Business Internationalization in the Information Age Report Analysis

This report provides a comprehensive analysis of managing business in a global environment, focusing on business internationalization models and the impact of digitalization. It critically discusses the suitability of Dunning’s OLI model and Johanson & Vahlne’s Business Network Internationalization Process Model for explaining business internationalization in the information age. The report explores how digitalization and the platform economy are reshaping the business ecosystem of MSMEs in developing countries, examining the opportunities, threats, and required capabilities. Furthermore, it critically assesses the Digital Silk Road's likely impact on the international business landscape, considering its potential to promote equitable sharing of gains from digitalization. The analysis incorporates relevant examples and references to support the arguments, providing a detailed overview of the challenges and opportunities in the evolving global business environment.

MANAGING BUSINESS IN
GLOBAL ENVIRONMENT
MANAGING BUSINESS IN GLOBAL ENVIRONMENT 1 | P a g e
2020
sTUDENT DETAILS
[Company name] | [Company address]

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 2 | P a g e
Executive Summary
The business organisations are required to effectively analyse the internal and external
business environment to ensure the success of the business organisation. Dunning’s OLI
model and Johanson and Vahle internationalisation model effectively helps the organisation
in analysing the business environment and ensure success after establishing business within
the nation. The business organisations are required to effectively analyse the available
information and implement necessary decisions within the organisation so that the business
can compete within the global environment.
The digitalisation of the economy and the introduction of the platform economy has
promoted the growth of the digitalization of the business at a global level. The MSMEs are
require to effectively implement the digitalisation within the organisation, as it will result in
improving its productivity along with improving the effectiveness of the organisation. The
Digital Road Initiative is an effective platform that is focused on digitalization of the world
economy and to support the under-developed or developing countries to effective implement
the emerging trends within their business sector so that they can contribute towards the global
economic development.

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 3 | P a g e
Table of Contents
1. Introduction............................................................................................................................3
2. Business Internationalization in Information Age.................................................................3
3. Digitalization and the Platform Economy..............................................................................5
4. Digital Silk Road....................................................................................................................7
5. Conclusion..............................................................................................................................8
6. References............................................................................................................................10

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 4 | P a g e
1. Introduction
The business organisations in the information age are shifting from using the traditional
methods to conduct business towards adopting digitalised platforms for sales and promotional
activities. The MSMEs are the major part that contributes towards the development of the
nation’s economy; therefore, it is required that the MSME sector is being developed and the
government focus on promoting the use of digitalised platforms to improve the business
efficiency and to contribute towards nation’s economic growth. The sector involves medium
and small enterprises that operate locally within a region or a location, therefore there are
certain challenges as well as opportunities that they face while shifting towards a digital
platform.
The report focuses on analysing the different models including the OLI model and the
business internationalization model in the information age and analysing the business
opportunities and threat that the MSME sector faces while adopting a digital platform for the
development of the organisation. Also, the report analyses the impact of the Digital Silk Road
initiative towards the development of the digitalized economy and the digitalisation of
business organisations operating within the nations.
2. Business Internationalization in Information Age
Dunning’s OLI theory is focused on analysing the Multinational Enterprise in the
international business. The theory provides an effective framework for understanding the
extent to which an organisation can deal within the international business environment. The
OLI theory is based on three variables Ownership (O), Location (L), and Internalization (I). It
explains that the firm having ownership advantage will improve its interest in engaging in
production activities within the nation, the location factor analyses that whether the
organisation has any comparative advantage of operating within the nation and the third
variable is the internalization factor which explains whether the firm has the benefit of
producing the products and services by using in-house facility or should remain dependent of
the third party contractor (Sharmiladevi, 2017). The theory is given by Dunning effectively
analyses whether the market is beneficial for the multinational organisation or not.
Alcácer et al.’s (2016) explain that the international business environment is changing and
just focusing on the internal strengths or factors of the organisation is not enough. In the
developing information age, the organisation requires to develop a network through which it

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 5 | P a g e
would be able to extract information about the operations within the host country. The author
defines that the organisations have their FSA’s (Firm-Specific Advantages), and they require
to extract the CSA’s (Country Specific Advantages), through an agent or the firms subsidiary
located within the host country, so that the market advantages within the host country can be
identified and the organisation can effectively utilise its ownership and location factors to
effectively evaluate the information from the diverse sources and can create a new value that
would help the organisation in improving its business operations within the host country
(Alcácer, et al., 2016).
Analysing of the information from diverse sources also helps the organisation in analysing
the interconnectedness of the locations elsewhere in the world, so that the firm can focus
upon its expansion within the respective related locations. The OLI theory of Dunning
effectively analyses the role of ownership, leadership and internalization while expanding the
business internationally. The ownership factor helps in incorporating the organisational
capabilities to identify and evaluate new information within the business environment and
can be put to best use. The location factor of an organisation effectively analyses the future
scope for expansion through interconnectedness between the locations (Wu & Agarwal,
2015). The author analyses that the Dunning’s internalisation factor can help the organisation
in identifying the overall coordination between various elements of the global supply chain
and the market hierarchical structures, and can develop inter-organisational relationships and
networks within the international business environment.
The Uppsala Model of establishing an organisation within the foreign nation is given by
Johanson & Vahlne. The model represents that the internationalization of organisations is a
process that involves multiple stages and they are required to be followed as per the set
sequence. The model is based on the fact that, the organisation can achieve operational
effectiveness in the foreign nation through the experience gained while conducting business
operations within the nation. The process begins with the export of goods and service within
the foreign nation, then replacement of exports to sale through agents, and then establishing
an effective and loyal customer base and then move onto setting up of production plant
within the nation. Johanson and Vahle explain that international expansion can be done on
personal experience not based on the industry factsheets (Vahlne & Johanson, 2013).
Alcácer et al.’s (2016) explain that with the rise of new location advantages and information
and communication technology (ICTs) within the international business environment, the
business process and the global value chain has led to adapting various changes. As the

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 6 | P a g e
organisations are more focused on developing intra-and inter-firm long distance. The
information and digitalised age have made it important for the organisations to effectively
focus upon the diverse source for information, as the ICTs has led to maintaining
connectivity between different fields of information and its utilisation within the global value
chain (Alcácer, et al., 2016).
The business internationalisation process model defined by Johanson & Vahlne’s (2009), is
effective while expanding the business operations as it represents a new and modern
perspective of internationalization of the firm. As experiencing the international business
environment before expanding business within the host country is important to ensure the
success of the organisation. The concept is required to implement the concept of the
information and communication technologies while analysing the business environment as
the modern business requires the implementation of information received from different
sources to improve the business effectiveness (Forsgren, 2016).
3. Digitalization and the Platform Economy
The digitalization of business ecosystem is expanding is changing the way the business
activities are conducted within the MSME industry. The implementation of the digitalisation
within the MSME sector has resulted in an increase in profitability and the organisational
effectiveness along with improved customer engagement. Digitalization of the business
sector has provided the business entrepreneurs with an opportunity to expand their business
beyond the national boundaries through the online digital platforms (Rachinger, et al., 2019).
The platform economy is a medium through which the business organisations effectively get
their business digitalised. The organisations are creating an online platform to remain
competitive within the industry and to provide the customer with a better and improved
service experience (Kenney & Zysman, 2016).
Traditionally, the business organisations were focused on setting up of offline stores and use
of print media and televisions as a medium for the advertisements of the products as well as
to promote the business brand name. With the emergence of the digital platforms within the
industry, the business activities have changed entirely, as such platforms focus on linking the
customers with the suppliers or the manufacturers using online platform, and the
organisations make use of the digital platforms such as social media and the advertising
channels to promote their products and to attract the customers (Zhaoa, et al., 2019). The
business model of MSME has changed from identifying the customer requirements and

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 7 | P a g e
trends in the local market to catering the requirements of the customers globally through
online platforms.
Operating business within the digital ecosystem is beneficial for the organisation as it
provides growth opportunities for the business organisation but also possess certain threats
for the organisation. The digitalisation and the platform economy have resulted in effectively
engaging the customers using various AI-based tools and other innovative tools and
techniques that help the entrepreneurs to analyse its customer requirements and provide them
with the required products, and can improve their customer base (Accenture, 2016). On the
other hand, MSMEs, who want to enter in the digital ecosystem find it difficult to analyse the
digital marketing trend and to effective implement the tools to analyse the interest and
requirements of customers globally, due to which they are not able to compete with the
international firms at the digital platforms (ASEAN, 2012).
The digitalised platforms require that the organisations focus on product innovations within
the organisation, as the customers catered by the organisations are not based on a location or
a nation, therefore, it is required that the products and services being offered are innovative
and can meet the customer's requirements globally. MSMEs have a benefit of the no-cost
transformation of their business enterprise as shifting the business from an offline platform to
a digital platform does not require capital investment, they just need to set up an online
website or register on a service provider portal to start doing business online (Subala &
Princess, 2018).
The MSMEs can make the use of social media platforms and other digital tools to promote
their products online and to expand their business operations. As adopting a source of digital
media for the promotion of products and service is more convenient and effective as
compared to the offline media sources that are used for promotional activities. Therefore,
operating business on a digital platform provides the MSMEs with an opportunity of reducing
its operating expenses and results in improving the business performance.
Apart from the above-mentioned opportunities or the effectiveness to the MSME sector, the
major issue faced by the organisations is the lack of knowledge within the sector as the
government is focusing on promoting the use of digital platform to expand the business
activities, but the business owners still consider it a complex platform to develop and expand
the business activities and still rely on traditional methods for conducting the business
activities (Aswathy & Somasundaram, 2019).

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 8 | P a g e
4. Digital Silk Road
The Silk Road initiative was formed with the aim of investing within the infrastructural
projects including the railways, power grids in the west, east and central Asia, as well as in
Europe and Africa. The Silk Road is an initiative of the Chinese government that is also
known as China’s Belt and Road Initiative and involves a trillion-dollar investment to
improve and enhance the innovation-driven digital economy in the partner countries also
known as BRI countries. Developing of Digital Silk road will play a significant role in
developing infrastructure within the developing partner nations and will help the countries to
be competitive in the digital world (Fung, et al., 2018).
Also, Digital Silk road aims to bring effective and advanced IT infrastructure and advanced
technologies within the nation. As such IT infrastructure and technological advancement will
help the nation in transforming their business that is operating on traditional methods of being
the digitally advanced organisations (Shen, 2018). Also, when the MSMEs of such
developing partner nations will be transformed globally, then the Silk road developed will be
able to provide them with the smart cross-border logistics systems, and will effectively
improve the organisation's effectiveness and the nation’s economic status in which they are
operating.
Also, the Digital Silk Road promotes sustainable development using big data to solve
environmental problems. In the digital transforming age of the organisational sector, Digital
Silk Road will have a significant effect on the development of the economy, and the
technological emergence at a global level. Digital Technologies can greatly influence global
economic development, as through policy development at both national level as well as the
international level can influence the future economic conditions (Wenyan, 2018). The
developing countries can implement the technologies within their nation so that they can
focus on the R&D and innovations within the nation so that they can compete within the
global environment with the developed countries and can improve their status (Heeks &
Stanforth, 2015).
The digitalised platforms can provide the MSMEs with the opportunities of exporting the
goods and services and to reach beyond the small domestic market and to boost their sales
effectively. As the emerging digital age can transform the economic condition at a global
level and influence how the activities are being conducted globally. It has helped to develop
the MSMEs a digital transformation of the traditional industries. The governments are

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 9 | P a g e
focused on taking initiatives to promote the digitalization of the nation and to reduce the
digital gap and narrowing inequalities within the nation. The Digital Silk Road has resulted in
providing internet access to more than 3 billion people worldwide, which has reduced the
digital gap within society (Huadong, 2018).
Digitalization has contributed towards improved productivity, improved the knowledge
sharing at a global knowledge, provided an effective production process through the
implementation of the innovative technologies. Also, the digitalisation has contributed
towards the development of society by creating jobs and reducing the inequalities within the
society (Loebbecke & Picot, 2015). With increasing digitalisation, the people are becoming
more aware within the societies and are conducting activities that contribute towards the
nation’s economic development, the expenditure on the education and skill development has
also increased resulting in generated an effective workforce within the economy (Dufva &
Dufva, 2018).
Implementing the innovative technologies has reduced the cost of the production, and
improved quality of products are being delivered. Improvement in educational and training
patterns has resulted in reduced technological gaps and improved skill sets. Digitalization has
resulted in achieving a combined value of more than $100 million of the platform companies
around the world. 65% of the organisations are focusing on adapting digital advertisement as
a source for advertisements. The global digital economy has raised to 15.5% of the global
GDP. The nations are required to focus on promoting the digitalization to improve the
statistics as to succeed in the competitive economy digitalization is required to be adopted
(UNCTAD, 2019).
5. Conclusion
The industry at the global level is moving from adopting the traditional methods for trading
to the digitalization of the economy. Therefore, it is required that the organisation focus on
adapting effective tools and techniques to expand their business operations at the
international level. They are required to effectively analyse the international business
environment and extract the required information from different sources so that they can
effectively understand the factors that would influence their business in the global
environment and can work accordingly. The MSMEs are being an important aspect in the
development of the nation’s economy, is required to be shifted from traditional methods to
being digitalized through a various platform available.

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 10 | P a g e
The Digital Silk Road an initiative by the Chinese government is an influencing factor in the
digitalization of the world economy. The initiative is aimed to develop technological
advancements within the developing organisations and to improve their economic status so
that they can contribute towards improving the global economic condition and can compete
within the competitive and global world. Digitalisation has resulted in improved product
quality for the customers, improved productivity and reduced cost of production for the
manufacturers through implementing improved and advanced technologies in the
manufacturing process. The nation’s government is required to focus on the digitalization
within the nation.

MANAGING BUSINESS IN GLOBAL ENVIRONMENT 11 | P a g e
6. References
Accenture, 2016. Five Ways to Win with Digital Platforms. [Online]
Available at: https://www.accenture.com/us-en/_acnmedia/pdf-29/accenture-five-ways-to-
win-with-digital-platforms-full-report.pdf
[Accessed 22 January 2020].
Alcácer, J., Cantwell, J. & Piscitello, L., 2016. Internationalization in the information age: A
new era for places, firms, and international business networks?. Journal of International
Business Studies, 47(5), p. 499–512.
ASEAN, 2012. Study on MSMEs Participation in the Digital Economy in ASEAN. [Online]
Available at: https://asean.org/storage/2012/05/Study-on-MSME-Participation-in-the-Digital-
Economy-in-ASEAN.pdf
[Accessed 22 January 2020].
Aswathy, P. & Somasundaram, M., 2019. Unlock Your Business Ideas Through Msmes:
Initiatives And Opportunities. Infokara Research, 8(12), pp. 389-400.
Dufva, T. & Dufva, M., 2018. Grasping the future of the digital society. Futures, pp. 1-12.
Forsgren, M., 2016. A note on the revisited Uppsala internationalization process model –
The implications of business networks and entrepreneurship. [Online]
Available at: http://www.diva-portal.org/smash/get/diva2:957477/FULLTEXT01.pdf
[Accessed 20 January 2020].
Fung, K. C., Aminian, N., Fu, X. & Tung, C. Y., 2018. Digital silk road, Silicon Valley and
connectivity. Journal Of Chinese Economic And Business Studies, 16(3), pp. 313-336.
Heeks, R. & Stanforth, C., 2015. Technological change in developing countries: opening the
black box of process using actor–network theory. Development Studies Research, 2(1), pp.