A comparative advantage is innovation and they replaced the old technology compared to the advanced level. Often the relative dominance of economic income, low initial cost, adaptability enhanced, over time, savings, social prestige, and so quickly return to that. An innovation compared with the previous program the higher the degree of comparative advantage, the higher the utilization rate of the new program of reform.
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What is the comparative advantage
A comparative advantage is innovation and they replaced the old technology compared to the advanced level. The relative dominance of economic benefits is often used, low initial cost, adaptability enhancement. Period of time savings, social prestige. And so quickly return to that. An innovation compared with the previous program the higher the degree of comparative advantage, the higher the utilization rate of the new program of reform. [Edit] In economics, the law of comparative advantage refers to the ability of a party (an individual, a firm, or a country) to produce a particular good or service at a lower opportunity cost than another party. It is the ability to produce a product most efficiently given all the other products that could be produced. It can be contrasted with absolute advantage which refers to the opportunity cost Comparative advantage explains how trade can create value for both parties even when one can produce all goods with fewer resources than the other. The net benefits of such an outcome are called gains from trade. It is the main concept of the pure theory of international trade . [Translation] References In economics, the law of comparative advantage is the ability of one party (individual, company, or a country) to produce specific goods or services the opportunity to lower costs than the other. It is able to produce a product the most effective way to provide all possible other products. Can be an absolute advantage, which refers to a particular party has the ability to make a good contrast to the absolute lower cost than the other. How to explain the comparative advantage of trade for both sides can produce even fewer resources than the value of all goods. This result is known as the net benefits of gains from trade. It is pure theory of international trade, the main concepts.
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Comparative advantage in winning development strategy [1]
Gain a comparative advantage, we must first address several strategic issues. Main industry must clear the main industry is the backbone of business investment, the main industry and management quality are close correspondence. International investors are focusing on the main business are clear, they believe, is not clear if the main business, its management would be a one size fits all type of hodgepodge, the management of such funds to feel uncomfortable about. Looking at the world's top 500 enterprises, the main industry is very clear. With a bottle of cosmetics such as Procter & Gamble Company, 1997 annual turnover of $ 35.8 billion, ranking No. 64; Coca-Cola Company with a bottle of water, in 1997 a turnover of $ 18.9 billion, ranked No. 201; a McDonald's hamburger plus French fries, in 1997 a turnover of $ 11.4 billion, ranked No. 397. These enterprises consistent system for decades, focus on core business, creating a path through the child, to get huge profits. Therefore, enterprises should not blindly diversification, cross-industry development. Grasp the key elements of the value chain from business inputs, outputs to the capital return to form by a number of aspects of the composition of the value chain. The value chain of value-added effect is not as important, always starting from the main added value to find the link, it is critical that the value chain. As an enterprise, should focus on the key value chain into their own hands, while the other part as far as possible through market solutions. As the production and management of business types, the distribution range of key value chain is also different. Under normal circumstances, the consumables category production companies, marketing is a major part of the value chain, the buyer the feeling to go along with the seller, successful companies tend to focus on marketing, network building and brand promotion. For capital-intensive products, high-end consumer durables manufacturer, its often the key to technology development, with the true function of products, quality and brand content to attract customers. In the buyer-seller relationship, the opposite to the previous case, the performance of the buyer is the active side, the seller is the passive side, the buyer's willingness to go along with the seller. Therefore, product promotion, mainly through the user's lag publicity, rather than the advance publicity through the media to achieve. The choice of technology transfer and cooperation in a broad sense, any business has a technology transfer and cooperation of choice. This is because any business can boast that he has always been leading all aspects. As an enterprise, should be guided by the judge, that expert is always more than enterprises within the enterprise, there is always the highest level of experts outside the enterprise. The context of strategic positioning, should grasp the following points: First, locate the target orientation, that is aimed at the commanding heights of the industry, while seeking innovative unique; the second is the choice of targets focusing on mutually dependent relationship, such as vertical relations in finding a partner, in order to avoid direct competition; third is to seek to project, part of the subdivision, respectively, find partners, to prevent over-reliance on a particular object. Organizational structure of the arrangement in principle, the group structure is desirable to introduce three, that is the parent company, subsidiaries, production and management company. Division of functions between levels by position, not upside down, a good bit. From the first grade to second grade can be horizontal diversification, and this diversity must be built on specialization, based on the business with each other do not cross. From the second level to third level can be vertical diversification, but not horizontal diversification. Parent must make the results of positive investment return of control to prevent the parent company's investment in the second, three losses. The success of multinationals in the world is the ultimate return on investment can always return to the parent company. As a third-class enterprises are not direct foreign investment. The right of foreign investment, restructuring of a subsidiary's business should always go right to the parent company. In this way, the parent company as the headquarters, should be mainly grasp of financial analysis, project evaluation, benefit projections. Structure, mechanism of positioning system positioning mechanism, a matter of business survival, it is essential. Positioning should grasp the following principles: 1, caused by the different funding structure to adapt to a different range of internal relations, to determine what kind of production and management projects in the framework of the structure of investment by the Who. 2, the sole purpose of corporate restructuring, is to meet the enterprise survival and development of institutional mechanisms to have the condition, not for the restructuring and reform, not passively submit to a mandatory arrangement. 3, into what form of corporate restructuring, the implementation of what kind of system, the most fundamental thing is to carry out specific system cost analysis to see what kind of system using the system to achieve the lowest cost, most efficient input-output system. In the development of specific programs, we must find trouble off the key elements of enterprise development, through the activation of the key elements and institutional arrangements to achieve the overall best combination. 4, for the future development of the dynamic mechanism design. Future development of enterprises rely mainly on New workers, therefore, how to make the workers have hope, there is intrinsic motivation, is crucial. [Edit]
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Comparative advantage position of a restriction of competition [2]
Despite the relative dominance of the formation of a necessity, but the relative dominance of abuse may also cause damage to competition, such damage is mainly for the following three aspects: First, the relative dominance of the expansion. Position of comparative advantage is only a transaction on the edge, but if the company has a dominant position abuse of that position, it is possible to extend this advantageous position relative to the market dominance. Because of its strong dependence on trading partners to the existence of a relatively dominant position of enterprises can easily implement other restriction of competition, and thus the dominant position in the competitive market in which companies restrict the passage of time, the relative advantage can be extended to dominance. For example, the prevailing party can be charged to the trading partners to all kinds of unreasonable fees, in order to enhance their economic strength; to refuse to deal with threats, forcing trading partners with the signing of an exclusive supply or exclusive purchase agreement, thus making it competitors, reducing the loss of supply or distribution channels; large-scale retail enterprises can drive down the purchase price by way of the implementation of low sales, the price advantage to squeeze out small retail businesses, expand their market position. Second, the relative side of the transaction where the restriction of competition on the market. Dominant position in corporate influence sometimes extended to transactions where the market is relatively square on top of that dominant position on the upstream or downstream business competition caused by restrictions on the market. The relative dominance of the core is dependent on the relationship between the use of the dependencies, one can easily realize the transaction the other party's control. If the advantages of all transactions relative to force companies to deal with uniform prices, it will become in the transaction between the relative horizontal price cartel, and this advantage due to cartel control of the business, compared to the spontaneous formation of the weak market cartel, its duration is often long and resistant, and the danger is much greater also. With dependencies, advantages corporate transactions relative to the implementation of different prices or other trading conditions of discrimination, but also the reality of the more common abuses. Because such discrimination exists, the transaction is bound to the relative competitiveness of large changes, some may be favorable to facilitate the transaction to enhance their competitiveness, crowding out other competitors. In addition, the relative dominance by the formation of an exclusive trading agreement, apparently reached the limit can be upstream or downstream market competitive purposes, and this limit is quite thorough, were not favored enterprises are likely due to immediate loss of supply or marketing goods channels in trouble, or even out of the market. Third, the loss of the interests of consumers. Abuse of dominance behavior of the relative damage to the interests of consumers is obvious. If the transaction is itself relative to the consumer, such as commercial banks and their customers, direct damage to abuse the interests of consumers, such damage may be manifested as either charge higher prices, may also be expressed as a refusal to deal. If trading partners are not consumers, the loss of consumer interest is indirect. On the one hand, competitive enterprises through the discriminatory treatment of certain transactions or reject the company's products out of the market, so consumers will lose the right to choose; other hand, the advantage relative to the trading company charged various fees, would ultimately transferred to consumers, charges more, the higher the price of retail goods. In addition, the relative dominance through expansion or to rely on competition among enterprises is caused by restrictions, will stifle competition on the relevant market, fundamentally undermined the interests of consumers.
