CAE 7: Managerial Economics

Module 6
Name: Villaroman, Ron Vincent B. Date: November 14,2021
Course/Year/Section: BSA 2 – 1 Professor: Prof. Romeo Mangahas

1. Define Competitive Advantage. Identify the competitive advantage of the following:

a. Singapore
 Singapore's achievements in achieving the coveted #1 rank, according to Asia
link Business, are undoubtedly worth celebrating. Especially when one
considers that Cuba was more economically advanced than Singapore in
1959, the year Castro and Lee Kuan Yew took control in Cuba and Singapore,
respectively. Cuba today ranks towards the bottom of most Latin American
economic metrics, whereas Singapore is a global leader in a number of areas,
including human capital, ease of doing business, and now competitiveness.

b. Japan

 The Japanese, according to Strategy Business, have long demonstrated an

intrinsic ability to remake themselves in ways that often involve painful
changes. They believe there is persuasive evidence that they are already
doing so, harnessing many of the nation's existing capabilities and
advantages to position their enterprises as leaders in the New Economy
emerging from the postindustrial tangle.
c. Korea
 According to McKinsey & Company, it transformed from one of the most
destitute nations in the area to one of the most lively, a manufacturing
powerhouse that has practically eradicated poverty, starvation, and illiteracy
in the four decades following the Korean War. In a fast-growing area, Korea
has raised its per capita GDP faster than any of its neighbors since the 1960s.
d. Taiwan
 Innovation has always been a source of competitive advantage for Taiwan,
according to the Carnegie Endowment for International Peace. It has also
served as a solid foundation for US businesses, investors, and government
officials to support Taiwan's development while extending mutually
beneficial ties. However, both Taiwan's innovation advantage and the
prospect of jointly developed, technologically disruptive collaborations face
obstacles. For example, Taiwan's technology ecosystem has been hollowed
out in recent decades as manufacturing of personal computers (PCs),
component systems, and mobile devices has moved across the Taiwan Strait
to mainland China. However, Taiwan's innovation ecosystem has struggled to
nurture new generations of companies to compensate for the loss of
 electronics manufacturing jobs. Internationalization has been a recurring
difficulty for Taiwanese companies, despite a freewheeling startup culture.
Taiwan's innovative future is also threatened by technological development
and Beijing's political issues.

e. Indonesia
 According to the Jakarta Globe, Indonesia's working-age adult population will
stay constant in the coming decades. Working-age people account for almost
two-thirds of Indonesia's current 260 million population, which is more than
in other nations in the region such as Thailand or Singapore. Indonesia
presents potential for the tourist, entertainment, hospitality, manufacturing,
and education industries since working individuals have more spending
power. Rapid urbanization and a political focus on infrastructure
development present opportunities in the construction, utility, and
transportation industries.
f. Malaysia
 Malaysia is undergoing a period of continuous economic growth, according
to SSO Network, and considerable transformation is a necessary part of the
process. This year, the government wants to adopt a minimum wage in the
private sector, the government stated intentions to raise female employment
participation from 46 percent to 55 percent, and the country's GDP is
expected to climb by 5.5 percent. While there are many positive signs that
the economy will continue to thrive, there are also reasons to be concerned
about inherent flaws in technical investment and talent management.
g. Vietnam
 According to China Briefing, the state of manufacturing in Vietnam today is
so similar to that of China ten or more years ago—when low-wage, low-tech,
low-added value manufacturing acted as a magnet for FDI—that many
foreign investors with existing China operations are actively inquiring about
the payoffs of moving to Vietnam. Vietnam has been well-positioned to pick
up the slack as China goes farther up the value chain in manufacturing. As a
result, between 2005 and 2010, Vietnam's manufacturing sector increased at
a compound annual growth rate of more than 9%, accounting for 25% of
GDP.
h. Thailand
 According to the OECD Library, Thailand's competitiveness shifted from
agriculture to industrial products production between 1980 and the mid-
1990s. This transformation was followed by rapid increases in labor
productivity, with annual rates typically exceeding 8%. Thailand's
productivity has declined in recent decades as labor movements from
agriculture to more productive manufacturing sectors have ceased to benefit
the country. Nonetheless, agriculture employs one-third of the population,
and while the government plans for Thailand 4.0, it is critical to ensure that
 the agrarian population, who already has the lowest income in the country,
does not fall farther behind.
i. Cambodia
 Tourism has always drawn the largest foreign investment, according to HG
Legal Resources. Cambodia attracts nearly a million international visitors
each year, thanks to the world-class Angkor Wat temple complex. While
temple tourism has already attracted significant international investment,
there is still a lot of room for growth. Furthermore, the Cambodian labor
force provides a competitive advantage for many businesses. With cheap
labor costs and fast rising educational levels, the country can offer investors
in labor-intensive industries lucrative returns.
j. Philippines
 The Philippines has the following competitive advantages, according to the
Republic of the Philippines:

 Quality Manpower and Resources

One of the most significant advantages the Philippines has over any other Asian country is its
labor. With higher education as a priority, the country's literacy rate is 94.6 percent, which is
among the highest in the world. The Philippines is the world's third largest English-speaking
country, with English being taught in all schools. Every year, around 350,000 graduates add to
the professional pool.

 Strategic Business Location

The Philippines is situated in the center of Asia, which is currently the world's fastest
expanding area. It is within four hours' flight time from the region's major capitals. It is a
major entrance point to over 500 million people in the ASEAN market, as well as a
gateway of international maritime and air lanes appropriate for European and American
firms, because it is located at the crossroads of eastern and western business.

 Liberalized and Business-Friendly Economy

In practically all industries, an open economy enables 100 percent foreign ownership,
and it promotes a Build-Operate-Transfer (BOT) investment system that other Asian
countries have adopted. The banking, insurance, shipping, telecommunications, and
power industries have all been deregulated, and government businesses are being
privatized. The corporate income tax has been decreased to a current rate of 32
percent, with enterprises in Special Economic Zones paying only a 5 percent total tax
rate. Multinationals seeking for a regional headquarters can take advantage of tax
breaks and duty-free importing of certain equipment and materials.

 Developing Infrastructure for Global Growth

The Philippine economy is distinguished by its well-developed communication, transportation,
business, and economic infrastructure, which connects the three major islands. Liberalization of
inter-island shipping and domestic aviation, which are highly accessible by air, water, and
cyberspace, has resulted in enhanced facilities and services. The container terminals are
designed to manage freight flow as efficiently as possible. With fiber optic cable as the primary
backbone network and satellite as a backup, communication enables redundant worldwide
access 24 hours a day, seven days a week. Economic changes prioritize regional development,
transforming outlying communities into business hubs. The groundbreaking BOT legislation
permits private investors to develop and manage infrastructure before handing it over to the
Philippine government after a certain time period.

 Hospitable Lifestyle

In a tropical location brimming with the greatest of western amenities, enjoy the best of sun,
sea, sand, and style. Expats go to the Philippines to enjoy the companionship of the friendliest
people in the region, as well as the country's openness to many cultures and a distinctively
global viewpoint. Business centers, housing, schools, hospitals, shopping malls, hotels and
restaurants, beach resorts, and recreation facilities are all accessible and cheap to expats.

 Unlimited Business Opportunities

The Philippines is the natural and most strategic site for enterprises seeking access to the
massive ASEAN market and its vast trade potential, as Asian economies integrate under the vast
framework of the ASEAN Free Trade Agreement (AFTA). The Philippines has improved and
primed different regions for investment, and it boasts a vibrant consumer market accustomed
to a diverse range of product options resulting from a competitive domestic economy.

2. Differentiate Macro and Micro Competitive Advantage? When it will apply each?

 Every corporate organization is a product of the environment in which it

functions. Because there are many aspects that surround the business, which
is known as the business environment, no entity can function in isolation. It is
divided into two groups: the microenvironment and the macroenvironment.
The macro environment has an impact on the operation of a specific business
to which they are related, whilst the latter has an impact on the operation of
all business entities operating in the economy.

 While the microenvironment has a direct impact on company activities, the

macroenvironment is a broad business environment that affects all types of
businesses. It is critical to understand the business environment in order to
comprehend the impact of numerous influences on the firm. To learn the
difference between microenvironment and macroenvironment, read the
following article.