BUSM2565_BUSM2566 Understanding the business environment
Semester Truong Hoang Anh
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S3911428
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(Main content without list of 1130
references, cover page, etc.)
Question 1:
The article "How Misfiring Environmentalism Risks Harming the World's Poor" outlines a
critical trade-off between short-term economic growth and long-term sustainable
development in developing nations. Economic expansion, which is frequently driven by
urbanization and increased energy use, is critical to pulling populations out of poverty and
raising living standards. However, this increase usually results in higher emissions of
greenhouse gases, aggravating climate change. The drive for green development initiatives,
while appealing in theory, confronts obstacles due to insufficient carbon pricing and funding.
This presents a quandary in which developing countries must choose between current
economic requirements and long-term environmental aspirations, with serious ramifications
for both their inhabitants and the planet.
Vietnam's economy has grown dramatically over the last three decades. Natural disasters, on
the other hand, have cost an average of one percent of GDP and killed 500 people per year
since 1990 (Van and Bao 2018).Vietnam's sustainable economic growth policies will secure
the country's long-term development. To achieve a positive relationship between carbon
dioxide emissions and economic development, Vietnam has implemented regulatory changes
to prevent environmental degradation while sustaining economic advancement (Tang and Tan
2015). To begin, the implementation of methods for energy efficiency in various sectors can
result in significant reductions in energy consumption relative to output, effectively reducing
greenhouse gases while preserving economic growth (Raihan et al. 2024). Vietnam adopted
the 2016 Paris Climate Agreement, committing to lowering greenhouse gas emissions by at
least 7% by 2030 and meeting the United Nations Sustainable Development Goals (SDGs) by
2030 (Raihan et al. 2024). Second, Vietnam has prioritised growing agricultural value added
to enhance environmental quality. Vietnam policymakers push new agricultural in nature
technologies, such as disease-resistant and high-yield cropping patterns, and induce farmers
to abandon traditional agricultural practices in favor of more modern ones (Raihan et al.
2024).
Figure 1. CO2 emissions and Economic growth in the period from 1990 to 2020 in Vietnam
(Source: World Development Indicator (WDI))
Question 2.
Absolute advantage
The ability of businesses and countries to create commodities effectively is the foundation for
absolute advantage (Torelli 2013).
Japan has an unparalleled advantage in the production of personal care and hygiene items,
sometimes known as toiletries. Toiletries are frequently linked with beauty care or cosmetics
for one's hygiene and cleaning, further blurring the distinction between personal care, beauty
goods, and over-the-counter medications. Unicharm is currently a Japanese international
leader in personal care and hygiene goods ranging from infant diapers to geriatric care
(Takahisa 2012). Japanese tenacity has given the country an advantage in developing
creative, high-quality, ventilated, and lightweight materials. Japan's inventiveness and work
ethic are becoming more visible as cutting-edge software and internet technology emerge
(Bernardin 2020). Furthermore, Japan's large population in a small area allows for greater
efficiency in the use of social infrastructure, such as intercity highways, railways, urban
subway transit, air and sea ports, and so on, contributing to its absolute advantage in
manufacturing and exporting personal care products (Bernardin 2020).
Indonesia is the world's second-largest rubber producer, with the majority of its rubber tree
growing regions being on Sumatra and Java Island (Siahaan 2024). In 2023, the GDP of
rubber producers, rubber-based goods, and plastic products in Indonesia was around 85
trillion Indonesian rupiah (Siahaan 2024). According to Indonesia Investments (2024),
Indonesia has the potential to increase its natural rubber output in the future, owing to the
availability of sufficiently big tropical territory appropriate for rubber tree cultivation (Victor
2023). In addition, Indonesia has comparative advantages in rubber production due to low
labor wages, rich natural resources, and low procurement costs (Victor 2023).
Comparative advantage
Japan enjoys a comparative edge in the car industry. Japan has a long history of
manufacturing high-quality, dependable, and technologically advanced automobiles. Toyota,
Honda, and Nissan are well-known global brands with a considerable market share
(Shimokawa 2010). Japanese software and internet development organizations devote
meticulous attention to the most minute elements in apps, algorithms, and interfaces,
resulting in quality and innovation in function and design. Japan's culture and heritage of
quality and competence in manufacturing give Japanese enterprises a major and long-term
competitive edge, making select Japanese brands an appealing investment (Shimokawa
2010).
Indonesia is the world's biggest producer and exporter of palm oil. Its tropical climate and
wide land area are suitable for growing oil palms. It has a thriving palm oil sector with
modern manufacturing and processing facilities (Zuhdi et al. 2021).
Japan and Indonesia have distinct economic systems and resource endowments, which
contribute to their comparative advantages. Indonesia may manufacture palm oil and
automobiles at a lesser cost than Japan due to low labor expenses, but Indonesia has a higher
advantage when it comes to producing palm oil due to its natural qualities (Zuhdi et al.,
2021). In this situation, Japan has a comparative advantage in automobile manufacturing, but
Indonesia has a comparative advantage in palm oil production. Japan's advantage resides in
its technological competence and skilled workforce, whereas Indonesia's advantage is found
in its wealth of resources and labor-intensive sectors. These disparities open up chances for
cooperation and trade between the two countries.
Figure 2. Indonesia's top five export products to Japan from 2000 to 2015 (Fitrianti 2017)
Question 3.
Viet Tien's "Future Men" collection, which debuted at the Vietnam International Fashion
Week Spring/Summer 2019, resulted in a surge in demand, causing equilibrium prices and
quantities to climb in Viettien's items. The collection's popularity resulted in higher sales and
helped to solidify Viet Tien's market position. It was a dramatic departure in the brand's
aesthetic and cemented its status as a men's fashion leader in Vietnam (Nga 2023). The
"Future Men" collection increases demand for Viettien's items, causing the demand curve to
shift to the right, as seen in Figure 3.1 "Increase in demand". As the supply curve remains
unchanged, the equilibrium price rises from P1 to P2. As the price approaches the new
equilibrium level, the quantity supplied climbs from Q1 to Q2. This is demonstrated by
Viettien's increased revenue following the launch of the collection (Viettien n.d.).
Figure 3.1. Increase in demand
The complicated events of the Russia-Ukraine conflict in the first half of 2022 prompted
prices of raw materials, fuel, and additional supplies to rise steadily, with cotton prices
increasing by 19%, crude oil prices increasing by 40%, and domestic gasoline prices
increasing by 68% (Yen 2022). The increased production costs have resulted in a decline in
the supply of Viettien garments. Figure 3.2 "Changes in Supply" illustrates how a drop in
supply pushes the supply curve to the left. The equilibrium price moves up from P1 to P2. As
prices rise to the new equilibrium level, the amount requested falls from Q1 to Q2. This is
demonstrated by the fall in revenue of domestic apparel brands, according to Yen (2022).
Figure 3.2 Decrease in Supply
References
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