Strategies for Analytical Judgment: Transcending the Limits of Incomplete Information When intelligence analysts make thoughtful analytical judgments, how do they do it? In seeking answers to this question, this chapter discusses the strengths and limitations of situational logic, theory, comparison, and simple immersion in the data as strategies for the generation and evaluation of hypotheses.
So South Africa should concentrate on the production of oranges as its comparative advantage is greatest here.
Unfortunately the theory assumes that production costs remain relatively static. However, it is a well known fact that increased volumes result, usually, in lower costs.
Indeed, the Boston Consulting Group observed this phenomenon, in the so called "experience curve" effect concept. And it is not only "production" related but "all experience" related; including marketing.
The Boston Consulting group observed that as an organisation gains experience in production and marketing the greater the reduction in costs. The theory of comparative advantage also ignores product and programme differentiation.
Consumers do not buy products based only on the lowest costs of production. Image, quality, reliability of delivery and other tangible and non tangible factors come into play. Kenyans may well be prepared to pay extra for imported French or South African wines, as the locally produced paw paw wine may be much inferior.
The product trade cycle: The model describes the relationship between the product life cycle, trade and investment see figure 1. At the same time other countries, particularly less developed but not exclusively so, shift from being importers to exporters.
These stages are reflected in figure 1. The assumption behind this cycle is that new products are firstly launched in high income markets because a there is most potential and b the product can be tested best domestically near its source of production.
Thus new products generally emanate from high income countries and, over time, orders begin to be solicited from lower income countries and so a thriving export market develops.
High income country entrepreneurs quickly realise that the markets to which they are selling often have lower production costs and so production is initiated abroad for the new products, so starts the second stage.
In the second stage of the cycle, foreign and high income country production begins to supply the same export market. As foreign producers begin to expand and gain more experience, their competition displaces the high income export production source.
At this point high income countries often decide to invest in foreign countries to protect their share.
As foreign producers expand, their growing economies of scale make them a competitive source for third country markets where they compete with high income exporters. The final phase of the cycle occurs when the foreign producer achieves such a scale and experience that it starts exporting to the original high income producer at a production cost lower than its original high income producer at a production cost lower than its original high income supplier.
High income producers, once enjoying a monopoly in their own market, now face competition at home. The cycle continues as the production capability in the product extends from other advanced countries to less developed countries at home, then in international trade, and finally, in other advanced countries home markets.
Non more than the textiles industry, specially cotton. In the early and mid twentieth century the UK was a major producer of cotton textile materials, primarily based on its access to cheap raw materials from its Commonwealth countries and its relatively cheap labour.
However, its former colonies like India, Pakistan and certain African countries, which were sources of cotton in themselves realised that they had the labour and materials on their doorstep conducive to domestic production.
They began to do so. Such was their success in supplying their own huge markets that their production costs dropped dramatically with growing economies of scale.
Soon they were able to support cloth and finished good back to the UK, which by now had experienced growing production costs due to rising labour costs and failing market share. Now the UK has little cotton materials production and it served by many countries over the world, including its former colonies and Commonwealth countries.
Whilst the underlying assumption behind the International Product Trade Cycle is that the cycle begins with the export of new product ideas from high income countries to low income importers, then low income countries begin production of the product etc.
In this case, the Trade Cycle ceases to be the underpinning concept. This may be due to a number of factors like lack of access to capital to build the facilities to respond to the import, lack of skills or that the costs of local production cannot get down to the level of costs of the imported product.
In this case, product substitution between the exporter and importer may also take place. A classic example of this phenomenon is the case of Zimbabwe Sunsplash fruit juice drinks.
When Zimbabwe embarked on its World Bank sponsored structural adjustment programme inZimbabwe steadily moved from a command to a market economy, part of which allowed foreign importers. In a short space of time, market share for Sunsplash fell from 1 million litres annually to a mere litres.
On this reduced volume, coupled with higher transport costs, the company simply could not compete and closed its doors in January However reduction in income and transport costs were not the only problems. Expenses like high interest rates were an inhibiting factor.
The company needed to make the transition to aseptic packaging which would alleviate the need for chemical preservations and enhance unrefrigerated shelf life. The new packaging would have greatly enhanced the product and generated export potential.
Perlmutter1 identified distinctive "orientations" of management of international organisations. His "EPRG" scheme identified four types of attitudes or orientations associated with successive stages in the evolution of international operations.The evolution of global marketing has been in a series of four stages from exporting to truly global operations.
These stages have been termed "domestic" in . These PAEs alone have sued Apple more than 12 times using former Nokia patents. Being targeted by PAEs is nothing new for Apple — but in an anti-trust complaint dated December 20, , Apple.
This case study analyses the ever-evolving marketing strategies adopted by Nike to become a global brand. Founded in January as Blue Ribbon Sports (BRS) by University of Oregon track athlete Philip Knight and his coach Bill Bowerman, the company was initially a distributor for the Japanese shoemaker Onitsuka Co and their brand Tiger.
The first lesson is this: have a conscious strategy, rather than a knee-jerk response. Think about where you want to go and what your goals are.
And if your aim is to simply make the other person feel bad or look bad, then maybe reconsider if that’s helpful to either of you. Nokia, because of its global focus, has done a far better job of taking its services outside the core Western European and Nor th American markets than its competitors.
This by product of Nokia 's scale means that it has significant infrastructural assets in key services areas. Jun 26, · The State of Strategic Intelligence. The Intelligence Community's Neglect of Strategic Intelligence in which analysts are often rewarded for the number of pieces they produce, rather than the substantive depth or quality of their Strategic intelligence must also support today's grand strategy of global democratization and its.