International Production and Multinational Enterprise

Question: Discuss about the International Production and Multinational Enterprise. Answer: Introduction: Strategy has been misconstrued as a vision or mission statement, goals, strategic threats by many organizations. Strategy is generally assumed in the common activities of an organization and hence a requirement of comprehensive understanding of strategy in business management. The formation of a strategy is necessary for development of promising opportunities for the organization. Strategy of an organization provides a clear depiction of the markets in which the organization operates, unique value proposition provided by the company, resources and capabilities as well as factors for sustaining its value proposition (Beamish, 2013). Therefore sustenance in global markets has led to exposure towards several prolific strategies such as the AAA framework. The use of the AAA framework is largely concerned with the development of a promising value proposition in a global market and sustaining it. Strategic direction towards global value creation according to the AAA framework relies on the elements of adaptation, aggregation and arbitrage. The three different approaches could be considered as integral aspects of strategies for global value creation. A mere global strategy would not be sufficient to address the requirements in the domain of business (Buckley, Burton Mirza, 2016). The adaptation approach comprises of distinct methods to create value in a global market. Aggregation approach comprises of capitalizing on the economies of scale and scope which is executed commonly using the CAGE framework which relies on cultural, administrative and economic aggregation for facilitating value creation. The approach of aggregation is characterized by limited impact on local responsiveness and could be prepared according to geographic and non-geographic contexts. Arbitrage approach relies on the differences between regions and utilizes the concept of purchasing at lower prices in a specific market and selling at higher prices in another market. The CAGE framework also appli es to Arbitrage approach and hence leveraging cultural, geographic, economic and administrative capabilities for obtaining value in foreign markets (Casson, 2013). Application of Ideas The study of AAA framework could be applied to the case of McDonalds which assumed the adaptation approach to enter the Indian market. The sustenance of the companys value proposition in the sub-continent was primarily driven by its association with local entrepreneurs and introduction of variety in its products according to the preferences of the local customers. Furthermore, it was observed that the company assumed design adaptation and therefore McDonalds was able to reduce the complexity of supply chain management. The company was utilizing the local supply chain for manufacturing products and hence major reduction in the costs of transporting raw materials to the subcontinent was observed. The example of Tesla Motors can be considered for application of the adaptation approach for global value creation (Dunning, 2012). The companys initiatives to build hybrid electric cars should be complemented with focus on specific markets and customer segments. The focus of the organization on specific customer segments which would be willing to purchase the products of Tesla Motors. The application of focus approach of adaptation for Tesla Motors should be directed towards countries which favor environment friendly initiatives such as the hybrid electric cars provided by the company (Driffield, Jones Crotty, 2013). Business Mode Innovation Business model of an enterprise serves as the most promising resource for the company to realize development and growth. The business model could be considered as an outline of the approach followed by an organization and generally refers to four distinct components such as value proposition, value chain infrastructure, and global management model and market participation. It has also been observed that companies should undergo innovation in business model fabrication (Driffield, Jones Crotty, 2013). The apprehension of the roles of values disciplines and the marker leadership in the implementation of a business model for global strategy is imperative. The introduction of plausible inferences such as supply chain management from value chain infrastructure, global management from the model, is scope for global branding due to market participation and value proposition in the form of innovation. Value proposition of a business accounts for the primary aspect of a business model. The v alue proposition can be defined as the companys offer to the customers and package of products and services alongside a complete range of intangible and tangible benefits provided by a company to its customers. Market participation aspect of business model is determined by the organizations preferences for specific markets and customer segments, promotion and advertisement of value proposition as well as distribution methods (Forsgren Johanson, 2014). Market participation is a considerable influence on the identification of specific customers, scope for brand association and interaction between business and customers. The value chain infrastructure depicted in the business model of an organization refers to the association of the company with affiliate and partner networks as well as relevant resources and capabilities required to address the target markets and support the value proposition of the products (Wild, Wild Han, 2014). The value chain infrastructure is also concerned wi th the organization of the supporting networks and resources and capabilities of the organization to create a prolific opportunity for value creation in the target market (Jenkins, 2013) s. Global management model refers to the approach followed by an organization in its global operations and the primary classifications of global management model could be verified in the global product divisions and geographical structuring of the organization. The value discipline followed by a business organization is dependent on the value discipline and value creation strategy. The commonly adopted value disciplines by organizations in their business models refer to operational excellence, customer intimacy and product leadership (Verbeke, 2013). Application of Ideas The example of Intel can be viable observed as an implementation of effective business model for global value creation. Intel has sustained its value proposition for customers in the form of cost-effective computing chips and microprocessors and it defines the integration of product leadership value discipline in the business model. Intel has always set benchmarks in the industry of computing with the introduction of products superlative in processing performance than the earlier processor designs (Sinkovics et al., 2014). The major emphasis on creativity, speed and origin of innovative solutions is the key characteristic of product leadership which reflects on the value proposition of Intel. The case of British Airways can be considered for the realization of a business model for global value creation (Kelley Shenkar, 2013). The company could assume the value discipline of operational excellence through improving efficiency and cost in it value propositions. The existing value chai n infrastructure for British Airways would provide viable opportunities to realize additional concerns of safety of passengers and crew members as well as moderating business processes such as advertising, bookings and verification procedures. These improvisations in the business model of the organization could facilitate appropriate opportunities to sustain the competitive global market (Sinkovics et al., 2014). References Beamish, P., 2013.Multinational Joint Ventures in Developing Countries (RLE International Business). Routledge. Buckley, P.J., Burton, F. and Mirza, H. eds., 2016.The strategy and organization of international business. Springer. 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