1. International Competitiveness, Productivity, and Quality
Chapter 3
International Competitiveness, Productivity, and Quality

2. BRAINSTORM
Why do countries compete for international businesses to locate in their country?
What kinds of economic and social factors would attract international businesses?
How does the state of Canadian economy/ Canadian businesses affect international businesses operating in Canada?

3. Establishing a Global Presence
Global Presence - when a country is recognized internationally for its reliability, the fairness and integrity of its business dealings, and the standards of its companies goods and services.
Capital - The money or other assets that are available for investment purposes.

4. Establishing a Global Presence
Four questions when developing a Global Presence:
Which product will lead the way as the company launches an international business initiative?
Which market should be entered first?
What is the best way to enter these markets?
How rapidly should the company expand internationally?

5. Competitive Advantage
Is achieved when companies and countries outperform their competitors around the world by:
Improved or superior products
Better pricing
Higher quality
Better service
Uniqueness or profit

6. Gross Domestic Product (GDP)
The total value of all goods and services produced in a country during a specific period
Includes items produced by foreign-owned companies
GDP per capita = GDP / total population

7. Canada and the GDP Canada is lower than US/ Europe, because:
Manufacturing sector is behind
Lack investment in R&D
Slower to adopt new tech
Depend on service rather than goods

8. Achieving Competitive Advantage
Economic Utility - a product’s ability to satisfy the needs and wants of the customer.
Utility can be found in variety of ways
Form Utility (when raw materials are converted into finished products)
Place Utility (product has most value at home rather than far away (e.g ice rinks)

9. Achieving Competitive Advantage
Opportunity Cost - calculates the benefits of the value of the next best opportunity.
E.g. - giving up a job paying $25,000/ year to go back to school for four years.
$25000 x 4 = $100000!
How long will it take to recoup these funds in the new job?
What are the positives / negatives of this scenario

10. Achieving Competitive Advantage
Comparative Advantage - when a company can specialize what it does well at a reasonable cost, e.g. Canada’s fishing industry
Absolute Advantage - a country that can produce a good cheaper will compete most effectively, e.g. Taiwan

11. Factors Affecting Canada’s Competitiveness

12. Factors Affecting Canada’s Competitiveness
Abundance of Natural Resources
Oil
Gas
Forest products
Minerals
Water
Proximity to USA
Open borders, makes for easy and productive trade

13. Factors Affecting Canada’s Competitiveness
Strength of Currency and Exchange Rate
Currency traditionally lower vs. USA
Leads to increased foreign investment and number of foreign exports
A negative is that we pay more to import machinery, components and new technology into the country

14. Factors Affecting Canada’s Competitiveness
Infrastructure
Canada has strong transportation and communication systems that support growth
Allows easier access to products, and ability to communicate with customers / suppliers worldwide

15. Factors Affecting Canada’s Competitiveness
Research and Development
Canada’s R&D inconsistent
Telecommunication and information technology are very strong
Many manufactured goods aren’t produced within Canada

16. Factors Affecting Canada’s Competitiveness
Workforce Characteristics
Level of education and amount of training in the workforce are major factors
Have a high level of literacy, and well -educated workforce
Societal Characteristics
Quality of work
Level of health care
Diverse population

17. Factors Affecting Canada’s Competitiveness
Entrepreneurship
Ingenuity and risk-taking encouraged in Canadian business
Results in a more attractive and competitive environment
Government Involvement
Country’s taxes (GST/ PST) affect negatively
Free trade agreements and willingness to expand trade partnerships are positives
Canada-QUEBEC = Unstable