INTERNATIONAL BUSINESS

MANAGEMENT

ASSIGNMENT – 1

SUBMITTED BY
DEVI P (71762252014)
SHNEHA V L (71762252044)
SAMUKTHA LAXMI B(71762252)
THIVYA BHARATHI M(71762252054)
QUESTION 2
‘Multinational Enterprises (MNEs) and Small- and Medium-sized Enterprises (SMEs),
are at the core of spreading globalization’.

In the context of this statement, critically evaluate the role played by MNEs, SMEs,
Global Value Chains and Global Production Networks, coupled with National and
Global institutions which connect firms globally.

ANSWERS:

The statement highlights the significant role played by Multinational Enterprises

(MNEs) and Small- and Medium-sized Enterprises (SMEs) in spreading globalization. Let's
critically evaluate the roles of these entities along with Global Value Chains (GVCs), Global
Production Networks (GPNs), and national and global institutions in connecting firms
globally:

1. Multinational Enterprises (MNEs):

- MNEs are key drivers of globalization as they expand their operations across borders,
facilitating the flow of goods, services, and capital.
- They bring in foreign direct investment (FDI) to host countries, create jobs, and transfer
knowledge and technology.
- Critics argue that MNEs can exploit lower labor and environmental standards in some
countries, leading to negative social and environmental impacts.

2. Small- and Medium-sized Enterprises (SMEs):

- SMEs also contribute to globalization by participating in international trade and GVCs as
suppliers to larger MNEs.
- They often face challenges in accessing global markets due to limited resources and
capacity.
- Government support and international partnerships can enhance the global reach of SMEs.

3. Global Value Chains (GVCs) and Global Production Networks (GPNs):

- GVCs and GPNs involve the interconnected production processes across multiple
countries, driven by MNEs.
- They allow for specialization and efficiency but can also lead to dependency and
vulnerability for some nations.
- The integration of SMEs into GVCs can help them access global markets and technology.

4. National and Global Institutions:

- National governments play a role in shaping globalization through trade policies, taxation,
and regulations.
- International institutions like the World Trade Organization (WTO), World Bank, and IMF
provide frameworks for global economic cooperation.
- Critics argue that these institutions can disproportionately favor the interests of developed
nations.

5. Connectivity and Challenges:

- Connectivity between firms globally has been facilitated by advances in technology,
communication, and transportation.
 - Challenges include income inequality, exploitation of labor in less-regulated markets, and
environmental degradation associated with globalization.

In conclusion, MNEs and SMEs are indeed central to spreading globalization through
their involvement in GVCs and GPNs. These processes are influenced by national and global
institutions, which can have both positive and negative impacts. To promote a more equitable
and sustainable form of globalization, it is essential to address the challenges and ensure that
the benefits are distributed more fairly among nations and within societies.

QUESTION 4
Construct the resource-based view (RBV) and the VRIO framework. Use this
framework to discuss in detail how a firm can utilize its ‘resources ‘ and ‘capabilities’ to
achieve company growth and internationalization.

ANSWERS:

The Resource-Based View (RBV) and the VRIO framework are strategic management
tools that help firms identify and utilize their key resources and capabilities to gain a
competitive advantage. Here's how these frameworks work and how a firm can leverage its
resources and capabilities for growth and internationalization:

Resource-Based View (RBV):

RBV suggests that a firm's resources and capabilities are the primary sources of its
competitive advantage. Resources can be tangible (e.g., physical assets, financial resources)
or intangible (e.g., knowledge, brand reputation), and capabilities refer to the firm's ability to
integrate, deploy, and reconfigure its resources effectively.

VRIO Framework:

The VRIO framework evaluates a firm's resources and capabilities based on four criteria:

1. Valuable: Is the resource or capability valuable in exploiting opportunities or defending

against threats?
2. Rare: Is the resource or capability rare among competitors?
3. Inimitable:Is it difficult for other firms to imitate or replicate the resource or capability?
4. Organized (Non-substitutable):Is the firm organized to exploit the resource or capability
effectively, and are there no viable substitutes?

Utilizing Resources and Capabilities for Growth and Internationalization:

1. Identify Core Competencies:Determine the unique skills, technologies, or processes that

set your firm apart. These are your core competencies.

2. Invest in Human Capital: Develop your employees' skills and knowledge to enhance
intangible resources. Well-trained and knowledgeable employees are a valuable asset.

3. Innovate and Adapt: Foster a culture of innovation to continually enhance products,

services, or processes. Innovation can create valuable, rare, and difficult-to-imitate resources.
4. Strategic Alliances:Collaborate with partners who possess complementary resources and
capabilities. Strategic alliances can enhance your firm's overall resource base.

5. Internationalization:When expanding internationally, assess how your resources and

capabilities fit the new market. Adapt your products or services to meet local demands,
leveraging your existing capabilities where possible.

6. Risk Management:Evaluate potential risks and uncertainties in the international market.

Utilize your firm's financial resources and risk management capabilities to mitigate these
risks effectively.

7. Brand and Reputation: Invest in building a strong brand and reputation. A positive brand
image is a valuable, rare, and non-substitutable resource that can facilitate international
expansion.

8. Continuous Evaluation:Regularly assess your resources and capabilities against the VRIO
criteria. Periodic evaluations ensure that your competitive advantage remains sustainable over
time.

By applying the RBV and VRIO frameworks, firms can strategically leverage their
resources and capabilities to achieve sustainable growth and successful internationalization.
EXAMPLE :

VRIO framework of “Starbucks”: