Free Essay On Comparative Advantage

Every firm’s goal is ensure that there is profit maximization. In order to achieve this goal, companies have to formulate strategies that will ensure that they gain a comparative advantage over other players in the market. Apple Inc.’s choice to capitalize on factory endowments in China was majorly based on technical skills available in the Chinese economy. The move by apple Inc. has helped the company gain a comparative advantage over its competitors by ensuring that its products are of high quality and manufactured in bulk.
The Chinese labor force apart from being cheap, the workers are determined and can persevere to ensure that they do their job well. This type of zeal to work cannot be found in the American labor force. Additionally, the technical skills possessed by the Chinese are high enough to ensure that products are produced efficiently without any glitches.
The decision by Apple Inc. to move its manufacturing plant to China can presently be compared in some aspects to the decision taken by Gap Inc. to move its Myanmar. The Myanmar labor forces experience some of the atrocious conditions as they toil to earn a living. The workers in Myanmar face low wages, unsafe working facilities, and lack of labor unions among many other difficulties. Gap Inc. move could be aimed at not only the attractive labor markets, but also the ability to get skilled workers who are able to work for long hours in a safer environment. The Myanmar workers when provided with proper working environment, they can attain high productivity levels compared to the American semi-skilled and skilled workers. Such workers will provide Gap Inc. with a comparative advantage over other companies in the same industry. Gap’s move on Myanmar economy is thus similar to the move made by Apple Inc.