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← International TradeWhat Makes Demand more Elastic? →

Check Out Our Impact on International Trade Essay

Section 1: Impact History

Stakeholder theory argues that companies make a profit for their shareholders but also create many other benefits for society such as professional development for their employees and innovative new products for their customers. Customer sector is a stakeholder market because customers engage with the company in economic transactions. Customers are the most crucial business segment because it is through them that companies make profits. All trade, including the imports and exports involves affiliations of suppliers and customers. Advanced technology, ease of transportation, outsourcing and industrialization have had significant contributions in the advancement of international trade.     

International trade, export and import business, in particular, have an enormous impact on customers. Through international trade, customers have a greater variety of goods and services to choose from. International trade brings on board different varieties of a certain product from different countries. This offers customers a wide variety of choices that will enable them improve their lives and the country at large (Jain, 2010, page 119). Changes in social status, where people want an association with foreign products has further advanced exports and imports of goods and services, for instance cars, jewels and electronics.

It is a common fact that goods manufactured locally, especially in the developing countries, are expensive as compared to the goods imported from developed countries. Exports and imports allow customers to access products at remarkably low prices unlike when they are purchasing goods from domestic companies. This is because; multinational companies produce in bulk, making them enjoy the benefits of economies of scale. With the advanced transportation channels, moving goods from country of production to other countries has become cheap. Consequently, these products are low priced to the advantage of the customers.

Exports and imports have a direct impact on economic development of a country and by extension the customers. With increased imports and exports, companies need staff to distribute these goods and services. The local customers get employed in such businesses and earn money, which is a source of their livelihood (Jain, 2010, page 120). Multinational companies pay more than local industries, and, thus, people working with the export and import businesses tend to earn more than the rest of the citizens.

Import and export businesses lead to efficient utilization and allocation of production resources since companies and countries get inclined to goods and services, which they tend to have as a comparative advantage. When companies produce is based on comparative advantage, wasteful duplication of resources is minimized. This helps in saving the environment from harmful gases, making the environment safer for the customers. Over the years, companied have adopted the ISO standards that ensure safe production of goods for the benefit of customers. Moreover, these companies are adopting strategies aimed at minimizing global emissions.

Export and import businesses enhance competition among the domestic industries. When a government allows free trade within its borders, there is high influx of quality products and services from other countries. Consequently, domestic industries make investments to produce quality goods and services that will either surpass the quality of the imports or at least be at level with the imported ones. The consequence of this is that the consumer enjoys the benefits of having quality products at their disposal. This includes quality health services available for customers.

International trade increases the production of goods and services, which enables them to specialize in production of cheap goods and services. This increases production as the company focuses all its energies and efforts in the production. This increases the market share of the products and reduces the average costs of production. Then the country imports products that cost them more resources to produce. Consequently, the customers are able to access the goods that can be produced primarily, and at the same time have access to goods that are not produced locally.

Section 2: Impact analysis

Exports and imports companies make too many actions because of which  customers often experience some inconveneinces. First, some of these companies offer monetary effectives to governments so that they can export goods and services to the countries of this government. Some of these products are harmful and not safe for human consumption. In some extreme cases, the mentioned governments do not have means of disposing the products leading to the pollution of the environment (Jain, Khanna, and Sen, 2010, page 175). For instance, Africa has been a place where electronic waste is dumped from developed nations. African countries do not have means to dispose the waste making it a health hazard to the consumers. Harmful drugs like cocaine and heroin have also found their way into the markets through export and import of goods and services. This is harmful to customers as well.

Export and import industries hurt some local industries, killing their potential for growth and driving people out of employment. Most of the exports come from already developed companies, they enjoy the benefits of economies of scale, and, thus, their prices are lower than the prices for domestic products. Customers will certainly go for low priced products, leaving the products for the domestic industries without market. As the consequence, domestic companies run out of business, lay off workers and cut employment levels. Loss of employment means reduced standards of living and the customers of the importing countries suffer in the end.

Moreover, some established companies are able to purchase natural resources at lower prices than the prices being offered locally, manufacture them and then sell them to the original countries at exorbitant prices. A perfect example is the production of leather from Kenya. Kenya is one of the major producers of leather, but the local market does not offer good returns. Producers export the leather to other countries at cheap prices, which manufacture shoes and other leather items (Jain, Khanna, and Sen, 2010, page 174). The items are then imported to Kenya at extremely high prices. This is extremely disadvantageous for the customers, who would buy them cheaply if the country had the ability to convert the raw leather into finished products.

Export and import industries lead to overexploitation of resources, which results in their subsequent depletion. When countries focus on products they have as a comparative advantage, they exploit the resources, leaving the customers with scarce resources to produce goods locally. For instance, countries that majorly depend on non-renewable natural resources risk depleting them as they focus on bulk production. When this happens, customers start depending on other countries economically, leading to poverty. In addition, dependence of specific products places a country and customers in a risky situation should the demand for the goods and services in other countries change (Jain, Khanna, and Sen, 2010, page 174).

According to Jain, Khanna, and Sen, (2010, page 176) dependence on imports on local industries continues to kill creativity among the young people. This is because there are no industries where these young people can exercise their creativity and innovativeness at. The sound people with good skills seek employment in other countries leading to brainwash. These countries are, therefore, left without the new skills necessary to offset economic development.  The governments also become reluctant to fund industries since they know they can access the goods through importations. The consequence of this is that certain countries remain undeveloped since no new industries are being opened and the existing ones face stiff competition from the developed multinationals.

Section 3: Company Spotlight

General Motors is a company that exports cars all around the world. It has been recognized for its efforts in making the customers’ lives better through a number of programs. First, the company has made significant investments in innovation in an attempt to reduce harmful impact on the environment. The company received the Energy Stars Partners of the year Award, for its efforts in energy efficiency. The company has developed cars like the 100 landfill-free facilities and Chevrolet Volt, which ensure fuel efficiency. This is beneficial to the customers since the more efficient the car is, the cheaper the costs of maintaining it will be (the environmental leader, 2011).

The company invests in a number of educational institutions and programs, aimed at nurturing the future’s leaders and innovators. These programs helps young students acquire skills needed to succeed in life. The company created a fund worth $27.1million to the United Ways of Michigan for several schools, among them, Central High School, East Detroit High School, and Harper Woods High School. Gm Motors has also collaborated with the health sector to assist in providing health care, wellness and disaster relief to their customers. The company is a key contributor to the American Red Cross, Safe Kids USA and the American Heart Association.

The company has received extensive media attention for its efforts in reusing and recycling materials to reduce the amount of waste resources released to the atmosphere. The reuse and recycle of the waste products led to the reduction of total waste by 43% in 2010 from 2000, making the environment safer for all customer segment of the business environment (the environmental leader, 2011). In addition, the company embarked on resource conservation and the conversion of the natural habitats. The company reduced water consumption for all its facilities by 32% between 2005 and 2010.

The company is also committed to embrace biodiversity, by dedicating more than one thousand acres of its global sites for wildlife habitats. The company established a Wildlife Habitat council, which helps the company natural habitat management and deals with environmental education at a corporate site.  This helps customer enjoy the natural environment through nature trails, bird viewing and butterfly gardens. 

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