COMMERCE 4SA3 Chapter Notes - Chapter Case 1: Minimum Wage In The United States, Comparative Advantage
11 Jan 2017
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Labour was cheaper than in us / europe so firms chose to outsource it to india. Now that western firms have invested money in training and r&d in india, the industry has shifted so the comparative advantage is on cost, quality, and high-end r&d expertise. Main factor of production was not home grown. Had abundance of cheap labour but had to be guided by individuals educated in us or. Europe that came back to india: use michael porter"s diamond to analyze the rise of the indian it industry. Barriers to entry: low so easy for india to enter the market, also makes it easy for a lower-cost producer to take market share from india. Power of buyers: western firms made substantial investments to build local operations to work within emerging industry in india, assisted in development of technical and management training, r&d, new product development, joint ventures.
