International and Pacific Asian Business Essay Example | Topics and Well Written Essays - 3000 words - 1

International and Pacific Asian Business - Essay Example These factors contributed to the shift from multinationalism to globalization. Since the millennium, academics and business people were more concern about ways in which globalization could affect domestic and international economy (Tierney 2004; Smith and Yaw 2002, p. 1). The purpose of globalization aims to promote the practice of free trading in the world market by removing barriers like import and export taxes which could prevent business people from taking advantage over the use of natural resources around the world (Nanduri 2006). By linking the trade and development in one country to other countries around the world, globalization makes it possible for businessmen to have the opportunity to maximize the use of the available natural resources and manpower (Krugman & Obstfeld 2009, p. 27, 273). As part of examining the new economy in the international and pacific Asian business, this report will analyze and discuss ways in which international trading is being conducted using the new trade theories as tackled by Paul Krugman. Eventually, trade theories which could accurately explain the competitiveness of business locations will be tackled in details. In line with this, economic theories related to economics of scale, demand led, product life cycle, the significance of monopolistic competition will be applied in different case scenarios by providing real-life examples and evidences. Prior to conclusion, the key trade patterns will be critically evaluated. The New Economy in International and Pacific Asian Business Because of globalization, fast economic growth and continuous business expansion can be observed in the modern international and pacific Asian businesses. In order to gain competitive advantage over other businesses in the world market, the new economy in International and pacific Asian businesses are heavily focused over the need to rely on the practice of trading goods and services within and outside a given country. As part of increasing the com petitive advantage of each business, large-scale companies are competing with one another not only in terms of acquiring the cheapest yet high quality raw materials but also in terms of hiring competitive and highly skilled employees at a minimum wage level (Steger 2003, p. 37). As a basic rule in business, high profit can be achieved not only when a company is able to produce enough supply based on the market demand but also when a company is able to keep its business operational cost at a very low price. Specifically the low operational cost can be achieved either by maximizing the use of the available human resources through the use of high technology and machineries or through economies of scale. Economies of Scale As explained by Krugman and Obstfeld (2009, p. 114), economies of scale in microeconomics is all about the cost advantage each businesses could earn by maximizing the use of its available technology and human resources. In line with this, a company is able to keep the unit price of certain product low each time the buyer purchases specific item by bulk. In other words, reducing the unit cost of a product is possible because producing a single item by volume can be manufactured on a large scale without the need to spend more money spent human resources. For