Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 Current theories of international business and its application to industry:.................................1 Food industry's global production and marketing orientation:..................................................6 Theories of international business that helps in understanding the food industry......................8 Historical context of the theory's development.........................................................................10 CONCLUSION..............................................................................................................................11 RECOMMENDATIONS...............................................................................................................12 REFERENCES..............................................................................................................................13
INTRODUCTION The Multinational in Global Production and Trade Networks demonstrate production and trade networks of multinational firm.Different changes occur in organizations considering the need and requirements of customer's in Australia.These changes can be cultural, technological, strategic, operational etc. that is significant to attract more customers towards industry (Johanson and Mattsson, 2015).In this global world, National Competitive Advantage- Porter's Diamond, New Trade Theory and the Global Value Change theory are implemented for various changes in international businesses.This report aims at explaining institutional structure and currenthistory of all three theories in food industry.Moreover, all above theories is also applied in this report to specify global production and marketing orientation of industry.Further, the report aims in describing financial information of food industry like Domino's, Mc' Donald, etc. which helps in deriving its global position and boosting performance worldwide. Lastly, it also covers the government and civil regulations by implying different theories in food industry. MAIN BODY Current theories of international business and its application to industry: National Competitive Advantage- Porter's Diamond theory, New Trade Theory and Global Value Change is applied in the industry which helps in expansion of its product internationally. Further, the focus is made on theories which are applied in business for its better growth and efficiency. The food industry supplies eatables and beverages that involves grains, dairy items, seafood, wine and many more that represents it's growth in Australia.There are mainly Domino's, Mc' Donald’s, and many more(Turkina, Van Assche and Kali, 2016). National Competitive Advantage- Porter's Diamond theory:
Figure1: Porter's diamond model [Source:Arvis, Dairabayeva and Kiiski, 2018] According to view ofDunning, (2015)Porter’s diamond model or theory of National Advantages is the framework which is working to find out competitive advantage that nation is possessing and way in which government can help to improve position of country within global world. All companies of world could be using the national advantage translating it into international advantages suggesting that home country of company play very important role in creating this advantage on global scale as well. As per the view ofClark and Wójcik, (2018)with the use of Porter diamond model country or company could themselves improve their advantage with using technological advancements, support of government and skilled labour as well. As per the above figure there are 4 dimensions of Porter Diamond Model or theory which is broadly describing all factors. All the factors of this diamond will be linked and related to each other as these will also be deciding over Domino’s comparative economic advantages 1. Factor condition-This component of Domino’s will be related to their production condition like that of infrastructure and knowledge as they are the relevant and important factor for attaining competitiveness of food industry (Amador and Cabral, 2016). The factors are like that of labour, cost, raw material and commitments of employees towards work. Other factors include that of quality of research, natural resources like that of minerals and climate were Domino’s is
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operating. Like the climatic condition of Australia and its availability of resources as well so that competitive position is created in international market. 2. Related and supporting industries-The success of Domino’s will also be depending upon its related and supporting industries like that of their suppliers of raw material, supported firms like Coca Cola and Pepsi of Dominos as well. If the competitive supplier to these products and reinforcing innovation and internationalisation then this also have its impact on Domino’s. So within the success of Dominos within Australia will also be depending upon the benefits related to its supporting industries. 3. Home demand condition- There is strong relationship between the cost of transportation, size of home markets and economies of scale in Australia (Saslavsky and Shepherd, 2014). So the condition of Domino’s in its home country will be impacting suppliers and economies of scale could be attained with the size of home market. 4. Strategy, structure and rivalry-The way or manner in which Domino’s is been operated, managed and organised according to their corporate objective and number of rival firms operating withinmarketis alsoanotherfactor forattaining competitiveadvantages. The condition of country that is determining market position and standing of Domino’s is also another determent factor. All these factors which are stated above will be relevant in current market condition as well as gaining competitive advantages and making global presence of Domino’s is very much essential (Antràs and Yeaple, 2014). But the demand in home country is that factor which is changing over time as relation of Domino’s with its home country which America is not witnessed much due to its global presence in almost all countries of world. Porter's diamond theory helps in knowing the availability of production factors instead of upgrading the products. However, the competitive theory also strongly builds the communication structure within the industry and also with the customer's.In regards to this Diamond model, it also determines that food industry is very competitive in the world (Arvis and et.al., 2018). Porter's model helps positively inadvancing the industry with the help of advanced factors which already exists in that industry itself. In addition to this,it focuses on hygiene in the production process which is important in expanding the business. The skilled employee's and labours help in making the industry more competitive. Porter views the intensity ofDomino's foodto an individual requirement which is almost significant in this competitive world (Sassen, 2016). In
addition to this, if industry applies this theory then they are able to lead the business with effectivesupervisioninit.Moreover,Porter'sdiamondtheoryfailsinclarifyingvarious circumstances as demand conditions, related and supported industries, and structure and rivalry factors.The advanced and technological factors ofDomino's in food industry is affected negatively by Porter's theory and moreover Domino's adapted next theory "Trade theory" that is very significant to exist in this competitive world. People are now-a-days interested in fast food products which should also be healthy and hygienic. For example, Domino’s is expert in serving their products and services but they failed in regards to serve in hygiene manner. In addition to this, they adapted Porter’s diamond theory that helps in serving healthy products to customers. Moreover, rapid growth of industry is achieved through this theory. The net income of Domino's is pound 214.68 million which is achieved with the help of competitive theory. Trade Theory: To identify and clarify about demand conditions and technological factors in the industry like Domino's Trade theory is adapted wisely.Comparative Advantage Trade Theory and Competitiveness/ Competitive Advantages are the two main theory determined in industry.The first theory is positively supporting the economic stabilityof Australia that produces products at lower cost as compared to other competitors (Kennedy, Welch and Monshipouri, 2017). If ComparativeAdvantageTradeTheoryisappliedinindustry,itprovidesabsoluteand comparative advantage in the country. Absolute advantage is gained by industry which is more productive as compared to other country. In addition to this, the comparative advantage is adapted by cost efficiency of food industry in Australia. According to New Trade Theory, it has been approved and applied in industry as it helps in achieving high economic value of country (McNaughton, 2018). Moreover, they also increase their revenue with higher demands in the global market.Domino's has achieved growth of 6.46% annually with the help of Trade theory and also helps in serving hygienic products.In addition to this, the model of New Trade helps in increasing the customer's in the market. New Trade theory serves as a necessary source of various advantages like absolute and comparative which helps to exists in this global world. By applying Competitiveness/ Competitive Advantages theory the financial position of industry goes high with the different innovations and better productivity in industry.In addition to this, New Trade theory fails in reducing the cost of Domino's products that does not attract more
customer's towards industry. Further the industry adapts another Global Value Chain theory that helps in reducing cost which increases potential customer's towards Domino's. Global Value Chain Theory: As per the view ofPickles, Smith and Rudolf, (2016)Global Value Chain Theory is that concept which is analyzed in international trade comprising of complete range of activities and factors that are required to bring product from starting point, its designing, collection its raw material, marketing and then reaching out to end-use customers. As Domino’s is the world’s leading pizza delivery company and is having its unique supply and business model. Now it is been using online delivery ideas and allowing customers to track their order so Global Value Chain Theory is playing more important role in current scenario of development of Domino’s. But in today’s context company must be involving more centralized system of home delivery so that their customers are finding it easy to track their order. The food industry like Domino's failed in reducing cost through Trade theory and GVC is adapted accordingly. This theory positively impact on Domino's for serving products and services at lower cost as to make affordable for every customer's (Los, Timmer and de Vries, 2015).Global Value Chain theory helps in increasing investment, trade and production in the industry. GVC theory if applied in industry it helps in analysing the international production in Australia. Further, this model helps in increasing the production and trade factors widely in the industry(Buckley and Ghauri, 2015). In this world, the globalization theory motivates the companyinrestructuringtheiroperationalstructureandculture.Inadditiontothis,the coordination in all the activities is maintained through Global Value Chain theory.Lastly, this theory is supportive to Domino's which impacts positively in all the factors of industry. If GVC theory is applied in the industry then it has a wider impact in expanding the business.Moreover, National Competitive Advantage- Porter's Diamond theory, New Trade Theory failed in industry to provide the positive relation between their customer's andthe corporations of food industry.Global Value Change is highly significant in increasing the profitability and productivity in Australia. For instance, the food industry relates to Domino's, Mc Donald's, Starbucks and many more.In addition to this, Global Value Chain theoryshows the high efficiency and effectiveness of the industry (Taylor and Derudder, 2015). There are also strong and favourable policies of government with regards to Domino's, Mc Donalds, Starbucks and so on.
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Food industry'sglobal production and marketing orientation: In this global world, industry has been going on inventing new items in the market as it results in widening its institutional structure.For example, Domino's introduced Pizza with topping of "Spicy Banana" in the year 2014 which became popular in Australia and also outside the country. But after constructing Global Value Chain theory in thisindustry, it helps in increasing the food products globally. People are growing towards the fast food and are highly obliged in their health and hygiene (Antràs and Yeaple, 2014).Domino's was failing in identification of demand and technological factors before the adoption of GVC theory. Further, the difference was seen in company with the help of GVC theory.This theory supported in knowing the product's demand in food industry from sophisticated customer's. Due to global production of food market it involves various components like restaurants, street food, home delivery and many more (Buckley, 2014). There were also implications identified in marketing orientation of food industry. Moreover, GVC theory reflects its successfulness as it meets the needs and requirements of the customer's. In addition to this,theory also describes to focus on the delivering food items on time and moreover serving new flavours in every food products expands this industry in global market.Similarly, changes was seen in industry like example, Domino's is now serving their products within 30 minutes though home delivery.In regards to the production and its orientation, this industry is widely focused in researching external opportunities which develops the market strategies. Moreover, GVC refer to manage the agency of food corporations like Mc Donald's, Domino's, and so on in Australia and also in other countries. Further, Global Value Chainleads to global production of food industry (Yeung, 2014). In reference to this the main strategy of food market is to control the different stages in the production according to their policies. As per the theory of competitive advantage, this industry also focus on the location of their stores.Moreover, the implications and changes are seen when Domino's open their 670 or more stores in Australia. They also set their restaurants where the customer's find eligible and easy to purchase it.In building the competitiveness in the market, each product in terms of food are served with different flavours and with new innovations in it. This helps in increasing the efficiency of the stores at international level (Tintelnot, 2017). In designing food and with various quality in it, ensures to meet the customer's requirements. In addition to this, delivering
food has been made easy by receiving order through online or via cell phones. Global production and marketing orientation also refers to the advance demand of food which is basic element to survive in world. Moreover,GVC theory also increases the efficiencyof their products and services. Moreover, the people living in the society has more cravings of fast food in this innovative world. According to trade theory, the industries are seen on the global page only if they are prepared with their natural resources in their company (Sassen, 2018). In regards to the innovation and strong strategies of attracting customers towardscreative and colourful food items helps in flourishing the industry due to foreign demands. As per the theory food industry is becoming expert in maintaining their relations withpublicwhich enhances the demand in the market. Moreover, industry establishes their marketing plan which is appropriate in development of their more profits. Government and other civil regulations: The standards of safety place and obligations on the country that is Australia in terms of food industry which should be safe and edible. This regulations is undertaken in context of hygiene and health. The GVC theory explains the global pattern of food industry and in addition to this it also reflects the growing demand of restaurants. As this model helps in expansion of products and services in other countries also with the government regulations (Foley and Manova, 2015). In addition to this, the industry applies the Global Value Chain theoryas it is developing through online sources also. There are government and civil rules and regulations based on the conditions of food. Australian government has food safety standards which is concerned in providing well qualified goods to the customer's. The food standards of Australian government refers to the safety requirements of every kind of food items which are sold in market.For example, Domino's followFood Standard Act for maintaining health of customer's in Australia and also outside the country.In addition to this, the labelling of food must be properly done as it should be soldhighly qualified and on legal terms. One of the regulation relates to the hygiene in eatables that does not harm the customer's. Moreover, the agency of food corporations like Mc Donald's, Domino's, are also served online with the help of the GVC theory (Taglioni and Winkler, 2016). The Food SafetyAct 1991 is regulated and also followed by Domino's restaurants in terms of foodwhich focuses on the health of every individual's. In addition to this, all the owners of food business needs to take the permission of government. According to Competition and Consumer Act, 2010 food industries must relate to this law, which
helpsinprocessing,controllingandpackagingthefoodproductswiselyandefficiently. Moreover,thegoodswhicharealreadypackedshouldalsocomplytoNationalTrade Measurement Regulations 2009 that requires the information about size and position of the goods. In Australia, this also needs the name and address of the person who has packed the food articles (Steger, 2017). Further, government has also framed policy of claiming in response to any obligations. Under the law of Australian Consumer Law, customer can claim in any obligations against the supplier. In regards to the safety of customer's, government has passed the standard in order to make the products and services more safe. As perthe GVC theory, tomake the product exists for long term in market, food industry's are more focused about health of the customers. In Australia, government has undertaken Standard 3.2.2- Food Safety Practices and General Requirements for making food products more healthy. In addition to this, government has also passed Food Law and Policy (LAWS 10005) in maintaining the premises and campus hygienic. This law has been undertaken about cleanliness of the campus in which food is prepared (Ciuriakand et.al., 2015).As per this law,Food industry's like Domino's, Mc' Donalds, Starbucks and so on are attentive in maintaining the premises clean and healthy. Another Act that is passed by the Australian government is about the skills of and knowledge of the food handlers. Accordingly, Standard of Food Safety Practices and General Requirements includes the skill of a person who is handling food facility. All the food industry's perform in addition to New Trade Theory and Competitive theory along with the government standards, which helps in increasing the efficiency of the business wisely. Theories of international business that helps in understanding the food industry. There are mainly three theories that help in identification and knowing the industry widely. These theories are National Competitive Advantage- Porter's Diamond theory, Trade Theory andGlobal Value Chain.Moreover, the food industries like Domino's is growing only with GVC which supports in understanding history and trends of the food industry. National Competitive Advantage- Porter's Diamond theory: This theory based on internalisation was developed by American professor which helps in developing the business widely. Moreover, the industry adapted this model to understand their status and position in this competitive global market. The theory helps in knowing the overall performance of food industry in the market. The trend and modern ways of food industry is
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known by National Competitive Advantage- Porter's Diamond theory. Moreover, their value is highly added in response to National Competitive Advantage- Porter's Diamond theory (Wood, 2016). To reduce the pressure in industry, this model is widely supportive and enhanced. The Porter's Diamond theory is specialized in understanding the international market of food industry.The advanced and technological factors ofDomino's in food industry is affected negatively by Porter's theory.Moreover, this theory does not helps in knowing the history and trends of the industry. The food is a basic necessity and this model helps in maintaining the presence of food industry in Australia. The food relates to every kind of eatables and Porter's Diamond model failed in showing the establishment of food industry in international advantages (Cohn, 2016).Moreover, it plays a vital role in creating new innovations in the competitive world. This industry goes on changing their trends which help in attracting modern customers. The theory in response to trend and history of this sector leads to satisfy world events. The history reviews that the food sector is changing and developing over decades by the help of this theory.Moreover this failed in understanding their modern trends reviews that they work in respect to satisfy the needs and requirement of customer's in Australian market. Trade Theory: This model reflects in Comparative Advantage Trade Theory and Competitiveness/ Competitive Advantages theory which helps in understanding the history and trend of food industry.ThismodelshowstheirlongtermexistenceinAustralianmarket.Despiteof competitiveness, food industry's are capable in performing their services efficiently in the global world. Moreover, there are various agencies like Domino's, Mc Donald's etc who serves online goods to the customers (Curran, 2015). This theory has also helped in introducing the system of tracking which helps the customer's to know the status of their food that they have ordered online. In bringing innovations and the betterment in food management and in market, to meet the potential customers is the main thing. Every industry'sdecorate their food with various flavours and make it colourful. As to achieve their goals and objectives in response to Comparative and Competitive advantage in food industry this trade theory helps for the same. This also results in developing the profitability ratio in the competitive world. New Trade theory focuses in achievement of the economic value which has to be improved at the initial stage itself. One of the negative point of this model that it does not makes resources available to customers and in addition to this it does not helps in capturing the economy at high level. Further, in terms
of industrial trend and history is not known by Trade theory by Domino's. Lastly, they adopted Global Value Chain theory for expansion of business. Global Value Chain Theory: In addition to this theory, there is a wide chain of various food industry's in Australia in terms of networking huge stores and sales (Lasserre, 2017). The models helps to show their overall consumption which is relevantly achieved by food industry. Moreover, they relate to this theory as food industry has criticized their products according to customer's taste and relatively the prices have been lowered. GVC helps in knowing the strategy of this sector which is made to expand their business. Moreover, this model shows about it's history in terms of the international production (Antras, 2015). The current trends of its market is that, the industry serves food with different offers and discounts on it. This has enhanced its demand and status of industry in the Australian market. Analytical power:In context to theGlobal Value Chain theory, it's strengths and weakness is discussed in food industry like Domino's, Mc' Donalds, Starbucks and so on. Strengths:Global Value Chain is a main concept of analysing internal activities offood industry like Domino's. Further, this theory helps in existing for long term with competitive advantage in Australian market. the main strength of GVC theory lies in adding value to five main activities in industry are: Service Outgoing logistics Sales and marketing Operational activities Inbound supply Weakness:Global Value Chain reflects it's weakness by not linking all the above activities together while performingin industry like Domino's, Starbucks, Mc' Donalds and many more. This theory has a disadvantage of losing the main vision and objectives of company which lacks in expansion of Domino's. Historical context of the theory's development Designing the food and delivering to the customer's on appropriate time is the main operations in the industry which is developed with the help oftheory.Moreover, National
Competitive Advantage- Porter's Diamond theory helps indeveloping various strategies to expand the food business. They strategies in providing goods that satisfies the needs and requirement of the customer's (Mytelka, 2018). Their mainhistorical context which is developed widely reflects that they are transparent in their services which helps in attracting the customer's. Trade Theory reflects the overall investment from other individual's and government belongs to the advanced factors in food industry's.Their products and services are served to the customer's on time in the market which results in the profitability of the firm.In maintaining the system of production and delivering food industry stands at top position.It's history reveal that they had also launched their own website through which people can order food via online (Medeiros and Trebat, 2017).They are more focused and has the strategy of widening the chain of supplier's in different areas.Global Value Chainshows the rapid expansion of the food industry as it is a basic thing to survive and increases it's demand in the market.Moreover, in exploring their food products, they also operates in bringing new techniques of delivering food which is developed with the contribution of three theories.Lastly the Global Value Chain theory is highly helpful in reducing delivery costs of every food items. Thisis performed to increases the variety of food that is served to the customer's globally. The trade in the industrial history also focuses to improve the quality by not reducing the quantity of food items (Chen and Kamal, 2016). CONCLUSION From the above research, it is analysed that in the global world food industry's has grown a wide chain all over the world. In addition to this, it is identified that this industry is capable to exists for long term with the competitive pressures. Further, it can be concluded from various models that Global value Chain theory is effective in food industry which helps in increasing the profitability of the company. Moreover, it is analysed that this theory helps in knowing the availability of production factors instead of upgrading the products. In addition to this, it can be identified that the marketing orientation reflectssuccessfulness of food items. It can also be concluded that it's main strength is to meet the needs and requirements of the customer's.The main weakness of GVC theory which is analysed is that, it fails on focusing the main aims and objectives of company like Domino's, Mc' Donald etc.Lastly, it can be analysed that their main strategy is widening the chain of supplier's in food industry at different areas.
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RECOMMENDATIONS Food industry's are at the top most company, if reduces the cost which makes affordable to every customers and moreover it helps in increasing the customer's ratio. Further, if skill of labourers are improved then they can provide food items in creative and advanced way. They should maintain the taste and quality which helps in expanding the products. One more recommendation is to increase the advertising and promotional activities through Global Value Chain theory. Factor condition-It is recommended to company that they are using diamond factor model and especially also helping in recognising and using factor conditions like that of quality of skilled labour and raw materials. In company like that of Domino’s where raw material is of very much importance as food is made up of various material including vegetables and other things. So it is required that company is considering all condition of factor while they are producing food items so that they are able to grow into international and global markets. Other that this they must be considering the quality of food products which they are providing to their customers and international clients. Global Value Chain- It is also recommended that GVC must also be considered by Domino’s which would be helping them to deliver their food products on faster and easier bases. As Domino’s is working on international level so it is required that their impact on value chain or providingcustomerswithbestqualityofproductisrequired.Itwillincludedesigning, marketing,distributionandbrandingofcompanywhichcouldbehinderingorfostering exporting into various exporting conditions as MNC are having their majority of interest in transferring the core standard values.
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