The Story of Foreign Trade and Exchange

The Story of Foreign Trade and Exchange

After reading “The Story of Foreign Trade and Exchange” I began to think about my company that is a manufacturing in pats, engine, and power generations. Our company began manufacturing since 1919, and started to grow its business in the United States. The Company also began looking beyond its traditional borders. Cummins opened its first foreign manufacturing facility in Shotts, Scotland, in 1956 and by the end of the 1960s, Cummins had expanded its sales and service network to 2,500 dealers in 98 countries. Today, Cummins has more than 5,000 facilities in 197 countries and territories. According to the questionsWhat does it have an absolute advantage in, and what is its comparative advantage? Which is more important? In this case I will be only focusing on parts production, and examining it based on these two subjects. In my opinion, The Company has an absolute advantage in parts because it doesn’t take them long to produce parts in different varieties, and expedite the time frame of shipping to customers. The company has more than 3 factories in the USA and 16 distributions. Therefore, the company can easily make parts available to its customers with lower costs, and support its product inside and outside the USA. I also need to mention that the company has many factories in different countries like China, Brazil, and England along with its distributions. The second question regards to comparative advantage, The Company has its comparative advantage. Our company based on its products availability and locations could compete with other competitors like Caterpillar, Doosan, and others. The reason would be that the company has provided all materials for its factories all over world, and they’re capable of do mass production based on the needs of customers. On the other hand, Cummins’s competitors like Doosan which is a Japanese company is limited to manufacture parts in The USA or other countries. Doosan has only a...