Competitiveness of Resources at Business Disposal Summary

Competitiveness of Resources at Business Disposal
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Competitiveness of Resources at Business Disposal
Companies are striving to maximize their output to the market through different business strategies in the current business world. Business strategies are critical for adopting a specific business strategy offering a competitive edge over other businesses. In the 21st century, adopting and maintaining a competitive edge by companies is brought about by the primary application of intangible and tangible resources at the disposal of a firm (Angwin & Cummings, 2017). In support of Angwin and Cummings, Barney (1991) argues that rare and valuable resources significantly contribute to offering a business an upper hand in developing and maintaining a competitive advantage. To identify the necessary resources required for market penetration, Lynch's Hierarchy of Resources assessment is critical. Through Lynch's Hierarchy, the model seeks to investigate the competitiveness of resources at business disposal. Lynch's model, in addition, advocates for businesses to exploit their internal resources to achieve a breakthrough within an industry.
In the present era, many ventures are trying to expand the scope of their business activities. Many businesses during their inception operate within certain geographical limits, such as within the boundaries of a nation. As a business expands, however, they need to approach foreign markets market is up for consideration. The matrix involved in foreign markets is complex as the legal environment, demographics, and political environment are not uniform across nations. In an attempt by businesses to expand from the domestic market to foreign markets, strategies are critical. In the penetration of new markets, ventures need to formulate and implement their feasibility studies strategies. Unlike domestic markets, foreign markets experience stiff competition as many reputable and big businesses are involved. These big businesses involve international companies and multi-national organizations with relatively huge resources at their disposal. Business strategies are crucial to counter strategic issues as businesses venture into diverse and specific markets.
According to the theory of comparative advantage as explained by Ricardo, why is trade always possible between two countries, even when one is inefficient compared to others? 
In economics, the law of comparative advantage refers to a party's ability (an individual, a firm, or a country) to produce a particular good or service at a lower marginal cost and opportunity cost than another party. It can be contrasted with an absolute advantage, which refers to a party's ability to produce a particular good at a lower absolute cost than another (Kiyota, 2011). It can be deduced from the above explanation that even if two countries produce similar products, a less disadvantaged country should specialize in producing a product whose cost of production is equal or relatively equal compared to another advantaged trading partner country in producing the same product. Similarly, a country endowed with vast resources in producing a specific product compared to another inferior country to produce the same product should specialize mainly in that product to maintain consistency and favorable terms of trade.
Discussed below are the various reasons why trade is always possible between two countries even if one is inefficient compared to others:
Nature of commodity being exported
Normally, the prices of primary products tend to be lower compared to those of manufactured goods. A country whose main export is raw materials, such as unprocessed agricultural products, is likely to experience unfavorable trade terms. On the other side, a country that exports fished products is expected to participate in favorable trade terms.
The product's nature determines whether trade between countries is possible, taking into account a country's ability to modify the product, e.g., through processing (Foo10). A good example where a balance of trade exists, which provides a suitable environment for trade between countries, is the majority of African and European nations. Many economies in Africa are agricultural but lack specialization in modifying their products to final products in contrast to European countries, which have the technical know-how in processing the raw materials from Africa. With this perfect example, Africans will avail their raw materials, for example, the farm produces, to Europe to earn foreign exchange.
Nature of commodity being imported
As pointed out in (a) above, some commodities such as manufactured goods command higher prices than others in the world market. A country that imports such expensive goods may experience adverse terms of trade, while imports cheap materials may experience favorable terms of trade.
In Europe, the raw materials are processed into finished products and again traded with other countries, including African nations.
However, this situation is biased as European nations tend to have an upper hand over Africa as they wil...