1. Bio-fuel Production and Global food Prices
Understanding the link between the production of bio-fuel and the cost of food prices globally is a prerequisite for the success of most food-oriented business organizations across the globe. Various scholars and analysts have attributed the high cost of food commodities to the rapidly rising costs of producing bio-fuel. However, according to a journal article titled ‘Bio-fuel Impact on Food and Crop Prices: Using an Interactive Spreadsheet’, the impact that bio-fuel production has on food prices often differs from one country to another. As such, in order to understand the global impact of bio-fuel on food prices, reviewing and comparing the bio-fuel production scenarios in different countries is the key to understanding how various food markets are affected on a global scale (Baier & Clements, 2010) .Nevertheless, this journal article which was published in the International Journal of business studies concedes that during the period between 2005 and 2008 when food prices globally reached an unprecedented inflation level, several food commodities markets such as sugar and corn in almost all countries cited the high cost of bio-oil production as a major contributing factor for the high prices.
Even though most of the major conclusions in this journal article are based on case studies in Brazil, the implications of some of these conclusions can resonate with any food market globally. For instance, this article states that according to the International Monetary Fund, bio-fuel production in the US accounts for over fifty percent of the factors that have caused the current inflation in food market prices in the country. This percentage is much lower in other countries since different economies have different predisposing factors that have led to the high food prices. In fact, this article alleges that when the impact of bio-fuel production of food prices is calculated on a global scale and not on a country to country basis, bio-fuel’s contribution to high prices is as little as 10%.
Evidently, most of the conclusions offered in this article are debatable. However, the fact that the article deviates from the norm and does not lay all the blame for high food prices on bio-fuel creates an interesting perspective which should be thoroughly explored in order to get an accurate view of how bio-fuel production affects food prices globally.
2. International Strategic Alliances
Most sectors of the economy are becoming increasingly globalised. As such, different businesses are being forced to form and sustain strategic alliances with other foreign/international business in order to remain relevant and profitable. Strategic alliances between different markets or businesses are designed to be mutually beneficial to all constituent parties of the alliance. According to R Shafer’s article ‘Developing Strategic Partnerships’ which was published in the Franchising World Journal, multinational companies are often formed out of a scenario where two or more like-minded firms in different parts of the world form joint ventures that are mutually beneficial.
Shafer’s article explores the most effective mechanisms that can be used to develop strategic alliances and it also discusses the benefits of such alliances. According to Shafer, business firms should ensure that their prospective partners share similar or complementary objectives and goals before forming strategic alliances with them. This improves the chances of the alliance succeeding. Additionally, Shaffer recommends that such firms should have similar products because it is easier to align the unique expertise of each alliance member if the skills are to be used in the production of a similar product (Shafer, 2005). Creation of mutual understanding between members is also mentioned as a precondition for a successful strategic alliance.
One of the benefits of international strategic alliances that is outlined in this journal article is the acquisition of valuable information regarding local markets. This information is obtained from partners whose location and scope of operations is closer to the locals.uch information can be invaluable since the other partners are able to identify suitable buyers, sellers and channels of distribution which they were not privy to before forming the strategic alliance. All in all, Shafer’s article offers an in depth, incisive and thought provocative review of international strategic alliances.
3. FDI and Developing Countries
Foreign Direct Investments (FDI’s) are one of the main sources that developing countries rely on in order to get adequate funding for their development projects. Numerous benefits have been attributed to the provision of FDI’S to developing countries by developed nations. However, a multitude of complex problems have also been attributed to the use of this source of finances. An article by Andrew Mold titled ‘The Fall-out from the Financial Crisis: Implications for FDI to developing countries’ explores these problems as well as the criticisms and shortcomings of FDI as a method of financing development in developing countries. This journal article offers three main criticisms. Firstly, it states that during times of financial crisis in developed countries, the negative impacts of such crisis can be transferred to economically stable developing countries through providing FDI’s to such countries. The article also alleges that multinational companies are likely to transfer the FDI’s they provide from one developing country to another abruptly. Such abrupt moves are likely to cause economic instability instead of benefiting the developing countries. Lastly, Mold’s article states that the effectiveness of FDI’s as a source of financial revenue in developing countries is not as reliable as other options such as taxation and utilization of other domestic resources (Mold, 2008).
4. New Venture Internationalization
Internationalizing new ventures is a current strategy that is used by various economies and companies in their operations. Companies internationalize their new ventures to areas where they are likely to face less competition. In this era of globalization, adopting positive market trends such as new venture internationalization as soon as possible can determine whether or not companies are able to compete effectively on a global scale. While most companies internationalize their new ventures form developed to emerging economies, another trend is emerging whereby new viable ventures that are likely to be successful if they are established in a suitable market environment internationalize from emerging economies to developed economies. An article published in the Ivy Business Journal in 2008, explores this relatively new phenomenon. The article titled ‘What Drives New Ventures to Internationalize from Emerging to Developed Economies?’ reviews the perspectives that have led to the adaptation of this form of internationalization as effective economic strategy (O’Brien, 2008).
One of the perspectives presented by the article is that depending on the level of competitiveness in a certain market sector, new ventures in emerging economies may decide to internationalize to developed nations. If competition is too intense in emerging economies, new ventures are forced to seek out developed economies internationally which are yet to adopt similar ventures which means that competition is lessened. Another interesting perspective offered by this article is that new ventures may decide to internationalize from emerging economies where competition is less intense to developed economies merely because the latter economies offer better technological facilities and incentives which are a prerequisite for the success of any new venture and because such incentives are rarely available in emerging economies, the new internationalization trend continues to flourish. All things considered, this article offers some relatively new ideas in internalization of new ventures .The fact that these ideas are derived for purely secondary research however sheds doubt their practicality in business.
5. Industrial Organization
Even though most organizations today are heavily reliant on information and information systems, there are still quite a number of successful organizations that are industrial in nature. However, the operations of such organizations in this information age are thoroughly compromised by various challenges. In his article which was published in the Eastern economic journal, Myong Hun-Chang outlines some of the challenges such organizations have to deal with. The challenges outlined in the article titled ‘Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries’ are mainly technological in nature.
One of the challenges is that the effectiveness of innovation processes in industrial organizations is hindered because of lack of adequate information systems. In non-industrial organizations, such systems enable companies to have access to the current quality innovation trends and the chances of success of innovation processes are enhanced. Failure in the innovation processes as a result of the information challenge may have dire ramifications on the ability of industrial organizations to attain high turnovers and if the challenge is not well handled, the turbulence caused may lead to a collapse of the company’s other processes as well.
However, it is important to note that in spite of the many challenges that industrial organizations face, this article argues that if the entry strategy the organization used during its establishment was well thought out and proper contingency plans were put in place, surviving the immense challenges is possible (Chang, 2011).
References
Baier, S., & Clements, M. (2010). Bio-fuel Impact on Food and Crop Prices: Using an Interactive Spreadsheet. Journal of International Business Studies , 96 (2), 50-57.
Chang, M.-H. (2011). Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries. Eastern Economic Journal , 37 (1), 51-84.
Mold, A. (2008). The Fal-out from the Financial Crisis: Implications for FDI to Developing Countries. Journal of Business Economics , 86 (4), 1-12.
O’Brien, P. (2008). What Driives New Ventures to Internationalize from Emerging to Developed Economies. Ivy Business Journal , 8 (36), 145-153.
Shafer, R. (2005). Developing Strategic Partnerships. Franchising World Journal , 37 (1), 79-82.
