labor costs

• Hartley Davidson vs. Indian Motorcycles

Multiple Choice

Which of these is an example of Absolute Advantage?

• What you lose by choosing to buy one item over another item

• Brazil's ability/cost of producing bananas over Canada's ability/cost of producing bananas

• Phizer's COVID 19 vaccine

• China's ability to charge lower prices because of lower labor costs

Multiple Choice

Which of these is an example of Opportunity Cost?

• What you lose by choosing to buy one item over another item

• Brazil's ability/cost of producing bananas over Canada's ability/cost of producing bananas

• Phizer's COVID 19 vaccine

• China's ability to charge lower prices because of lower labor costs