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
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.