Võ Đặng Phúc Duyên - 1752143

INDIVIDUAL ASSIGNMENT 1
1. Discuss Questions:
Question 1: Describe the shifts in the world economy over the past 30 years. What are the implications
of these shifts for international businesses based in Vietnam?

- The world economy over the past 30 years shifted sharply.

- From the closed economy to internationally which falling barriers to cross border trade and
investment.
- Nowadays, various countries are connected, combined in term of culture, business systems,
lifestyle to sharing and growth up together.
- One of most influences factors that make the sharp shift in the world economy is the
technological change:
o Telecommunication
o Transportation
o Information transition
- Over the past 30 years, Vietnam has transformed the country from one of the poorest in the
world into a lower middle-income nation.
o In 2018, GDP growth reached a 10 year high ( 7.08%).
o While they will slow global economic growth, they could also divert more investment
from China to Vietnam. The economy will expand 6.7% in 2019 and 6.5% in 2020, which
is unchanged from last month’s forecast.

Question 2: “Ultimately, the study of international business is no different from the study of domestic
business. Thus, there is no point in having a separate course on international business.” Evaluate this
statement.

I completely disagreed with this statement. I think they have some different points like international is
very general and complex than domestic business throughout its characteristics.

Domestic business is as a business transaction but limited in their own countries. The customers and
producers both from same region. The trade is based on their practices, law and customs. Moreover,
they can reduce transaction cost, save time, low transportation cost, encourages small-scale enterprises,
etc.

International business is as a business transaction occur beyond the borders of the home country. The
customers and producers from difference countries. They can expand the trade and investment among
countries. Moreover, they have larger capital investment.

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Question 3: How have changes in technology contributed to the globalization of markets and
production? Would the globalization of production and markets have been possible without these
technological changes?

1st: steam, engine

2nd: Electronic, energy

3rd: Internet + information

4th: Robot, big data, IoT, AI

One of most influences factors that make the sharp shift in the world economy is the technological
change:

- Telecommunication: Make people from all over the world can easily to contact with each others.
- Transportation: Modern tools of communication and transport allow companies to conduct
business not only locally but also globally.
- Information transition

Question 4: If current trends continue, China may be the world’s largest economy by 2030. Discuss the
possible implications of such a development for:

a. the world trading system,

b. the world monetary system,

c. the business strategy of today’s European and U.S.-based global corporations, and global commodity
prices.

a. the world trading system,

If the country become the world’s largest economy by 2030 -> the world trading system more extent.

Becoming the developing country, China gained a lot of benefits and investment from the world trade
organization.

If becoming the developed country, they will not get any benefits.

China plays the vital role in regulation in trade policies.

b. the world monetary system

Trade between different countries could be affected by China

The currency Yuan might dominate the dollar value and would become a bench mark currency of the
world.

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c. the business strategy of today’s European and U.S.-based global corporations, and global
commodity prices.

I think other countries should follow China’s strategies.

Although, the resources, price, condition, technology and human resources, China strategies is a
standard to adapt.

Question 5: Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.

Mercantilism: economic nationalism for the purpose of building a wealthy and powerful states.

Mercantilism: a country should be maintain a trade surplus, imports are limited by government
intervention.

Bankrupt theory because:

- Inconsistent with phrase “globalization”: it will exclude their goods from free access to the
mercantilist country’s markets -> difficult to export because oppressive quotas and tariffs.
- it hurts the consumers in the mercantilist country.

Question 6: What are the potential costs of adopting a free trade regime? Do you think governments
should do anything to reduce these costs? What?

Free trade: manufactures products without import limiting like duties and tariffs.

Potential costs : job losses (unemployment).

Government can encourage industries to produce what they can produce at the lowest cost. (Develop
internal industry)

Question 7: Drawing upon the new trade theory and Porter’s theory of national competitive advantage,
outline the case for government policies that would build national competitive advantage in
biotechnology. What kinds of policies would you recommend that the government adopt? Are these
policies at variance with the basic free trade philosophy?

Porter’s theory imply that education, a transportation infrastructure, or competitor domestic market
should be considered and supported by government in order to promote the creation of competitive
industries.

New trade : 5 companies invest for water treatment lead to affordable costs.

Question 8: . The world’s poorest countries are at a competitive disadvantage in every sector of their
economies. They have little to export. They have no capital; their land is of poor quality; they often have
too many people given available work opportunities; and they are poorly educated. Free trade cannot
possibly be in the interests of such nations. Discuss.

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Poor countries: as an developed countries. These countries are very poor, in which per capita real
income is low. They don’t have any competitive advantage in each sector of their economies.

Characteristic of poor countries:

o Low capital:
Industries are not developed.
Resources of country are not developed.
o Land:
They can’t use this for industries.
o Work opportunities:
Heavy population pressure.
The natural growth rate of population in these countries is very high due to its prevailing high
birth rate and falling death rate.
 Living standard : slow; Poverty: increase; Unemployment rate: High;…
o Education:
Not developed.

2. Research Tasks:
Question 1: You are working for a company that is considering investing in a foreign country. Investing
in countries with different traditions is an important element of your company’s long-term strategic
goals. As such, management has requested a report regarding the attractiveness of alternative countries
based on the potential return of FDI. Accordingly, the ranking of the top 25 countries in terms of FDI
attractiveness is a crucial ingredient for your report. A colleague mentioned a potentially useful tool
called the Foreign Direct Investment (FDI) Confidence Index. The FDI Confidence Index is a regular
survey of global executives conducted by A.T. Kearney. Find this index, and provide additional
information regarding how the index is constructed.

The top 25 countries in FDI Confidence Index as follows :

Rank Country Score 13 Switzerland 1.59

1 United States 2.10 14 Denmark 1.58
2 Germany 1.90 15 Sweden 1.55
3 Canada 1.87 16 India 1.54
4 United Kingdom 1.85 17 South Korea 1.54
5 France 1.79 18 Belgium 1.54
6 Japan 1.78 19 New Zealand 1.52
7 China 1.72 20 Ireland 1.52
8 Italy 1.67 21 Austria 1.50
9 Australia 1.67 22 Taiwan 1.50
10 Singapore 1.65 23 Finland 1.50
11 Spain 1.62 24 Norway 1.49
12 Netherlands 1.61S 25 Mexico 1.49

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The Index is constructed using primary data from a proprietary survey of 500 senior executives of the
world’s leading corporations. The rankings are calculated based on questions about the respondents’
companies’ likelihood of making a direct investment in a market over the next three years.

Question 2: The World Trade Organization International Trade Statistics is an annual report that
provides comprehensive, comparable, and updated statistics on trade in merchandise and commercial
services. The report allows an assessment of world trade flows by country, region, and main product or
service categories. Using the most recent statistics available, identify the top 10 countries that lead in
the export and import of merchandise trade, respectively. Which countries appear in the top 10 in both
exports and imports? Can you explain why these countries appear at the top of both lists?

Merchandise exports (Current US$)

Rank Country
1 China
2 US
3 Germany
4 Japan
5 Netherlands
6 South Korea
7 France
8 Hong Kong
9 Italy
10 UK

Merchandise imports (Current US$)

Rank Country
1 US
2 China
3 Germany
4 Japan
5 UK
6 France
7 Netherlands
8 Hong Kong
9 South Korea
10 India

 China, Germany, Japan, Netherlands, South Korea, France, HongKong, US, UK appear in the
top 10 in both exports and imports.
 Most of the countries on the list have advanced technology, so their products have quality
and prestige in the world market.

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Question 3: Food in an integral part of understanding different countries, cultures, and

lifestyles. You run a chain of high-end premium restaurants in Vietnam, and you are looking for
unique Australian wines you can import. However, you must first identify which Australian
suppliers can provide you with premium wines. After searching through the Australian supplier
directory, identify three to four companies that can be potential suppliers. Then develop a list of
criteria you would need to ask these companies to select which one to work with.

Shiraz (Syrah)
Cabernet Sauvignon
Chardonnay

Where is winery?
How many bottles can company produce per one month?
What is the best transportaion do I need to use when importing wine?
How much is the cost per one bottle?
Is there any survey about flavor of wine?
How much is the transportation fee?

3. Case study
Case 1:

a. Why is the manufacturing of flat-panel TVs migrating to different locations around the world?

b. Who benefits from the globalization of the flat-panel display industry? Who are the losers?

c. What would happen if the U.S. government required that flat-panel displays sold in the United States
had to also be made in the United States? On balance, would this be a good or a bad thing?

d. What does the example of Vizio tell you about the future of production in an increasingly integrated
global economy? What does it tell you about the strategies that enterprises must adopt to thrive in
highly competitive global markets?

a. Because they wanted to find the way to cut down costs with the same quality of flat-panel displays.

b. Consumers are the one who gets to benefit from the globalization of the flat-panel display industry.
Thanks to the competition, so the price falls sharply. Producers are still finding the ways to cut costs and
become more efficient. In addition, the intense competition has forced companies that still make
traditional cathode ray televisions to lay off employees as well.

c. If the US government required that flat-panel displays sold in the US, the price will increase. However,
this situation can create more jobs for American but the sale of this product will fell. Moreover, they will
focus on the television sector, other areas of the economy could negative affects.

d. Vizio’s example tells me the way how to conduct and operating the firm in a competitive market now.
Vizio’s strategies make me realize that there are no the best place, just wherever it makes the most

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sense. Vizio is never satisfied with the status quo. To remain competitive, Vizio continually looks for
better ways to produce its product.

Case 2:

a. What are the benefits to Boeing of outsourcing manufacturing of components of the Boeing 787 to
firms based in other countries?

b. What are the potential costs and risks to Boeing of outsourcing?

c. In addition to foreign subcontractors and Boeing, who else benefits from Boeing’s decision to
outsource component part manufacturing assembly to other nations? Who are the potential losers?

d. If Boeing’s management decided to keep all production in America, what do you think the effect
would be on the company, its employees, and the communities that depend on it?

e. On balance, do you think that the kind of outsourcing undertaken by Boeing is a good thing or a bad
thing for the American economy? Explain your reasoning.

a.

They can reduce overhead costs, production costs and increase efficiency by cutting down development
time. Moreover, they ensured that fixed costs remain stable.

It helps to be giving business to other countries where there are Boeing’s customers, so it makes easier
for them to use Boeing’s aircraft. Also they can unburden themselves of some of the risks and costs
associated with developing production facilities.

b.

Costs:

- Fixed costs: stable

- Overhead costs: office space cost, limiting the number the number of employees.
- Production costs: lower labor costs and economies scale for contractors.

Risks: associated with outsourcing.

- Poor quality
- Failure to delivery.
- Lack of control: result problem with deadlines and process control.
- Contractors: from different countries, have different cultures -> have problem accounted for
problem with quality and deadlines.

c. For the component part manufacturing assembly, Boeing wouldn’t have benefits because assembling
in other nations only causes more time to complete. If Boeing decides to outsource about that part,
other nations can earn money so they are potential winners.

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d. The company will have to find and hire other company to replace with 50 outside suppliers spread
around the world. It causes they have to spend more money for salary and communities would become
more complex. Eventually, they cannot focus on their specialized part.
e. I think the kind of outsourcing undertaken by Boeing is a good thing for the American economy.
Although they had to pay penalties for late deliveries, they could control the process schedule before
that happened. If they use outsourcing in a right way, they can reduce the cost. It means outsourcing
makes company focus on what they can do the best.

Case 3:

a. Do you think China is pursuing an economic policy that can be characterized as neo-mercantilism?

b. What should the United States, and other countries, do about this?

a.

Neo – Mercantilism: is a modern form of mercantilism focused on encourages exports, discourages

imports, control capital movement and centralizes currency decision in the hands of a central
government. These countries will allow for import the raw materials but will attempt to limit the import
the final goods.

Zero sum game and Free Theory is at odds. Neo – Mercantilism is based on Zero Sum game, and this
focused on becoming a net exporter and increased domestic surplus capital.

I think China is pursuing neo mercantilism, because of focused on producing finished goods for sale in
others country. They limit the import to China by heavy tariffs -> limited to competitions with
domestically items.

Others countries can entrance to China market as a partnership. This allow China have an advanced
technology from foreign investment, so produce the final completed products -> net flow of capital.

b.

Other countries need to be concerned with this strategies. They need to ensure that China does not
establish monopoly in areas of production. Because the product has a lower price than others ->
foreigners can cease of production because they can’t compete with Chinese price.

China can increase the price and stop to the sale of critical items to prepare for the war. For those
countries need this items, they faced with many challenges. -> it’s one of the way to drive competitors
out of business.

Case 4:

a. Who benefits from the outsourcing of skilled white-collar jobs to developing nations? Who are the
losers?

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b. Will developed nations like the United States suffer from the loss of high-skilled and high-paying jobs?

c. Is there a difference between the transference of high-paying white-collar jobs, such as computer
programming and accounting, to developing nations, and low-paying bluecollar jobs? If so, what is the
difference, and should government do anything to stop the flow of white-collar jobs out of the country
to countries such as India?

a.

Developing nations getting these white collar are the one who benefits from the outsourcing of skilled
white –collar jobs to developing nations. It will create a lot of opportunities for getting jobs in this
country. Moreover, the companies can reduce the labor cost and increase their products -> they can
take advantage competition on the global market.

The loser is the country who get lost white collar. The people who held those white collar job prior to
them moving to a developing country will lost their jobs.

This make disadvantage to themselves and the whole country.

b.

In US, they still suffered from the loss of high-skilled and high-paying jobs. Because, if they do that, they
can make the lower costs, the profit will be increased and expand more -> take advantage competition
in the market.

The company will create more jobs in the developed country like US.

c.

Yes, they have some different points.

Like the low-paying jobs are outsourced because they have a large workforce and required a lot of
money to find suitable employees.

For the high-paying jobs require more money to pay each individual employees.

 The government should prevent this from beginning. If some companies are not necessaries
to do this, should be limited. Each countries need jobs for their own demand as well as
helping out globally.