Food industry Case Study Solution
Please argue flat world view and multi-domestic view with respect to the foods industry.
Flat world view
Considering the flat world view on the food industry;the European-based multinational enterprises have beenexperiencing an increase in the capitalism of the states. This is evidenced by anincrease in the direct support from government to domestic industries, sovereign wealth funds, and roles of state-owned enterprises.Although,flat worldview is associated with an advancement in technological approaches,but there has been a significant loss in the employment rate in the food industry. This led to an emergence of a critical issue,i.e. the loss in employment rate against the globalization benefits. (Mariadoss, 2019)
The increased concerns of scrutiny for the policy makers has been a part of multidomestic view. Changes in the geopolitical factors havebeen influencing the MNEs in the food industry as well,followed by four factors. Such factors include the rise in protectionism in Russia, India and the United States, which led to the announcement of not less than 500 discriminatory trade measures. Similarly, an increase in the bilateral trade agreements and the development of new financial regional institutions, created differences whichmadetrading a challenging task.
However, the concept of flat world was primarily based on easy strategic approach that has the capability to allow national or domestic organizations to operate at an international level, with the same approach. But, the cultural, political and geographical differences have greatly influenced the way organizations operate at international level, claiming thatthe world is not flat rather we live in a world that represents multidomestic view.
The demographics change in the economies related to shopping and consumption benefits, building of new distribution channels, product portfolios of packaged goods are the three factors that vary across different states. This is because of the change in cultural, geographic and economic values. The development of new distribution channel tends to increase the transportation cost,followed by a significant decline in the productsâ€™ demand. Due to the reason thatonly one fifth part of the equity shares of the world is expected to be held by the investors,i.e. outside the home market of a particular organization. (Yevtukhova, 2020)
As stated by Pankaj Ghemawat, not less than 90 percent investment, web traffic and phone calls are local. In terms of financial investment; the revenue growth by industry is considered, the numbers represent the connectivity only at local level and differ internationally. (Ghemawat, 2007)In essence, the retail sales of the packaged foods across the world, was estimated to be around $2.11 trillion in comparison to $182.5 billion in Japan, in the year 2016. Additionally, the response of MNEs to the local needs of the people was greatly influenced by the some local factors, i.e. domestic competitors, national regulations, government demands, distribution channel, technical standards, infrastructure, way of doing business, consumer preferences and culture.
The potential consequences posed by the flat world, represent the requirement by the theorists and other people to rethink about the difference that clearly states an alternate perspective about the strategic approach regarding the emergence of markets or globalization. (Officials, 2012)
Please discuss how Garrard S.A. has approached both globally and locally to the industry, based on your findings in Q.2.
Approach of Garrard
Since the establishment of the organization; the approach of Garrard with globalization was found to be associated with granting autonomy to the local managers, for an efficient management of the distributionâ€™s disruptions. In terms of localization;Garrardâ€™s headquarter relocated its line managers according to the track records for the management of local businesses. In contrast, the approach to globalization was through the development of robust national subsidiaries of the organization, i.e. sensitive to the opportunities represented by the local market and the adaption of products to meet the local needs from the rest of the world………………………………
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