Foreign Trade and Exchange - International Business - Essay Example

Foreign Trade and Exchange - International Business Foreign trade is primarily characterized byexports and imports between trading nations. The practice of countries engaging in trade has been in place since time immemorial. Mercantilism set the pace for state relations and international business, creating interdependence between nations in a bid to exploit each country’s advantage in trade and business (Justin 339). Business and trade practices have evolved and revolutionized over the years.

Today, diversity and dynamism have encompassed trade and exchange in local and foreign contexts. There are many players in the foreign trade and exchange environment, an example being individual companies Apple, Inc.The international foreign trade and exchange has developed to constitute free trade policies, guided by reduction of tariffs and quotas in trade and exchange transactions (Justin 425). In other words, the contribution and evolution of the concepts of Mercantilism, Adam Smith, and Ricardo among others have shaped international business today.

Apple, Inc. is primary competitive firm globally. It enjoys an absolute advantage in creating product quality and pricing policies that capture the interests of the market in both domestic and global contexts. This follows the idea that Apple manufactures its products at a competitive low production cost relative to rival firms in the industry. Apple’s comparative advantage emanates from its collaboration with other firms like Google in offering its products and services. In other words, Apple understands that it cannot be self-sufficient in business, thus collaborating with other firms in business terms.

Comparative advantage in this regard is more important due to the complementarity it provides, through trade and exchange as opposed to being at an advantage that is based on operational costs off trade and exchange in the market (Justin 461).Works CitedJustin, Paul. International Business. New York: PHI Learning Pvt. Ltd., 2011.