Development of International Business Essay Example | Topics and Well Written Essays - 1250 words

Development of International Business - Essay Example Also known as the Global Value Chain (GVC), it is a sophisticated model that shows how a firm retrieves raw materials, imbibes value to them through different processes and techniques and sell the final goods to consumers. There is slight distinction between GCC and GVC. GCC focuses on effective role of powerful retailers and branded merchandisers and GVC provides approaches to expand firm level research on the dynamics and strategies of global industries. Dicken (2015) observed that the Global Production Network (GPN) associates concentrated diffusion of the value chains beyond firms and nations with the process of accumulation of stratified layers of participants of the network. It is also known as Value Network, Input- Output Matrix. It is basically a collection of two or more value chains in which at least one network linkage is shared. According to Ernest and Kim (2001), the chief firm or flagships can be of two types; the first type of flagships constitutes the part of brand leaders that permits suppliers to be self-reliant but demand powerful performance from them. The second type consists of contract manufacturers which built their own production channels and create unified supply chain which are accessible to brand leaders. A GPN lead by firms can participate in different value chains. Hence, a global value chain can have two or more production networks. Solectron, a renowned international electronics manufacturing company, i s an example of GPN (Fleischmann and Koberstein, 2014). There is a wide difference in the terms of the two concepts. ‘Chain’ identifies the vertical arrangement of acts that leads to maintenance, delivery and consumption of a distinct goods or services. ‘Network’, on the other hand, designs both the horizontal and vertical linkages between economics factors, i.e., identifying the common economics factors in the value chains which are effective. Gereffi and Korzeniewicz (1994)