Business // Quantas Role in the Economic Crisis
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Quantas Role in the Economic Crisis
The dawning of liberalization and globalization opened many countries’ door on free trade. Dating back to as early as the barter system and the Spanish’s galleon trade, the concept of international trade and seeking market for one nation’s excess in production has been implemented. At present, countries from different parts of the globe now participate in trade, generating a portion of their revenues from this type of transactions. In fact with the proliferation and growing demand for trading, it eventually paved the way for the creation of organizations that shall overlook the best interest of it member countries who participate in international trade. One example of this organization is the World Trade Organization (WTO).
The World Trade Organization is an international group that is responsible in the implementation of rules concerning trade among nations. Founded in 1995, to officially replace the General Agreement on Tariff and Trade, the WTO was institutionalized as per the provisions stated under the Marrakech Agreement. It provides framework for trading regulations, negotiations and the formalization of trade among nations. Thus, with organizations like the WTO, trade liberalization and globalization has immensely improved the economy of many countries following the aftermath of the global economic crisis.
However, the concern that most critics have on the growth of the global economy and competitiveness is not brought about by fierce product or market competition but by the increasing dominion that Asian drivers have. This dominion of Asian countries like Singapore, China and Japan in the global trade has completely paralyze the development and participation of countries from the South particularly from the Sub-Saharan region, Latin America and Africa.
Although international organizations on trade like the WTO secure to protect every nation’s interest who participate in global trading, this has not been sufficient to implement that small-scale economies will be given equal participation in trade. Notwithstanding the fierce competition brought about by Asia’s machinations to capitalize on delivering products and services above and beyond quality, these countries also have the capacity to engage in bilateral agreements with other nations which can strengthen international relations which could eventually be utilized to serve during trading transactions (Colander, 2010).
Taking a look for example on countries like Malaysia and Singapore and their trade relations, one could say that both Asian countries had the tendency to paralyze all other entrants to either countries because it already operates on a system where one benefits from the other’s potentials and capacity. Given the trading relation of Malaysia and Singapore, at present Malaysia was Singapore’s largest trading partner which was also a member of the ASEAN. Although, it was unlikely for ASEAN countries to participate in bilateral trade, because it is more competitive than it is cooperative in nature, these two countries have been trading partners since 1988. In fact, Malaysia currently enjoys the number one position among Singapore’s trading partners both in export and import transaction. In 2006 Malaysia received 1.47% of the total export products of Singapore accounting to US$42 billion .
Coursing through history, Malaysia and Singapore’s relationship has been intensified since the late1980’s when Singapore started transferring its labor-intensive industries to Malaysia’s territory in Johor. It cannot be denied that Singapore’s limited territorial space and high cost of labor, not to mention the shortage in manpower limits the country’s productivity. Malaysia took advantage of this and offered Johor to cater to Singapore’s need for industrial space and manpower, hoping that this step will warrant long-term relation which can drive progress for Johor. By virtue of this condition, despite other entrants because of Malaysia’s policies on trade as imposed by its government, preference shall always be given to Singapore if only to preserve the latter’s investments in Malaysia.
Conclusion:
Base on the readings on product differentiation and its relation to competitive advantage, it establishes that it plays a crucial role in securing the success of an organization. It is therefore the proponent’s recommendation that organizations must invest on machinations that will create a unique brand name and image to a product. An organization, especially those with enough resources to sustain differentiation must fully utilize this means in order to secure a stable spot in the industry. This was the same with the case of Nike, Ferrari and other big names in their field. Organizations must know which needs of the customers are no price-sensitive and focus on that.
The above stated recommendations will be effective should organizations conduct an extensive research and development (R&D) team who will supervise in assessing the needs and demand of the consumers. This team of experts will also be responsible in creating and developing products that will address the results of their extensive research. In addition, organizations must hire highly skillful and special trained workforce who will work on the product. Finally, to secure the new product from being copied, the organization must secure a patent for their product.
Reference
Colander, D. (2010) Macroeconomics, 8/e. McGraw-Hill Irwin.
Colander, D., Gamber, J. and Copeland, D. (2007). Macroeconomics Study Guide, 7/e. McGraw-Hill Companies.
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