International business final exam Assignment Example | Topics and Well Written Essays - 750 words - 1

International business final exam - Assignment Example The conditions imply that cotton in Africa is cheaper than in the United States in production. In fact, Dunavant pays about half of the world prices for the African cotton. This strengthens that assertion that the low cost of production translates to lower prices. The low cost are brought about by abundance of land to grow cotton, labor, and low barriers to trade in the commodity. Also, the availability of professional advice and microfinance services from Dunavant has increased production. Trade between Dunavant and Africa is beneficial to various parties which in include the farmers, the company and textile industries across the world. Unlike the US farmers who rely of subsidies, African farmers are reliant on financial services extended by companies like Dunavant (Zachary 2007). The price benefit derived by the company extends to other firms that buy the cotton from it. This has the effect of bringing the world cotton prices down. Consequently, it raises competition among cotton producing regions. The information can be explained by porters diamond of national advantage whose interest in factor conditions, structure and rivalry in the industry, available demand, related and supporting industries Factor conditions include skilled labor and technology. Cotton in Africa is labor intensive and thus benefits from a large population. Moreover, availability of funds from companies and governments aid the industry. A local market is preferable as it triggers more production. The industry becomes more competitive thus deriving better services to farmers. Global companies acting on a national stage opens up the country for international demand that further enhances cotton farming. The cotton industry is competitive. Production in Africa closely follows the United States, placing Africa as a strategic player in the industry. The advantage is that many international suppliers have ventured into the region to provide market