Question

Describe how a business may use the trade theories to develop its business strategies. Use Porter’s four determinants in your explanation.

Answer 1

Porter’s four determinants to develop the business strategies :-

1) : Factor conditions :- Local market resources and capabilities. A business could look at this as potential employees who have ideas as well as skills in order to make the business succeed.

2) : Demand conditions :- Local market demand conditions dictate, A business would look at this as a way to see the size of the customer base as well as the nature of the costumers in order to find what interests them. This would also lead to innovation of ideas and improvements in their products as well.

3) : Local suppliers and complementary industries :-Related and supporting industries would lead a business to possibly work with others in order to exchange ideas between one and other.

4) : Firm characteristics :- Strategy structure and rivalry, A business could use this as a way to refer to the find the competition. Competition leads a business to finding ways in which they can increase production or to develop something(Carpenter, M. &Dunung, S.P.)