International Economics Strategies and Balance of Payments
Import Substitution
Import substitution aims to stimulate local industry by protecting it from international competition. By placing tariffs on more expensive imported goods, local production is stimulated, and domestic demand is reserved for domestic products.
The economic rationale for this strategy is the infant industry argument. In sectors with significant economies of scale and dynamic economies, established industries in industrialized countries have a competitive advantage over nascent industries.
Read MoreSpanish Economy During & After Civil War (1936-1950)
1. The Spanish Economy During the Civil War (1936-1939)
The Spanish Civil War erupted due to the failure of the coup led by Franco. Both resulting governments focused on mobilizing resources to finance the war.
Franco’s Advantages
Franco’s side retained control of the army and its senior ranks. They also held the agricultural lands and gained the support of businesses and significant capital. Crucially, they received substantial military support from Germany and Italy, while Great Britain remained
Read MoreDistribution Channels and Supply Chain Management
Distribution Channels
Concepts
Inbound Logistics: The manufacturing process’s supply with raw materials and components.
Outbound Logistics: The physical distribution of finished products from the manufacturer to the final consumer.
These concepts have great economic importance as they are associated with new industry installations.
End Point of Physical Distribution
- Retail store
- Direct delivery to the consumer
Those responsible for operating physical distribution handle predominantly material elements:
- Warehouses
- Transport
Production Management and Environmental Protection in Business
ITEM 6: Area of Production
Production Process
In charge of designing the production process, transforming input to output. Produce in accordance with technical specifications to minimize costs and protect the environment.
Definition: Development of goods or services obtained through the combination of productive factors that serve to cover needs.
Technology
How to combine productive factors to produce. Different ways of producing a good.
Productivity
Yield in the production process. It is the relationship
Read MoreConsulting and Advisory Project for SMEs: A Guide for Engineers
2009 Contest
1. True or False, Comment:
a. “You do not need market research to evaluate my project for the manufacture of aluminum containers for canned foods, since all production is used in canning my own business.”
False. Market analysis is crucial for project evaluation. It defines demand and operating income, which are implicit investment costs.
b. “It is not commercially viable for a project facing a market dominated by one manufacturer to offer a lower price.”
False. The dominant producer’s price
Read MoreInvestment Needs & Funding of Business Projects
The Investment Needs of Business Projects
Investment in Fixed Assets
Investment in fixed assets can be categorized into three groups: start-up and implementation expenses, intangible assets, and tangible assets.
Start-up and Implementation Expenses
We must analyze the costs associated with launching the company. Although not assets in the strict sense, these expenses must be paid. We must consider the costs the company will incur following the completion of all procedures and operations necessary to
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