Around then it created the impression that a holistic approach to internationalization was better prepared to mirror the more sophisticated forms of firm’s international activities. It was because, the number of firms that worked in global markets was growing. SMEs driven by global patterns were frequently forced to form strategic alliances, go into cooperative manufacturing arrangements, acting as both licensee and licensor or both franchisee and franchisor. Moreover, the holistic approach was additionally a more proper depiction of the association of "born global" SMEs, transnational firms undertaking international business in new electronic
For example, MNC provides as a major source of capital and technology for economic development within a country. Continuing restructuring of manufacturing and services is very important in the nature of world economy. MNCs play a significant role in transfer of technology between the countries. There is an increased importance of regionalization in world economy. MNCs of major economic powers continue to invest in one another’s economies as a strategy.
When a firm successfully formulates and implement value-creating strategy, by put the commitments on action so that it increases the range of opportunities for firms to compete in the market. At this area, globalization happen when the resources and the capabilities found in the home country or the headquarters allow the firms to pursue the strategy into market located in other countries. Based on Michael Porter’s model, four factors that contributed to the firm in a dominant global industry are factor of production which is land, labour, capital. The second dimension is demand conditions where the nature and size of buyers need. Third dimension is a related and supporting industry and lastly the firm strategy, structure and rivalry.
SMEs have been drawing a lot of attention of scholars by playing an increasingly active role in international markets during recent years. SMEs rapidly expand their businesses to international markets and use international diversification as an important strategic option to achieve growth. The topic area brings some of the ‘much talked about’ theories and models into action such as The Uppsala Internationalization Process Model, Network Theory, International Entrepreneurship Theory as well as some interesting and significant phenomenon of today’s business world such as International New Ventures (INVs) or Born Global. To understand what internationalization is and how various researchers have explained the process and the differences in internationalization models, the researcher have to look at the mainstream internationalization theories. These are theories that have mostly affected the knowledge base of internationalization throughout the years and have been a great added value to the international business community into how to adopt effective strategies as firms ' international market and operation strategies have been an area of wide research interest in international business for decades.
As Creazza & Dallari (2010) argued, technical progress, liberalization of markets and the diffusion of global production systems are creating new opportunities and challenges for industrialized countries as well as for the global market economy. Each manufacturing company that needs to alter its business process has to decide how to source its activities; to execute them in-house or to outsource (Graf & Mudambi, 2005). Once the firm selects to outsource, it has to select its partners and the location of the business process operation. Manufacturing firms tried to exploit opportunities of these new conditions by outsourcing their production to countries with cheaper labor and manufacturing costs (Bock, 2008). These areas were selected based on some economic drivers that offer attractive production costs.
Furthermore this clarifies the ongoing process through the way countries and people communicate and integrate. In which has caused impacts to the world in numerous of ways i.e. socially, economically and culturally. For instant globalisation is seen as a means for economic development. This refers to the integration of “the domestic economies with the world and the inevitable consequential increase in economic interdependence of the countries through trade, financial and investment flows, freer factor movements and exchange of technology and information.” (Ogbabu & Ameh, 2012, p.49).
“The multinational corporation and international production reflect a world in which capital and technology have become increasingly mobile” - Robert Gilpin. Multinational corporation (MNC) or called as transnational corporation is an organization focusing on business concern with operations about productions or services in more than one country. It plays an important role in the contemporary global economy, and has developed in power and visibility in recent years over developing countries in particular, and developed countries in general (Eldridge, 2011). Therefore, it is incontrovertible that the advantages from multinational production are huge for MNCs. However, the rise of multinational production brings about both opportunities and threats
Along with rapidly increasing globalization, international business has become a popular topic and has drawn the attention of business executives, government officials and academics. At the international level, both economic globalization differences between countries stand as opportunities and challenges to international businesses. Globalized business environment has to be considered when making international strategic decisions and in managing ongoing international operations.
CHAPTER 2 LITERATURE REVIEW In this chapter, literature, theories and other related information is screened and summarized to give a better perspective of factors of the hotel chain development. 2.1 Globalization Currently, tourism becomes increasingly global. Becoming a global tourist market is accompanied by a powerful process of trans-nationalization, which find expression in the international interweaving of private capital, strengthening the ties between the monopolies of different countries and a wide development of transnational companies in the tourist business. According to the study of Malyushenkova (2014) the process of globalization - high availability of foreign markets , the development of transport systems, new ways of sharing information and modern technology - all these factors have a huge impact on tourism. The sharp increase in the number of tourists, business travelers, and students participating in international educational programs is reflected in the change of the hotel sector.
TASK-1 Q:1 The market entry can be improve and can be enhance by making relations with the internal and external countries distributors , agents and vendors. We have seen in making foreign relations, tourist agents use to come to visit the country. Foreign investors that want to capitalize on these markets have large opportunities providing that they are aware that quality, price, payment conditions and warranties are critical factors for successful economy. Many countries have strong backgrounds in engineering, medicine, economics, and the sciences, but there is a shortage of professionals with Western management skills. The demand for skilled managers will increase with the advent of high technology, innovative and knowledge-based companies.