Effects of National Culture on the Marketing Strategies - Dissertation Example

The paper tells that international business theory begins with trade. Daniels and Radebaugh identified and compared ten types of trading theories. The theories are mercantilism, neomercantilism, absolute advantage, country size, comparative advantage, factor-proportions, product lifecycle, country similarity, dependence, and strategic trade policy. In the factors-proportions theory, there are four defined factors related to each home country. The factors are land, labor, capital, and entrepreneurship.

The land is the natural resources associated with the physical boundaries of the country that are used to produce things. Countries without a strong and sufficient land base are forced to engage in international trade in order to obtain needed resources. Labor is the availability of unskilled and semiskilled workers within the country that can be mobilized for production purposes. Capital is the money, machinery, and infrastructure a country possesses. Countries abundant in these areas are considered more developed countries.

Entrepreneurship is the creative management and ideas people use to solve problems and find new opportunities. The four factors explain the inherent resources a country possesses that make it attractive for trade, and therefore, international business. The theory is that "differences in a country's proportionate holdings of factors of production explain differences in the costs of the factors and that export advantages lie in the production of goods that use the most abundant factors."