Increasing competitiveness through free trade agreements: A case study of the electronics manufacturing company
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Abstract
The objectives of the research were to: 1) analyze the business environment and the competitive strategy of an electronics manufacturing firm, and 2) develop guidelines to increase competitiveness by reducing import duty costs. The case study was an electronic product manufacturer that started a new factory, which was the production of coffee machines for export to world markets. And the main raw materials must be imported from abroad. This research is a qualitative research using the content analysis method of brainstorming to analyze strengths, weaknesses, opportunities, and obstacles using SWOT Analysis, leading to the formulation of competitive strategies. And this research study the information on imports of raw materials under WTO privileges and benefits under free trade agreements (FTAs) for reducing the cost of import duties.
The results revealed that the cost of import tariffs had a negative impact on competitiveness when analyzing the business environment with SWOT Analysis. Therefore, the firm applied the WO Strategy by defining competitive strategies, both differentiation-focused approach, which was the firm's competitive situation, and expected-focusing strategies, which was a weakness. If the firm uses the FTA privileges to import raw materials, it will receive a reduction or exemption from import duties. As a result, the firm can transform from an instability point to a strength position. Thus, the import of raw materials through FTA privileges would increase international trade competitiveness of the company.
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