International Business Strategy for Events and Sustainability

Question: Discuss about theInternational Business Strategy for Events and Sustainability. Answer: The purpose of this section is to provide a summary of chapter 7 from international business strategy by Alain Verbeke. In chapter 7 of this book, the main concept described by the author relates to Ferdows- Foreign factory as a competitive weapon. The author applied this concept to demonstrate how different countries integrated the MNEs in business operations (Ryan Deci, 2017). The author asserted that the factories used in MNE needed to be cost-effective, productive, and innovative and should provide customer services to all clients. Through this approach, many factories were created and developed based on different environments. Again, there was a need to change the business environment so as to accommodate the rising number of factories in different countries. There were three main changes in the business environment that needed to be incorporated. The first change related to international trade tariffs (Thomas, 2009). These tariffs declined thereby decreasing the need for international and foreign subsidiaries to mitigate barriers. International trade tariffs acted as trade barrier limiting smooth international trade. This change in business environment inhibited international business operations because foreigner could not overcome trade barriers set by their trading partners. The second change in business environment was the use of modern manufacturing tools (Fletcher, 2012). These tools were capital-intensive thereby requiring a complex supply chain. Modern manufacturing was fully engaged in production (Reece Walker, 2007). These tools emphasized in productivity level instead of low wages. The last cha nge was relating to the time frame between development and manufacturing. The main reason for this change in business environment was attributed to marketing. The process of marketing had become shorter due to plants specialization. Moreover, there was the development of six roles for foreign manufacturing. The author asserted that foreign manufacturing facilities were based on two parameters. The first parameter was strategic purpose of the plant. The second parameter was the strengths of the plant FSAs (Marshall, 2013). Again, there were different factories involved in the foreign business. First, the offshore factory was used to access low-cost production factors. This was the primary purpose of the offshore factory. The management team applied this factory to monitor the process of manufacturing before exports were made. The factory could not develop new FSAs. The second factory was server factory. This factory was applied to manufacture goods as well as to supply goods to different markets in regional and global markets (Hong Wang, 2008). Third, outpost factory was initiated so as to collect all relevant data from the host country. This factor integrated the performance of offshore and server factories so as to meet the actual manufacturing supply side (Krugman et al, 2012). The next factory was source factory. This factory was applied to access low-cost production factors from the input side. This factory was allocated adequate resources so as to deliver the best practice for the plant. The contributory factory was applied by the host and regional output markets to serve a similar purpose as server factory. Lastly, the lead factory was the most viable factor to integrate resources that were used to develop new FSAs. It was also important in manufacturing innovation and to develop input from local clusters. In addition to the above, there was a need to upgrade some factories so as to facilitate them to achieve their primary objectives. Some of the companies to be improved include offshore and server. Three phases were applied to initiate resource recombination from the outpost, server and offshore. The initial phase was to enhance internal performance. The second phase involved accessing and developing external resources. The last stage involved the development of new strategies that focused on improving the entire plant. However, in the process of upgrading server, outpost and offshore in the three stages, several obstacles were faced. First, there was fear of relying on foreign subsidiaries. Again, long-term investments were ignored by treating foreign factories badly (Kotler et al, 2010). Another obstacle was as a result of instability that was created through changing production process and reactions to exchange rates. Lastly, governments ordered MNEs locate in unattractive location . Lastly, the concept of Ferdows is criticized in chapter 7. The first critique was on upgrading all factories. The process of upgrading all factories was based on impossibility. Again, it underestimated the effects of low costs from host countries. Again, the offshore factory was not a good choice because FSAs had no capability to make offshore activities flexible. Chapter Upgrade In this section, journal papers will be applied to upgrade concepts and theories used in chapter 7 from international business strategy by Alain Verbeke. The first article that can be applied to upgrade chapter 7 is an article by Carl Fey, Amar Nayak, and Changqi, 2011. That is, New Kids on the Block: Multinationals from Transforming Economies. According to authors, people were worried about Russian, Chinese and Indian companies emerging as key players in global and international business relations. At present, most of the companies from these countries have emerged as significant players in the global markets through an active transformation in the economy. As long as we take internationalization with great weight, then there is a higher likelihood of achieving global business relations. Another journal to be applied is the Journal of Teaching in International Business, 2009. That is, Challenges and Opportunities of Business Education in Southeast Europe: The Case of a Balkan Business School. This was written by William R Prendergast, 2009. The author used this literature to determine the inconsistency of goals and mission of a school. The concept of pricing is applied to demonstrate how markets work. Again, the concept of introducing a new product in the market as well as the challenges of market estimation are among the concepts in this literature (William, 2009). If we integrate with chapter 7 from international business strategy by Alain Verbeke, then foreign and host countries would have applied the concepts to enhance business sustainability in all factories. The next literature to be applied in the chapter upgrade was written by Hanane Beddi and Ulrike Mayrhofer, 2010. That is, The role of location in headquarters-subsidiaries relationships: An analysis of French multinationals in emerging markets. The author applied the perspective of the role of location in establishing the relationship between headquarter and subsidiaries (Hanane Mayrhofer, 2010). In this case, the analysis used was to focus on business challenges that were exposed to MNEs from nature economies. This considered the growth of subsidiaries that were located in the countries. In the study, the relationship between subsidiaries and headquarters was enhanced by the location of subsidiaries in the economic system, geographic, cultural aspects along with the distance between foreign subsidiaries and headquarters(Verbeke, 2013). Case Analysis Some of BMWs FSAs can be traced back to the 1980s when the company started making massive strides to become a dominant player in automotive markets. The company managed to make new innovations and designs in the industry thereby becoming very competitive in the market (Holmes et al, 2015). Again, BMW managed to make powerful brand equity. The production capacity increased after acquiring Rover. BMW was able to diffuse FSAs to Rover after the acquisition. BMW was able to purchase Rover thereby achieving several advantages such as manufacturing of economies of scale. This added branding power to BMW that was associated with Rovers brand name. The process of acquiring Rover provided BMW with substantial location bound non-locational bound. There was mass production by BMW after the acquisition of Rover. There was additional branding power to BMW thereby increasing production and design by BMW. Again, it managed to gain significant location advantages as a result of the acquisition (Hausman, 2007). The production scale of BMW increased from 400,000 units to 800,000 units after the acquisition. Ferdows framework can be sued to design strategies for BMW to recover Rover manufacturing activities in the UK. The strategic role was to acquire the entire market system of Rover in the UK by BMW. In the initial stages of acquisition, BMW worked and invested heavily in innovation, design, and development so as to transfer full accusation from the UK where Rover originated (Daft, 2015). The Ferdows framework demonstrates how this process enabled BMW to make sales on Rover brand name as well as capitalize on Rovers brands iconic status in the UK. In this case, BMW invested sufficiently in resource recombination after acquiring Rover. BMW was able to drive down on production costs through offshoring some manufacturing procedures to the UK where the acquired facility was based (Dann Dann, 2007). This was a full investment by BMW. This process was successful to both Rover and BMW. Rover managed to increase sales while BMW managed to improve on automobile research and development. Since the acquisition of Rover, BMW has made many successful innovation and designs. There are many BMW manufacturing plants across the globe today. BMW apply certain strategies in the manufacturing of automobiles thus spreading many parts of the globe (Dann Dann, 2004). Currently, BMW is applying modern technology in manufacturing. This has created production facilities that apply robot technology. This strategy assists humans to develop digital application thereby creating modern automobiles and automotive . References Daft, R.L. (2015) Management. South-Western College Pub. Pp. 79-85. Dann, S., Dann, S. (2004)Strategic Internet marketing. Brisbane: John Wiley Sons. Pp. 4-9. Dann Fletcher, F. (2012) Business Problem Solving. Routledge. Pp. 29-45 Hanane, B., Mayrhofer, U. 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