Comparative Advantage

Question # 00171538R/C Aero Specialties produces unmanned aerial vehicles (UAVs), or drones, for commercial and recreational uses. The company has updated its design to compete with Fuji Enterprises, but its production costs for this new model require a retail price that is well above the retail price for the Fuji model. If R/C Aero is to remain competitive with Fuji, the company must develop and implement strategies to gain a comparative advantage. Submit by Day 7 a 300- to 700-word paper that addresses the following scenario: Assume that you have been hired as a consultant to identify and refine a strategy for R/C Aero Specialties. Identify, describe, and justify at least one strategy that R/C Aero can implement to gain a comparative advantage over Fuji. Explain why you believe this strategy will give R/C Aero a comparative advantage, thus enabling the company to regain and maintain market share. Assignments must bein APA style and format. Information on APA style is available at theWalden Writing Center.

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Comparative advantage

Comparative advantage is a concept that insists on people doing what they are better at and selling it to others while buying from others what they are not better at producing. This has always been the basis of trade. The world has become better with trade for if an individual was to produce everything that he consumes, then this world would be a really miserable place to be. Comparative advantage implies that if United States can produce warships which is more capital intensive production at a lower cost than producing compared to producing television sets, then united states should devote all its efforts to producing warships and import television sets. By doing so United States will have made itself well of and the country from which she import television sets from. Considering the highlighted case of United States engineering sector and Bangladesh textile industry, United states engineers are better off manufacturing planes while Bangladesh is better off in textile, thus, each country should specialize in what they can make most out of their time and trade. Out of trade both United States and Bangladesh will be better off. This is the epitome of specialization. These days economies have specialized in what they do best; the developed economies producing capital goods while developing economies producing primary products (Wheelan 2002).

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