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Three Questions - Essay Example

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Business Name: Course: Institution: Instructor: Date: Question 1a Economic There are various economic models that are used by countries in trying to manage the country’s risks. Two of these models include Mann’s SPT and Porter’s Diamond even though there is a debate on which economic model is most appropriate…
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Download file to see previous pages This model assists in analyzing and improving a country’s position in an internationally competitive field. It demonstrates that nations can be competitive regardless of factors like natural possessions such as land and the other resources. According to (Botten, 2007), the government has a role of encouraging and pushing organizations to the most competitive levels so as to increase performance and eventually help realize a total joint benefit. Mann’s SPT model only talks of developing the triangles used in profiling countries and organizations, as depicted in (Wesport: Praeger Publishing, 2006) by Clarence Mann when the author talks about ways of managing risks in a country using social process triangle. Question 1b Porter’s Diamond model highlights major points in managing risks in a country. The points outlined here major on; foreign direct investment, government, multinational enterprises and the Double diamond. Foreign Direct Investment tends to focus within a particular continental area. According to Porter’s model, outward FDI (Foreign Direct Investment) is very valuable in generating competitive advantage as opposed to inward FDI which is termed entirely unhealthy. (Norton, 2009) points out that comparative disadvantage results from foreign subsidiaries being only importers, one of the reasons that has ultimately influenced India’s Coca cola import and export economy. FDI’s statements have been questionable but results from research and development carried out by foreign-owned firms indicate that the big 20 U.S subsidiaries in India, export nearly as much as the ones they import! The Government also has influenced the competitive advantage of this nation and its policies. For instance, they can employ subsidies for penalizing foreign investors indirectly or use tariffs directly for entry barrier to penalize them. (Dunning, 1991) suggests that using Porter’s Diamond model enhances international competition, but when government restrictions on foreign competition are introduced, inferior goods are produced which amounts in failure to compete successfully due to restrictions. Multinational Enterprise such has Coca Cola has led to the tremendous growth of the economies due to the same product being consumed worldwide by many nations. Also, as a result of its acceptance by multitudes worldwide, it has become easy for the Company to monopolize the market setting a stiff competitive market to its advantage. Apart from this, Double diamond has influenced India in a very devastating way. Case in point, Porter’s views are accustomed and limited to their own trainings and working as per US standards and business principles! Meaning, firms that are in economically small nations, like India, the repercussions of Porter's diamond are distressing (Hodgetts, 1993). Question 2a Political Coca Cola Company in India has got several stakeholders that keep it up and going. Some of these stakeholders include; International Union of Foodworkers, International Labor Organization, Aim Progress, Human Rights Conferences, Bank of New York Mellon Corporation and State Street Corporation. The International Union of Food Workers is a federation of trade unions working worldwide to represent workers needs and interests. They serve to represent workers in sectors such as agriculture and plantation, food and beverages and also hotels. The IUF provides a forum for Coca Cola to discuss quite a number of ...Download file to see next pagesRead More
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