International Business GMBA 2024

Name: Sirjana Rai Student no: 20234133

1.
The global economy can be viewed as a pyramid. The top of the pyramid consists of one
billion people with a per capita income of $20,000 or higher. The second tier consists of another
billion people making $2,000 to $20,000 a year. The vast majority of the world's population,
representing approximately 5 billion people, live at the base of this pyramid, making less than
$2,000 a year. If a person working at an MNE he/she can implement several strategies to take
advantage.

a. Market Research: The first step in market research is to establish objectives and
research questions. Then, proper methods such as surveys and focus groups should be
chosen, and a sample population should be selected. Collected data is analyzed in order to
find patterns and insights that can be used to draw conclusions, make recommendations,
and report findings to stakeholders. For instance, if a company is about to introduce a line
of cheap smartphones in developing countries, the results of the research can show that
consumers value battery life and cameras the most. This data will be necessary to create
and advertise the right products.

b. A blend of luxury and economy: If we look at a list of the top 100 global companies
today, both the luxury and mass-market sectors are well represented. Many of the
companies in emerging markets have never had the freedom to serve just one sector or
the other. So in this type of market businesses will need to create products and services
that appeal to customers across a much wider range of income levels. For instance, Tata
is reputable in the middle- and bottom-of-the-pyramid segments as well as the premium
segment. For all consumer segments, its brand demands design that adheres to the same
criteria, yet with distinct aesthetics.consumer categories.
c. Trust and Community before Transaction: Trust is another crucial requirement. For
example, the innovation of the snack, detergent, and personal care sectors emerged
majorly due to the incorporation of local salespeople and local opportunities to test the
items. Despite the vast investment in developing products, most businesses invest almost
nothing in customer care. The invention of new feedback, new ways to deliver the
products, and co-creation platforms bridge the information gap and the trust gap. The
increasing competition demands that businesses develop better ways of attending to their
customers.

d. Social Impact Initiatives: The role of business in helping to establish social codes and
norms is at the heart of its power to transform society. Regardless of a person’s income or
 profession, daily survival requires a series of transactions through cash, barter, or credit.
The way those transactions are constructed affects how easily people can transition
between professions, locations, and lifestyles. The need to be heard and respected is
universal, and the engagement of firms is helping make this happen for a much larger
community than ever before.

2.
The correlation between the success and failure of global firms and the institution- and
resource-based views is that both views are necessary to achieve success. Organizations must
have the resources necessary to succeed, such as capital, capable employees, and intellectual
property, but they must also be aware of the external environment to be able to generate and take
advantage of opportunities. If a company lacks the resources or does not have an understanding
of the external environment, it will not be able to survive and be successful in the global market.

A. Institution-based View: The institution-based view states that organizations must be

aware of their external environment, such as regulations, economic trends, and the culture
of the society they operate in, and use this knowledge to form strategies to be successful.
● Success: Business that follow the rules and regulations of the country in which they
conduct business will enjoy success and may participate in community work.
● Failure: Businesses that believe lawyers should not be a part of their organization,
either in-house or external counsel. They believe that legal help should only be called for
when problems arise and may end up in filing for bankruptcy.
B. Resource-based View: The resource-based view argues that the most important factor
for success is the internal resources of the organization, such as its people, capital, and
intellectual property.
● Success: Businesses with unique advantages over their competitors, such as superior
technology, a well-known brand, or highly skilled personnel, have a higher chance of
success. They differentiate themselves from the competition and satisfy clients by using
these unique features.
● Failure: At the same time, companies without unique assets or the inability to maximize
existing capital will face a similar problem – they will not be able to attract and retain
customers and will always be behind those who offer something more interesting.

In simple language, the most successful international businesses comply with local laws, know
all possible cultural differences, and offer their clients something others do not. As a result, those
who ignore these points will not even be able to compete and face inevitable problems.
3.
The dimension approach Theory is a framework used to understand the differences in culture
across countries and the ways that business is done across different cultures. In other words, the
framework is used to distinguish between different national cultures, the dimensions of culture,
their impact on etiquette and to facilitate communication in areas ranging from business to
diplomacy.

A. Power Distance: This is the way people in a society relate to each other on a hierarchical
scale. A culture that gives great deference to a person of authority is a High Power Distance
culture, and a culture that values the equal treatment of everyone is a Low Power Distance
culture. Firstly, in High Power Distance cultures, it is believed that the source of societal stability
is inequality. Secondly, status consistency power brings status and wealth.
In contrast, Low Power Distance cultures argue that sometimes inequality is
indispensable, but for the most part, people wish their relationships with others to be equal. And
believes Power, status, and wealth do not need to go together.
B. Individualism vs. Collectivism: This dimension identifies how people of a society relate to
each other, in living arrangements, decision-making processes, and values.
Individualistic societies stress achievement and individual rights, focusing on the needs
of oneself and one’s immediate family. A person’s self-image in this category is defined as “I.”

In contrast, collectivist societies place greater importance on the goals and well-being of
the group, with a person’s self-image in this category being more similar to a “We.” Those from
collectivist cultures tend to emphasize relationships and loyalty more than those from
individualistic cultures.

C. Masculinity vs. Femininity: Femininity vs. masculinity, also known as gender role
differentiation. This dimension looks at how much a society values traditional masculine and
feminine roles.
In Masculinity society Men are supposed to be assertive, tough, and focused on material
success; women are supposed to be more modest, tender, and concerned with the quality of life."
In masculine cultures, men hold more positions of power, get paid more, and are expected to act
in a masculine manner. Countries like the United States, Mexico, China, and Japan are all
considered to be masculine. "Masculinity stands for a society in which social gender roles are
distinct.
Whereas Feminine cultures tend to have loose gender roles, equal pay, female
representation in most positions of power, and quality of life and relationships with people are
valued over materialistic items like money or expensive cars. Countries that are considered
feminine cultures are Sweden, Norway, the Netherlands, and Costa Rica where both men and
women are supposed to be modest, tender, and concerned with the quality of life."

D. Uncertainty Avoidance: This dimension deals with how much a society can cope with the
uncertainty of the future. Uncertainty can create anxiety, and all societies have found coping
mechanisms to deal with that anxiety. These coping mechanisms tend to fall into three
categories: technology, law, and religion. Those cultures that have a high level of uncertainty
avoidance tend to rely very strongly on their set rules and ways of doing things. It may be seen as
an attempt to control as much of the uncertainty as possible.

E. Long-Term Orientation: This dimension explains long-term planning, perseverance, and

tradition i.e. long-term orientation vs short-term results, adaptability, and pragmatism i.e. (short-
term orientation. In cultures with a long-term orientation tradition, perseverance, and thrift are
valued, and business contracts and agreements may reflect a commitment to enduring
relationships and mutual trust. Contracts may be longer in duration, spanning several years or
even decades, to signify stability and reliability. These agreements may include clauses for
regular performance evaluations and long-term investment plans.
Furthermore, in cultures with a short-term orientation, where adaptability, immediate
results, and innovation are prioritized, business contracts and agreements may be shorter and
more flexible. Contracts may be designed to accommodate rapid changes in market conditions.

Thank you!