Additional Note: Perhaps these 5 L's + Innovation within the company that outlines what will best work for a company.
--Legislature
"Free Trade" has never existed. It's naive to believe of its existence, although it's something to be strived toward. Neoclassical economists and thinkers strongly believe in "do what you do best and trade the rest." The matter of the fact is that diversification in your economy is needed to equally divide the risk, hedge-your-funds, and/or survive. If your country is but one industry, you will end becoming like Ireland (potatoes famines and vacant housing! emigration... brain drain - ooh, that sounds like a good topic for the future) or the Ivory Coast. The latter's disaster happened in the 1980s and involved the IMF telling the mired countries of Cameroon, Ghana, and Nigeria to make chocolate. Producing it cheaper than the Ivory Coast, the main supplier of cocoa to Nestle - also the country's main crop - lost favor with the company. Nestle signed up with the above countries and the Ivory Coast went kaput. Subsequently, this happened at the end of the decade, courtesy of alumnus Charles Taylor, who incidentally walked off with a degree in economics
Back on track -
So eventually, if other countries produce the same good or service cheaper and more competitively, like in the above you case, you will end up losing your clientele and you will be forced to either suffer or downsize your economy (along with emigration of indigenous peoples). Anyway, the human race has witnessed a history of governments dictating tariffs, embargoes, and setting up barriers restricting trade. That being said, governments will definitely affect public company's stock. It is, after all, the HAND, visible or not.
Liquidity
Currency is an important thing these days. Also liquidity preference - particular tastes and/or choices in choosing what liquid monies one has. Take the Iceland default. When credit froze, they didn't have enough pounds, Euros, dollars, and whatnot to deal back to their investors/customers. They thought highly of their krona but whether conscious or not of their lack of diversification, they tanked, and the financial market with it, and their investors holdings - which disappeared! Poof! Does your head hurt? OK let's go back. Anyone own a lemonade stand or do student marts? Was there ever a situation where you had to run to your parents or some family member to ask for change?
Location
Real estate adage: "Location. Location. Location." Gotta have it. Is it temperate? Is the weather devoid of blizzards, hurricanes, storms, and climate that would make business unsuitable, facilities inoperable? What of the people that tend to pool around those locations, hm? "Location" speaks for itself. (the concept is also called "inherent comparative advantage" where said nation of location can produce effectively and cheaply, based on factors that are relatively unchangeable - resources, climate, aloha spirit, etc)
Logistics
How would an exporter best smuggle Cohibas from Cuba to the US, disguising them as fake Cohibas? A joke! Let's turn to Wikipedia for this one: "[Logistics] is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers... Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, packaging, and occasionally security. Packaging - I suppose that has something to do with marketing. Think critically in your mind on that if you're bored.
Labor
Is the work force belleaguered? Are they in a place, where frankly, it's hard to get from point A to point B because of dangerous gangs? Are they associated with friends like such? Are conditions too chaotic to conduct long-term business? Age? Generation? I almost feel that labor should be implied in Logistics
--
That's it. I got a final tomorrow morn'
About the above image... couldn't resist. I only saw the premier for this... season continuation?! They could have started season 2. I don't think I'll get into it until they play a cover I like... oops, this is an economics blog
No comments:
Post a Comment