Critical Thinking Essay on Competitive Advantage in the Global Economics

Comparative advantage is one of the concepts that greatly influence international trade by ensuring a nation can achieve sustained economic success and prosperity (Kia, 2010). The Kingdom of Saudi Arabia has a natural abundance of oil that gives it a superior feature that guarantees unique benefits in global competition (Cavusgil et al., 2016). The kingdom's economy features national oil companies and sovereign wealth funds with significant state control hence firms wishing to join its economy must play ball (Steve, 2007). State capitalism in the kingdom has forced most companies to go silent on various issues to win the confidence of the state (Pankaj, 2011). There are various strategies that work in international business such as striking alliances, capitalizing on state capitalism by localizing recruitment and raw materials as well diversifying and building for long stay (Bremmer, 2014).

Most born-global firms have characteristics such as high level of activity in international markets close to their founding, relatively small size due to limited financial and tangible resources (Lydia, 2010). Most of these firms are technological where it is present across all sectors, and they emphasize on differentiation as a strategy for producing superior product quality that targets niche markets (Cavusgil et al., 2016). Various factors such as few trade barriers and standard needs and tastes across potential country markets are some factors that have seen born firms such as Instagram experience quick global success (Efrat, 2007). Relative fast-mover advantages due to operation in a knowledge-intensive or high technology sector is another important factor (Gerschewski et al., 2015). A young company can greatly benefit by entering the international market soon after its inception by gaining a wide and limitless customer base that will play a role in sustaining the company and ensure its growth and success through a guaranteed market (Reynaldo, n.d.)

References

Bremmer, I. (2014). The new rules of globalization. Harvard Business Review.

Cavusgil, S. T, Knight, G., & Riesenberger, J. (2016) International business: The new realities

(4th ed.). Boston, MA: Pearson. ISBN: 9780134324838

Efrat K. and Shoham A. (2007). Born global firms: The differences between their short- and long-term performance. Federal Reserve Bank of St. Louis.

Gerschewski, S., Rose, E., & Lindsay, V. (2015). Understanding the drivers of international performance for born global firms: An integrated perspective. Journal of World Business, 50(3), 558.

Kia L. (2010). Advantages and Disadvantages of Competing in International Markets. Strategic Management: Evaluation and Execution.

Lydia D. (2010). International Expansion and Global Market Opportunity Assessment. Lardbucket organization

Pankaj G. and Sebastian R. (2011). National Cultural Differences and Multinational Business. IPSE Business School.

Reynaldo T. (n.d.). The Born Global Entrepreneur in Emerging Economies. Scribd Online source.Steve M. (2007). 24 Concepts every young person should know about business. Huffington Post.

Stoyan T. (2012). Global from the start: The characteristics of born-global firms in the Technology sector. Researchgate.