International Business Essay Example | Topics and Well Written Essays - 750 words - 7

International Business - Essay Example These economic activities are vital since they (international trade) significantly lead to the increase in the growth of the gross domestic product (Elms, & Low 2013). This is the primary essential meaning of the GVC at the international and at the global levels. The report of this analysis concentrates on how individual countries benefit from the global value chains. The essay further investigates how the GVC affects the growth. In an essence, the provision of GVC within a country opens the ways of individual companies and organization to trade globally. This goes a long way in contributing to the creation of their value chains; it also gives them the opportunity to hire employees that are more competent. Iit further gives them an advantage of learning from other countries and organizations thereby developing a good culture that leads to individual prosperity and success of companies. Big companies operating under the GVC often have an advantage since they can easily get access to t he market thus having a big market share. This leads to bigger profit margins which allows them to higher technical employees, get access to modern technology, and gain competitive advantage. This is contrary to small countries and companies which survive in the Market. GVC is of little benefit since it exposes them to the competition from the companies that are already established (Gereffi, Humphrey, & Sturgeon 2005). The most competitive employees go to big companies, which are established to pay them (potential employees) as they want. There are various factors on which the dependence of the potential impact of the global value chain is inclined. First is the type and nature of the global value chain. A beneficial value chain is one which provides an opportunity from which countries and industries can learn. Without the provision of the capability of learning, the industries themselves will stagnate and never have the opportunity of advancing. The GVC should also be one, which is elastic; this is to say that the product of goods and services offered and provided by the company within a particular locality should provide opportunity of growth of other products. This gives the opportunity of industrial expansion for other industries and other businesses. According to the World Economic Forum (2013), industries in developed countries like Japan dealing with electronic equipments have had the potential of expansion to deal with other technological things. For instance, phone-manufacturing companies have often expanded to make computers and other visual and electronic devices. This is contrary to industries in other small countries which only specialize in the assembly of these machines. Their capabilities are confined to assembly and not in the manufacture of innovation of various technologies which can enable them to expand to other endeavours. The other factor is the type of business and the environmental factors in the host country and economy. It is importa nt to determine whether there is an environment friendly to industrial learning, and the skilful management of the firms. The firms must also be willing to invest in developing new skill by investing in the workforce (Koopman, Powers, Wang, & Wei 2011). This is done by continuous and ongoing trainings in a firm. It is also important to note that the benefit of the global value chain in a country is determined by whether local firms have the capability of competing in their local countries. Local competition is the stamina that can determine