Xiaomi a Copy Cat of Apple?

Lei Jun - billionaire entrepreneur - in Beijing is notorious for his apple like smart phones. He is known as Steve Jobs of the east by many Chinese consumers, although the title may be a little stretched he certainly built a giant company. The design, marketing and strategy seems to be mimicking Apples marketing strategies. His company called Xiaomi manufactures and sells smart phones that closely resemble the IPhone. The phones are so popular among Chinese consumers that the first release of the phone was sold out with in a single day. The main reason why Xiaomi's smart phone is so popular is not because of its specs, it is due to the great value in price of the smart phone. A typical smart phone from Xiaomi will cost half the price of an iPhone or an galaxy. This price advantage gives Xiaomi a slight advantage in attracting large groups of consumers to purchase their smart phones. Although the company has still a long ways to go in order to compare with Apple, it is on the right track on becoming a super tech giant.

The poor enforcement of antitrust laws in China have caused a surge of knock-off brands to appear
in the Chinese market. One would be surprised to see the striking similarities between the actual brand and the knock off brand. Due to China's poor copy right laws it has become increasingly risky for new companies to enter the Chinese market simply because they risk their technology being stolen. It will be primarily up to the Chinese government to enforce copy right laws in order to protect new innovation. By enforcing such laws, will give companies the opportunity to patent a certain technological innovation and advance it.

Reflection

a. The international aspects that were discussed in this class would be the most valuable in my understanding of how the world works. I believe it is important to have knowledge on other countries because it will broaden my perspective of the world. For example, the presentations that we did for our country of choice taught me many facts that were new to me. The economic concepts covered such as arbitrage, law of one price and foreign exchange rates will be practical in my future travels abroad.

b. I am interested in learning more about the specific international economic concepts and to further develop my knowledge of the concepts we have discussed in class.

c. Any students taking this course should be ready to have an interactive discussion and be excited to learn economics (if they have no economic background). The students should be aware that this course will require them to write everyday. Most of the blog assignments are interesting because they allow you to write your opinion/research in a blog format.

City Analysis

a. Beijing is a National metropolis and is the second largest city in China. It was constructed and formed around a central axis, meaning the city was expanded around the city. The central axis was based off the capitals of previous Dynasty's. Since Beijing is the heart and center of China. It has now expanded to include the north and south axis facing mainland China.

b. Since Beijing is a national metropolis, a lot of its iconic structures such as the Olympic Stadium, Water Cube, large department stores would not be found in smaller regional cities. In addition to having key structures, Beijing offers a wide array of services to meet the demands and needs of its citizens. Some things smaller cities have that Beijing does not, is agriculture, farming and other smaller commodities.

link: http://ars.els-cdn.com/content/image/1-s2.0-S014362280600018X-gr6.jpg

Vehicle Market executive summary

    The multinational vehicle producer will continue its direction of international expansion and enter the Chinese market. With the middle class continuing to emerge and rise in income, the vehicle producer has an opportunity to profit off of China's developing economy. The vehicle producer will focus targeting the middle class and marketing its sedans. Also as the economy continues to prosper, the high income class of China is demanding more luxurious goods and transportation. Therefore there is an excellent opportunity for the vehicle producer to market its high-end limousines and establish its product early on in the market. Location will be extremely important in distributing the vehicles; the vehicle producer will target key cities such as Beijing, Shanghai and Chongqing. Trucking will be the main mode of transporting the containers from ports to the key cities. To avoid risk of fraud the vehicle producer should be cautious when hiring trucking firms.

Trade Strategy between China and India

 a.  What would the outcome be when the two most populated countries join together in a trade union? So far there are only theoretical opinions on the merger but in the years to come the world will experience first hand on the impact of these two giants. Together the two nations have agreed to launched its 12th five year plan to continue to develop its infrastructure. Beijing has continued to encourage its domestic Chinese firms to invest in India's market. India has opened its market to Chinese entrepreneurs, particularly in its pharmaceutical and telecommunications industry. The two countries are planning on forming a bilateral trade to greatly increase the economic activity of the two. When China and India compete with one another, both countries lose. However when the two join hands in a bilateral trade agreement, both countries gain significantly. The most important incentive in encouraging trade between the countries is to lower China's surplus with India.

b. The merger of the two giant markets will bring prosperity to both countries. India has a great opportunity to attract Chinese investors and further develop its infrastructure. It will be interesting to view the Law of One Price take place between the two markets. Currently trade between China and India is heavily unbalanced which is evident in the trade surplus. However as the countries open their markets up to each other, prices should meet in equilibrium. The equilibrium of prices will balance out the trade surplus and leave both countries better off in the long run.

c. Political and economic interest led to this prominent situation. Both countries seek to develop its infrastructure. The best solution is to continue encouraging domestic firms in both countries to invest in each other. Only time will move the markets of China and India forward. By establishing a bilateral trade agreement, the economies of both countries will become accessible which will decrease trade expenses on both sides.

link: http://www.chinadaily.com.cn/bizchina/2013-05/22/content_16518339.htm

The Box: how the Shipping Container

   a.   A container is simply a over sized aluminum box, its only purpose is for storage. I was astonished to learn how drastically containers changed the overall market in terms of competition. Due to the container's large storage size, different countries were able to export or import a variety of goods. For example before containers, it would have taken months for ships to deliver certain products such as oranges from Brazil to the United States. In the modern world, containers have greatly influenced competition among international and domestic firms. Domestic firms "who sought only to serve their local clientele, learned that they had no choice: like it or not, they were competing globally because the global market was coming to them. " Containers also lowered shipping costs, and as a result high-cost producers lost their advantage in physical proximity. 

b.    The author states that the importance of containers to the world is impossible to measure. There is no data to measure the drastic changes in costs that containers brought to the world. However "it seems clear that the container brought sweeping reductions in the cost of moving freight." Reductions of shipping costs have brought tremendous variety of products in our market places. Having variety is an important aspect to a countries growth because it gives consumers a greater range of products to purchase. Low Shipping costs have allowed countries to flourish and become integrated to the world.

c.  Consumers and international firms have gained from containerization. Low shipping costs have brought so much diversity for consumers to choose from. However the diversity in products have also increased competition for domestic and international firms. Due to the increase in competition local firms are faced with losses, simply because they do not have the resources to compete with an international firm. 

Marketing French Economy to China

   The increasing change in consumer demand have shifted China's economy away from infrastructure investment towards domestic consumer demand. In addition to this change in economic preference, it is expected to generate growth for other industries in the near future. France acknowledged China's fast growing market and saw an opportunity to market its economy for future investments. Therefore France is hoping to get a head start in growing sectors such as health care, agricultural products, food and beverages, and services that will aid urbanization. Currently China is one of the premier leaders in these sectors and is a significant source of future growth. Frances exports to China consist mainly of luxury goods, aircraft and nuclear energy sectors. Due to the opportunity that will come with China's economic reform and development, it has opened up new opportunities for French companies. An incentive to attract the Yuan, French officials have announced that it will make Chinese business travelers, tourists and students to visit France.

   The increase in demand for the Chinese Yuan will shift the demand in the French Market to the right. This shift will cause the Yuan to appreciate in value and therefore cause the Yuan to hold more purchasing power.

  The increase in the demand for Chinese cash was caused by France recognizing the opportunity to further develop specific sectors within its economy. China has been a prominent leader in growth and continues to have record growth rates. Perhaps a resolution to the demand of Chinese cash can be solved by France proposing a free trade agreement. This incentive will give China an opportunity to trade more freely with the European nation as it could use France as a gateway.

Link: http://www.nytimes.com/2013/05/07/business/global/officials-market-french-economy-to-china.html?ref=china