BBB4M

1. BBB4M CHAPTER 3

2. Important Terms • Absolute advantage • Comparative advantage • Competitive advantage • Developed/developing nations • Economies of scale • Gross domestic product (GDP) • Intellectual capital • Opportunity cost • Productivity • Rationalization • Standard of living • Total quality management (TQM) utility

3. Global Presence and Canada • Canada’s global presence is important because it means other countries are aware of the products, standards and reliability we offer. • CAPITAL – the money or other assets that are available for investment purposes. • Strong International or global presence • A country is considered to be international, rather than global, if it operates and sources its needs in only a few countries.

4. Global Presence and Canada • Global/International presence plan should answer these questions • Which product will lead the way as the company launches or “rolls out” an international business initiative? • Which markets should be entered first? • What is the best way to enter these markets? • How rapidly should the company expand internationally?

5. Competitive Advantage • Canada is 8th among 80 countries measured for their competitive growth • Economic utility is a product’s ability to satisfy the needs and wants of the customer.

6. Gross Domestic Product • GDP – The total value of all goods and services produced in a country during a specific period. • GDP per capita – Total GDP divided by the number of people n the country.

7. 3.2 Factors affecting Canada’s competitiveness • Quality and quantity of natural resources • Strength of the country’s currency and it’s exchange rate • Infrastructure in the country • Research and Development • Workforce Characteristics • Societal Characteristics • Entrepreneurship • Government Involvement

8. Opportunity Cost – The forgone alternative • Calculates in financial terms, the benefits of the next best opportunity that was forgone or not taken. • When one country has a lower cost in producing at a lower opportunity cost than another country, it is said to have COMPARATIVE ADVANTAGE. • ABSOLUTE ADVANTAGE – If a country can produce the good at a lower cost or with a higher rate of productvity

9. 3.3The Meaning of Productivity • Productivity refers to the amount of work that is accomplished in a unit of time using the factors of prodcution

10. Factors Influencing a Country’s productivity • Efficient use of human and physical resources • Costs associated with labour • Accessibility and quantity of a country’s usable natural resources • Quality and availability of a nation’s technology • Quality of education and government services

11. Factors Influencing a Country’s productivity • Quality of business leadership and strategy • General work ethic and healthy lifestyle • Efficiency of plants and of organizational structures • Size of both domestic and international markets for a country’s products and services • Amount of support given to research and development

12. 3.4 Canada’s Global Challenge • Standard of living is the way people live as measured by the kinds and quality of goods and services they can afford. • Knowledge economy refers to the increased reliance of business, labour, and government on knowledge, information, and ideas-and information technology to put them to use. • Intellectual capital is the sum of knowledge, information, intellectual property, talent, and experience within a country or an organization.

13. Innovation and quality • Technological and scientific breakthroughs, constant improvements in the way businesses adopt new processes and adapt to new markets. • Taxation and innovation • Taxation is the method used to generate the finances required to run the country.

14. RATIONALIZATION • RATIONALIZATION is the process used by an organization or company to change its organizational structure, its product line, or its production process to become more efficient, productive, and competitive. • Economies of scale refer to the tendency of the cost per item to go down when items are bought or produced In large quantities.

15. Factors that companies/industries look at when Rationalizing • Consumer demand • A country’s trade balance and business climate • Organizational change • Business activities

16. Developed Nations and Economies • Developed Nations • Developing Nations • Less-developed nations

17. 3.5 Quality control and continual improvement • Japanese name for the concept of continual improvement: Kaizen(Ki-zan). • Kaizen is the belief that to gain competitive advantage, there must be commitment to quality • Promotes everyone working together to make improvements • Helps eliminates waste in all systems and processes od an organization • Does not necessarily mean an increase in investments or costs.

18. Quality control and continual improvement • Some of Deming’s best known management points • Always continuously improve the product or service to stay competitive and create jobs. • Encourage education of the workforce, both on and off the job. • Allow workers to take responsibility for and pride in their work. • Remove communication barriers between management and the factory floor • Encourage teamwork between departments to improve product quality and to create common goals.

19. TQM • Total Quality Management(TOM) – method of managing organizations with a commitment to continuously improve the products, processes, and the work habits of employees; management also is determined to consistently meet customer needs. • MARKET-DRIVEN ORGANIZATIONS are those that respond to market needs by providing customers with high quality goods and services that are low in cost and available when required.

20. ISO • International Organization for Standardization (ISO) • Mission – to promote the development of voluntary standards and related activities in the world, with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological, and economic activity.