MGT 492 Strategic Mgmt for the Mult Enterprise Capstone

Comparative Advantage

International economics is dominated by the idea of comparative advantage – that different endowments and activities in different countries make them relatively more or less efficient at different economic activities.  In other words, countries (and organizations) should specialize in the economic activities where they have a competitive edge against the competition.

In a two to three page research paper in APA style, elaborate on the concept of comparative advantage and how this concept is the determining factor in the long-term stability of a country and profitability of an organization.  In particular, research and determine the following:

• Define and explain the concept of comparative advantage.
• Select any country that interests you.  Then, determine one product or service where the country has a comparative advantage and one where they have a comparative disadvantage.  Discuss the factors within the country that created this comparative advantage, and also the factors that contributed to their comparative disadvantage.
• Finally, where the country has a comparative advantage, detail the strategy the country should adapt to maintain this advantage for the next five years.  Importantly, comparative advantages fade rapidly and countries (and organizations) should constantly strive to maintain and expand their existing comparative advantages.