Classic Comparative Advantage vs. Porter's Competative Advantage Essay

Classic Comparative Advantage vs. Porter's Competative Advantage - Essay Example These five forces explain the rules of competition in any industry. As per Porter, the ultimate aim of any competitive strategy is to cope and change the rules in the behavior of any firm. (Porter’s 5 Forces and Industry Structure, n.d.) The firms create competitive advantage by discovering better and innovative ways and bring them to the market that act as an innovation. These innovations shift the competitive advantage when the rivals fail to perceive new ways of competing or are unable to respond. It is quite obvious that there are noticeable advantages for the early movers. The typical causes that shift the competitive advantage are shifting buyer needs, new technologies, changes in government regulations, shifting the availability or input costs, and the emergence of any new industry segment. A particular firm gains the competitive advantage by performing the strategically important activities in a more cheap way than its competitors. In other words, it is able to deliver similar benefits like its competitors, but at a much lower cost. A firm might also deliver benefits that exceed the benefits of its competitive products. Therefore, competitive advantage enables a firm in order to create greater value for the customers and in turn, higher benefits for itself. Thus, Michael Porter has identified two types of competitive advantages; differentiation advantage and cost advantage. (Competitive Advantage, n.d.) David Ricardo has explained the famous theory of Comparative Advantage in explaining foreign trade. Explaining with the example of two nations and two commodities, he argued that trade is beneficial even if one country has absolute cost advantage over the other country in both the commodities. Ricardo has argued that there are gains from the trade, even if a particular nation specializes completely in the production of a particular good, which has a

The Development of International Managers Assignment

The Development of International Managers - Assignment Example In the present-day organization, because any discussion about how an organization succeeds or fails ultimately comes back to the way individuals are managed, Academics and Practitioners agree that as the dynamics of competition accelerates, people are perhaps the only true source of competitive advantage4. According to, Turner, Keegan & Human (2006:317), for an organization to be effective and successful, the human resource management functions must be integrated into the various organizational strategy. According to this model, the HRM functions its goals and aims, need to be aligned with the strategy of the organization. Here the emphasis is both on the on projects and routine products and services and where the job requirements are well defined and stable. This paper has been initiated to support to examine an ideal training package for an international manager. Using the work of prominent researchers in the field issues taken into consideration when developing training packages for an international manager will be presented. The field of human resource (HR) management is one of the many interesting areas of research that has witnessed a paradigm shift within the last few decades5. Within this area of research, an increasing body of literature contains the argument that high-performance work practices, including comprehensive employee's recruitment, selection procedures, incentives compensation, and performance management systems, and extensive employee's involvement and training can improve the knowledge, skills, and abilities of firms6. Today, with the increasing researchers desires to demonstrate the importance of an effective human resource policy on organization performance research has shifted from a micro level that previously dominated research interest to a more general, strategic macro level7. The term human resource management is not new. It has been widely used by scholars and managers to refer to the set of policies designed to maximize organizational integration, employee commitment, flexibility and quality of work8.