Adam Smith Adam Smith describes trade taking place as a result of countries having absolute advantage in production of particular goods, relative to each other. David Ricardo The law of comparative advantage was first proposed by David Ricardo. The Ricardian theory of comparative advantage became a basic constituent of neoclassical trade theory.
Nature Of Stability Strategy A firm following stability strategy maintains its current business and product portfolios; maintains the existing level of effort; and is satisfied with incremental growth.
It focuses on fine-tuning its business operations and improving functional efficiencies through better deployment of resources. It decides to serve the same markets with the same products; It continues to pursue the same objectives with a strategic thrust on incremental improvement of functional performances; and It concentrates its resources in a narrow product-market sphere for developing a meaningful competitive advantage.
Adopting a stability strategy does not mean that a firm lacks concern for business growth. It only means that their growth targets are modest and that they wish to maintain a status quo. Since products, markets and functions remain unchanged, stability strategy is basically a defensive strategy.
A stability strategy is ideal in stable business environments where an organization can devote its efforts to improving its efficiency while not being threatened with external change.
In some cases, organizations are constrained by regulations or the expectations of key stakeholders and hence they have no option except to follow stability strategy.
Generally large firms with a sizeable portfolio of businesses do not usually depend on the stability strategy as a main route, though they may use it under certain special circumstances. They normally use it in combination with the other generic strategies, adopting stability for some businesses while pursuing expansion for the others.
However, small firms find this a very useful approach since they can reduce their risk and defend their positions by adopting this strategy. Niche players also prefer this strategy for the same reasons. Conditions Favouring Stability Strategy Stability strategy does entail changing the way the business is run, however, the range of products offered and the markets served remain unchanged or narrowly focused.
Hence, the stability strategy is perceived as a non-growth strategy. As a matter of fact, stability strategy does provide room for growth, though to a limited extent, in the existing product-market area to achieve current business objectives.
Implementing stability strategy does not imply stagnation since the basic thrust is on maintaining the current level of performance with incremental growth in ensuing periods.
The industry or the economy is in turmoil or the environment is volatile. Uncertain conditions might convince strategists to be conservative until they became more certain.
Environmental turbulence is minimal and the firm does not foresee any major threat to itself and the industry concerned as a whole.
The organization just finished a period of rapid growth and needs to consolidate its gains before pursuing more growth. The industry is in a mature stage with few or no growth prospects and the firm is currently in a comfortable position in the industry Rationale for Using Stability Strategy There are a number of circumstances in which the most appropriate growth stance for a company is stability rather than growth.
Stability strategy is normally followed for a brief period to consolidate the gains of its expansion and needs a breathing spell before embarking on the next round of expansion. In sharp contrast, under regimes like feudalism (a form of society-with-markets) labour was not a commodity but the property of the landlord.
Indeed, labour had no price (i.e.
no wage was paid) and its activities were commanded, or commandeered, by the person who had inherited the right to do so. Stability strategy does entail changing the way the business is run, however, the range of products offered and the markets served remain unchanged or narrowly focused.
Monopolistic Advantage Theory an approach in international business which explains why a particular national firm is able to compete with indigenous competitors in overseas market. He started by looking at international investments which classified into two: portfolio investment and direct investment.
Control is the key factor which differentiates one another. Monopolistic Advantage Theory an approach in international business which explains why a particular national firm is able to compete with indigenous competitors in overseas market.
He started by looking at international investments which classified into two: portfolio investment and direct investment.
Monopolistic Advantage Theory 11 Country similarity theory was developed by a Swedish economist named Steffan attheheels.comy similarity refers to what? Is it similarity of location or culture or political/ economic interests or technological capability (that is acquired advantage) or natural advantage or lack of it?
abstract. Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.