FIB ASSIGNMENT

SHIRAZ NAGARIA
Q.1)
1.1)
INDIA: the product has differentiation in the way of their packaging, which enhances the attractiveness of the product.
Moreover, there is demand for boxed juices in the country. The demand gap can be filled with increasing competition
amongst existing players. There are likely chances of product success in India with differentiation applied.
THAILAND: Thailand is a tourist spot. In a country like Thailand with a large number of tourists and visitors, the product, if
moved here could be of advantage. The country currently does not have that many players in the industry
Pakistan: Pakistan is an importer of many consumables and edibles. The country currently does not have anything like the
product of “Fun & Health” fruit juices”, which makes it easy for the company to penetrate.
Indonesia: this country has maximum imports of almost all products. There is competition from foreign players, but the
differentiation in product will certainly help achieve success in the market.
China: china has the largest population in the world. This market constitutes of a large chunk of children in the age category
4-12, which is an advantageous point for “Fun & Health” fruit juices”
 1.2)
• Exporting
Exporting is a typically the easiest way to enter an international market, and therefore most firms begin their
international expansion using this model of entry. Exporting is the sale of products and services in foreign countries that
are sourced from the home country.
• Licensing and franchising
franchising means that you're allowing another person to duplicate your business in another location, and licensing is
when you allow someone else to sell your products. With both licensing and franchising, you will receive a fee from the
person duplicating your business or selling your product.
• Partnerships and Strategic Alliances
Another way to enter a new market is through a strategic alliance with a local partner. A strategic alliance involves a
contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain
way for a certain time to achieve a common purpose.
• Acquisitions
An acquisition is a transaction in which a firm gains control of another firm by purchasing its stock, exchanging the
stock for its own, or, in the case of a private firm, paying the owners a purchase price. In our increasingly flat world,
cross-border acquisitions have risen dramatically.
• New, Wholly Owned Subsidiary
The proess of establishing of a new, wholly owned subsidiary (also called a greenfield venture) is often complex and
potentially costly, but it affords the firm maximum control and has the most potential to provide above-average returns
 Q.2)
2.1)
• Theory of absolute Advantage: Absolute advantage is the ability of an individual, company, region, or country to produce a
greater quantity of a good or service with the same quantity of inputs per unit of time, or to produce the same quantity of a
good or service per unit of time using a lesser quantity of inputs, than another entity that produces the same good or service.
ADVANTAGES:
-Absolute cost advantage
-natural advantage
Acquired advantage

• Theory of comparative advantage: in economics, a comparative advantage occurs when a country can produce a good or
service at a lower opportunity cost than another country.
ADVANTAGES:
-powerful tool to understand how to choose jobs
-if there is not trade, the production limit is small
2.2)ADVANTAGES FOR SA
• The exploitation of a country’s comparative advantage, which means that trade encourages a country to specialize in
producing only those goods and services which it can produce more effectively and efficiently, and at the lowest 
opportunity cost.
• Producing a narrow range of goods and services for the domestic and export market means that a country can produce in at
higher volumes, which provides further cost benefits in terms of economies of scale.
• Trade increases competition and lowers world prices, which provides benefits to consumers by raising the purchasing power
 of their own income, and leads a rise in consumer surplus.
• Trade also breaks down domestic monopolies, which face competition from more efficient foreign firms.
• The quality of goods and services is likely to increases as competition encourages innovation, design and the application of
new technologies. Trade will also encourage the transfer of technology between countries.
• Trade is also likely to increase employment, given that employment is closely related to production. Trade means that more
will be employed in the export sector and, through the multiplier process, more jobs will be created across the whole
economy
Q.3)
• Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and
ideas. These divisions are a constraint to economic growth, especially in developing countries.
These are the major changes that should be made by LS for Regional Integration:
• Trade, investment and domestic regulation;
• Transport, ICT and energy infrastructure;
• Macroeconomic and financial policy;
• The provision of other common public goods (e.g. shared natural resources, security, education).

PROS
• Exchange creation
• Business openings
• Agreement and collaborations

CONS
• Exchange preoccupation
• Loss of national sway
Q.4)
• Command economic system
In a command system, there is a dominant, centralized authority –  usually the government – that controls a significant
portion of the economic structure. Also known as a planned system, the command economic system is common in
communist societies since production decisions are the preserve of the government.
• Market economic system
Market economic systems are based on the concept of free markets. In other words, there is very little government
interference. The government exercises little control over resources, and it does not interfere with important segments of
the economy. Instead, regulation comes from the people and the relationship between supply and demand.
• Mixed system
Mixed systems combine the characteristics of the market and command economic systems. For this reason, mixed systems
are also known as dual systems. Sometimes the term is used to describe a market system under strict regulatory control.
DIFFERENCES

COMMAND ECONOMIC SYSTEM MARKET ECONOMIC SYSTEM MIXED SYSTEM

Dominant, centralized authority Based on concept of free markets. Mixed characteristics of command and
market economy.

Largely owned by public sector Largely owned by private sector Both public and private ownership

Objective: welfare of society Objective: profit maximization Objective: welfare of society and Profit.

Does not promote competition Promotes competition Promotes competition

• MIXED ECONOMY- ECONOMIC STSTEM