Free Sample on Multinational Enterprises and the Global Economy

Question: Discuss about the Multinational Enterprises and Global Economy. Answer: Introduction: It is evident that organization, in order to attain profit-making opportunities, desires to go international and adopts several tactics that can provide them a competitive advantage. Dunning and Lundan (2008) depicts that in the international markets, organization possess an intention for increased scale of production and hence sell their products/services at lower cost. This is the strategy used by Bharti Airtel. They expanded their business through the low-cost model and targeted other emerging nations for more sales of their services. Moreover, Meyer (2008) portrays that Airtel had started internationalizing into neighboring markets and acquired resources and companies. In this way, the companies that are not successfully established in the community help in the expansion of their business across the world. Taken for instance, Bharti Airtel acquired Zain Africa that is the leading telecom service provider in Africa and operating in 18 countries. Moreover, they also acquired stakes of Bangladeshs Warid Telecom International (Rugman, 2016). This organization is a subsidy of the UAEs Dhabi Group. These frequent acquisitions result in internationalization of the Bharti Airtel Group. Hennart (2012) also mentions that beforehand, people of Europe and the USA are less aware of these subsidiaries telecom organization but Airtel makes people knowledge regarding these small firms. The quality of the services that is provided by the Bharti Airtel to all their customers is same as they adapt a similar strategy for all their users. This represents that they adopt a geocentric approach for internationalization. Other firms like HSBS and Vodafone adopts the similar tactic of acquisition. Dunning and Lundan (2008) defines that the Asian financial institution that is HSBS Bank acquired the Europes leading bank Midland Bank and now expanded their business internationally through whole and partial equity investment in other banks. Moreover, Archetypon S.A. is a successful European SME do not acquire leading organization but collaborates with other IT companies so that they can offer their services to another county (Teece, 2014). This country has adopted an ethnocentric approach that possesses home countrys perspective without cultural adoption and became an international leader in Software Globalization and Multi-Language translation. Thus, it can be seen that instead of acquiring other companies, European MNE's prefer to attain internationalization by improvising their services. Uniqueness of Bharti Airtels model to the emerging MNEs Lebedev et al. (2015) stated that the uniqueness of the Bharti Airtel lies in entering into other emerging markets. The primary benefit that they receive is they can get benefit from the resources and capabilities of the emerging countries. Those countries seek for an opportunity and their service expansion thus, in most of the cases they merged with leading organization like Bharti Airtel. Reddy et al. (2016) also depict that, Airtel also share their stake with other telecom industries like they did with SingTel, Singapore and Warburg Pincus for better industrial growth. This diverse collaboration is the unique approach that other continents MNEs does not follow. In addition to that, Bharti Airtels model is considered as a unique model for telecom and effective for all the emerging markets such as India and China. In most of the countries, Airtel has established itself as a dominant player with the help of its innovative business methods and powerful brand (Hennart, 2012). Most of t he organization in the same industry is trying to get hold of Indian markets, while Airtel is trying to put more focus on foreign markets. Management of the organization realized that its extensive experience that they gathered from Indian markets along with its unique business model would help to tap the opportunity provided by other emerging markets. As a result, Airtel claimed Zain Group's telecom business in more than 10 African countries (Etemad, 2013). It gave the organization a good start in the African continent. Some major factors of Airtels foreign business model are mentioned below. The company is dedicated to understanding the significance of business method innovation and strategic partnership. Management of the company has always appreciated the role of tailoring strategy as it can help to fit into a specific business atmosphere. Rugman (2016) mentioned that RD team of the organization quickly understood and implemented cross-country differences in cultural, demographic and market conditions. Airtel always invested heavily in figuring out the ways through which a business can be successful in foreign markets (Reddy et al. 2016). Another unique model of Airtel is "minute factory model" that they used in Bangladesh after acquiring Warid Telecom (Khan, 2012). Airtel's international corporate level strategies in all other places are hereby mentioned below. Cost responsive Airtels domestic pricing model varies from country to country as well as state to state. It also depends on the demands of the customer segment and demographical segment (Rugman, 2016). Local responsiveness Meyer (2008) stated that Airtels management entirely depends on the demands of consumers and delivers solutions to consumers according to their requirements. Management of the organization addresses the local responsiveness with utmost importance. Creating of value through diversification Management of Airtel always tries to find value via diversification by moving across businesses that are both operationally and corporately connected (Khan, 2012). High sharing of important resources and major cost reduction are two significant strategies of Airtel in their business model. Implications of the rise of emerging economy MNEs such as BhartiAirtel for globalization Some of the factors that influence the brand recognition to develop across the world are its primary motive for attaining profit-making opportunities and competitive advantage. This primary can be achieved by changing the international environment. Reddy et al. (2016) in this context states that this expansion of the business can be easily occurred by reducing the trade barriers and developing the organizational performance. Several organization like retails companies or manufacturing companies also adopts the modern technology of computerization to reach customers across the globe irrespective of the fact that they do not have any physical store in that country (Meyer, 2008). Moreover, an organization like Bharti Airtel looks for the opportunity to access resources of the other nation and that is obtained by acquiring other organization in the same field of the emerging nations. Rugman (2016) stated that companies also reduce their cost so that more people of a new nation can use their product. Furthermore, the stability in the international relation and the ease in international trade and incensement also drive the internationalism of the organization. Reference List Dunning, J.H. and Lundan, S.M. (2008).Multinational enterprises and the global economy. Edward Elgar Publishing. Etemad, H. (2013).The process of internationalization in emerging SMEs and emerging economies. Edward Elgar Publishing. Hennart, J.F. (2012). Emerging market multinationals and the theory of the multinational enterprise.Global Strategy Journal,2(3), pp.168-187. Khan, H.R. (2012). Outward Indian FDIrecent trends emerging issues.A keynote address delivered at the Bombay Chamber of Commerce and Industry, Mumbai,2. Lebedev, S., Peng, M.W., Xie, E. and Stevens, C.E. (2015). Mergers and acquisitions in and out of emerging economies.Journal of World Business,50(4), pp.651-662. Meyer, K.E. (2008).Multinational enterprises and host economies. Edward Elgar Publishing. Reddy, K.S., Li, Y. and Xie, E. (2016). Economic Transition and Cross-border Mergers Acquisitions: The Indian Experience among BRICs.Journal of Comparative International Management,18(2). Rugman, A.M. (2016). Multinational enterprises from emerging markets.Securing the Global Economy: G8 Global Governance for a Post-Crisis World, p.63. Teece, D.J. (2014). A dynamic capabilities-based entrepreneurial theory of the multinational enterprise.Journal of International Business Studies,45(1), pp.8-37.