UNIVERSITI TEKNOLOGI MALAYSIA
AZMAN HASHIM INTERNATIONAL BUSINESS SCHOOL
MBSA 2223
SEMINAR IN GLOBAL BUSINESS STRATEGY
SEMESTER I 2019 /2020 SESSION
LECTURER: PROF MADYA DR. FAUZIAH SHEIKH AHMAD
SUBMISSION DATE: 4TH JANUARY 2020
MAWAR NYUMES MBS181835
A Literature Review of Global Business Strategy in Food and Beverage
Industry
Student Info ABSTRACT
Details: Objectives: To explore on the global business
Mawar Nyumes strategies emphasized by the food and beverage
MBS181035 companies in globalized world.
Semester I Design: Systematic Literature Review
Data Sources: Google Scholar and Mendeley
Keyword: Review Methods: This literature review analyze
Strategy all the relevant findings from selected paper.
Global business Results: 6 papers were included in the literature
Food and beverage review. The themes findings are: firm
management, Human Resource Management,
marketing, innovation and global orientation. This
five element is an important elements in global
business strategy. An addition element that can be
further explore is the use of social responsibility
as part of firm’s strategy. The connection between
social responsibility – marketing – environment
and technology will created a strong value to the
firm to be sustainable and penetrate global market.
Conclusions: Globalisation created both
opportunity and threat to food and beverage
industry. The firm need to have a strong business
strategy to be able to penetrate global market and
ensure their sustainability. Further research need
to be conduct to explore the connection between
social responsibility – marketing – environment
and technology as their business strategy.
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1. INTRODUCTION
Rapid development in communication, technology, trade liberalisation, trade-related
support services and cross-border capital flows cause rapid changes in the global
business environment (Koh, Lee, & Boo, 2009) and the rise of more demanding
consumers have made competitive strategies an important part in global business.
Nowadays, firms not only compete in domestic market but internationally either by
penetration into foreign country or by the invasion of foreign firms into their market.
With a rapid adoption of the Internet, physical boundaries and distance become less
important as firms all over the world are now able to cater for larger markets more
efficiently (Kim, Nam, & Stimpert, 2004). The firms needs to revisit their strategy and
competitiveness among their competitors. Only the firms that have the capability in all
elements of competitive priorities (Singh, Garg, & Deshmukh, 2007) will survive in this
global world. Confronting with more rapid changes in the market than ever before, firms
have no choice, but to adapt to the environment in order to survive and prosper (Gereffi,
2001).
Food and beverages (F&B) industry cannot escape from this globalisation
phenomenon. F&B industry includes manufacturing, packaging and supplying food
product which normally start in domestic market and expand globally. Since F&B
industry is universal to human life and health, this becomes great opportunity for the firm
to expand in global market (Nyang’au, 2016). F&B long term objectives are generally
targeted towards their growth and stability thus the needs to be globally competitive
which should be their top priority. Generic competitive strategies: cost leadership,
differentiation and market focus (Porter, 1991); is not enough so the F&B industry
should adopt the technology and innovation into their strategies .
Many studies have been conducted emphasizing on the global, dynamic aspect of
competitive strategies. Thus, this paper will explores on the global business strategies
emphasised by the F&B companies in globalised world.
2. LITERATURE REVIEWS
2.1 Introduction
Increased competition in the global market makes the competitive strategy topic more
dominant in entrepreneurship, business and education. In fact, strategy and performance
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research could be easily found in a large number of offline and online journals. Many
firms have been implementing different strategies to ensure their sustainability and
penetration into global market (Parnell, 2006). This strategy enables a firm to gain
competitive advantages over its rivals (Porter, 1991).
Researchers have come out with many elements on the competitive strategies for
business. The most prominent competitive strategies are innovation and technology
(Sisco, 2016; Mohd Rosli Associate Professor, 2012; Giacomarra, Crescimanno, Sakka,
& Galati, 2019) while cost leadership, differentiation and market niche as the sources of
competitive advantages (Porter, 1991). Researchers also suggest that the firms includes
cost reduction, innovation and quality enhancement in their strategy to gain domestic and
international competitive advantage (Jönsson & Devonish, 2009).
Five themes have been identified based on the literature findings which can be
divided into two categories: (1) functional areas – (i) firm management, (ii) Human
Resource Management (HRM) and (iii) marketing; (2) internal dynamic capabilities –
(iv) innovation and (v) global orientation.
2.2 Firm Management
It is with no doubt that profit focus was ranked first by the firms as their strategy (Porter,
1991; Sisco, 2016; Mohd Rosli Associate Professor, 2012), as this is in par with their short
term objective. In order to survive in global market, firms also gave high priority to safety
and environmental aspects. Consumer is highly conscious on the safety aspects of product
that they consume thus to be able to penetrate in the market, firms not only need to ensure the
safety of their product or their employees but also the safety of the environment. By
introducing product that is environment friendly, firms gain competitive advantage especially
among environmentalist (Banerjee & Gupta, 2017).
2.3 Marketing
Price setting, marketing and promotion, niche market development, product
diversification and the enhancement of company reputation and branding are part of
marketing competitive strategies (Sisco, 2016). The F&B industry has undergone tremendous
changed to cope with the diversity changes in consumer requirements. In global market, F&B
industry have to invest in multicultural influences and consumer diversification as part of
their business strategy (Vorobyova & Raju, 2017).
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2.4 Human Resource Management
As mention by Mohd Rosli Associate Professor (2012), hiring high-skilled employees is
also part of global business strategy. The human resources with specific skills and
competencies are capable producing new product and doing product innovation which is a
strategy for sustainability in global market (Giacomarra et al., 2019).
2.5 Innovation
High product innovation is the most mention in literature in global business strategy. By
introducing technologies in F&B industry, the improvement on the process and product can
be establish (Mohd Rosli Associate Professor, 2012; Vorobyova & Raju, 2017). The focus on
product and process innovations would enable the firms to be more competitive globally.
Product innovation can generates new price premiums and hence higher revenues while
process innovation pushes the production costs down.
2.6 Global Orientation
Global orientation through the application of the internet (Vorobyova & Raju, 2017) is
the latest strategy that F&B industry should invest for in their business strategy. The Internet
is the centre of today digital world which can transforms the way people seeing things, doing
business and how the global see their product and brand. Through the Internet, many firms
can expand their accessibility throughout the regions and demography thus will have equal
opportunities in the global market.
3. METHODS
3.1 Aims
The aims of this paper is to explore on the global business strategies emphasised by the
F&B companies in globalised world. Which will answer the research question below:
1) What are the global business strategy practice by firm in F&B businesses?
2) What are the competitive strategies emphases by F&B in global business?
3.2 Phenomena of Interest
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Competitive strategies in F&B business should be explore given the significance
presence of this sector in global world. As mention in the Gulfood Global Industry
Outlook Report 2019 (2019), the worldwide consumption of food and beverages will
account for 8.9 % of GDP by 2030. With the rising demand and increase in population,
the global industry of food and beverages may face a competitive market. Global market
force the firms to strengthen their competitive strategies so that they remain relevant in
the marketplace.
3.3 Literature Search Strategy
Secondary data of literature search is being use in this research paper. All the related
study of global business strategy in food and beverages industry is being reviewed.
Various study found from the search engine have been review and analyse to narrow
down the search findings to this specific topic. Relevant study was search through
Google Scholar and Mendeley databases without any restrictions to the search options.
The keywords that been use in the search engine is strategy, global business, food and
beverage thus the need for individualize search review.
3.4 Inclusion and Exclusion Criteria
The literature review findings is multi-disciplinary in which there is no restrictions of
field in which global business strategy is apply and being review. An article is included in
this review if it was related to global business strategy; and food and beverages; and is
written in English. Exclusion criteria in this literature review is those paper that is written
in language other than English.
3.5 Quality Assessment
To ensure the right study is been review, the article was re-read and analyse to ensure that
it meet the review criteria. Information on global business strategy; and food and
beverages is then extracted from the article. Themes from the article is identify which
describe the global business strategy in food and beverage industry. Papers that does not
includes F&B industry in their report is ignored.
3.6 Hypotheses
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There is a set of global business strategy being practice widely in food and beverage
industry.
4. RESULT & DISCUSSION
A total of 20 papers on global business strategy in food and beverage industry was
found from Google Scholar and Mendeley databases. After gross screening of the titles
and abstracts, the related papers was narrow down to 12. Out of that number, further
reading and analyses done and finally only 6 papers have been extracted for the purpose
of this literature review.
The papers were of literature review which review the global business strategy in food
and beverage industry. All papers did mention about firm management, Human Resource
Management, marketing, innovation and global orientation in their research.
Globalization has created a borderless world which not only become an opportunity
but also a threats to the F&B industry. F&B firms can market their product globally with
the use of internet. They have to take this opportunity to create brand awareness among
their potential customer. However, it can becomes a threats since the rival may also use
this internet of things to project their product. Thus, F&B industry must use this as their
top business strategy.
Apart from that, innovation strategy will need to be there in their global business
strategy. Without innovation, the firm will be outdated in their industry be it in terms of
the product or even the product manufacturing up to product packaging and labelling.
Human resource will add value to this innovation, technology and even the use of
internet in global business strategy. Without capable and creative human resource, the
firms cannot go further in global world. The firms needs to invest in their human
resource and retain them.
Business strategy that always be there for the firms to execute would be firm
management and marketing. These two components is a centre piece of the firms and
will lead the company to their short term objective. These two components alone without
the three components - Human Resource Management, innovation and global
orientation; will not ensure the sustainability and transformation of the firms.
A through reading of the literature have raise another point that can be used as global
business strategy. This extra point is the firm social responsibility activities. Few
researcher have make a connection between this social responsibility – marketing –
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environment and technology. By practicing eco-technology in their firms, they created a
different level of marketing and also encourage the technology innovation in their
product and manufacturing.
5. REFERENCE
Banerjee, R., & Gupta, K. (2017). The effects of environmental sustainability and R&D on
corporate risk-taking: International evidence. Energy Economics.
https://doi.org/10.1016/j.eneco.2017.04.016
Gereffi, G. (2001). Global sourcing in the U.S. apparel industry. Journal of Textile and
Apparel, Technology and Management.
Giacomarra, M., Crescimanno, M., Sakka, G., & Galati, A. (2019). Stakeholder engagement
toward value co-creation in the F&B packaging industry. EuroMed Journal of Business.
https://doi.org/10.1108/EMJB-06-2019-0077
Jönsson, C., & Devonish, D. (2009). An exploratory study of competitive strategies among
hotels in a small developing Caribbean state. International Journal of Contemporary
Hospitality Management. https://doi.org/10.1108/09596110910955721
Kim, E., Nam, D. Il, & Stimpert, J. L. (2004). The applicability of Porter’s generic strategies
in the digital age: Assumptions, conjectures, and suggestions. Journal of Management.
https://doi.org/10.1016/j.jm.2003.12.001
Koh, Y., Lee, S., & Boo, S. (2009). Impact of brand recognition and brand reputation on firm
performance: U.S.-based multinational restaurant companies’ perspective. International
Journal of Hospitality Management. https://doi.org/10.1016/j.ijhm.2009.04.002
Mohd Rosli Associate Professor, M. (2012). Competitive Strategy of Malaysian Small and
Medium Enterprises: An Exploratory Investigation. American International Journal of
Contemporary Research, 2(1), 93–105.
Nyang’au, F. O. (2016). Influence of Supply Chain Risk Control Strategies on Performance
of Food and Beverage Manufacturing Firms in Kenya. Quest Journals, 4(3), 1–9.
Parnell, J. A. (2006). Generic strategies after two decades: A reconceptualization of
competitive strategy. Management Decision.
https://doi.org/10.1108/00251740610690667
Porter, M. E. (1991). Towards a dynamic theory of strategy. Strategic Management Journal.
https://doi.org/10.1002/smj.4250121008
Singh, R. K., Garg, S. K., & Deshmukh, S. G. (2007). Strategy development for
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competitiveness: A study on Indian auto component sector. International Journal of
Productivity and Performance Management.
https://doi.org/10.1108/17410400710745315
Sisco, M. (2016). A recipe for success. Flexo, 41(11), 34–37.
Vorobyova, M. K., & Raju, A. P. D. V. (2017). Factors Determining Effectiveness in
Malaysian Small & Medium Enterprises By Implementing Globalization Strategy.
PEOPLE: International Journal of Social Sciences, 3(2), 1456–1469.
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Literature Review Table: A Literature Review of Global Business Strategy in Food and Beverage Industry
Author(s) and Country Study Study Design Study Sample Key Findings Identified
Year Objective(s) Themes
Mohd Rosli Malaysia To explore the An Exploratory 300 potential The SMEs have 3 functional (1)
Associate competitive Investigation respondents in the placed high firm management,
Professor, M. strategy - A self- F&B and T&C emphasis on firm (2) Human
(2012) emphasised by administrat manufacturing management, Resource
SMEs in order to ive industries marketing and Management
cope with global questionna throughout human resource (HRM) and (3)
competition ire Malaysia. A total management; and marketing; 2
- Data of 212 moderate internal dynamic
analysis respondents or emphasis on total capabilities, (1)
was small and medium innovation. On the innovation and (2)
conducted enterprises other hand, low global orientation
using returned the emphasis can be were examined to
mean completed seen in some identify the recent
scores and questionnaires. innovation emphasis of
t-tests. All respondents elements and all Malaysian SMEs
are owner- global orientation on competitive
manager indicators. strategies
Results also show
that the
competitive
strategies between
the F&B and T&C
industries are
significantly
different in
innovation and
global orientation.
Christine Demen- Italy To explore the An Exploratory 378 respondents - Results show that
Meier, François correlation Investigation restaurateurs characteristics
Pageau (2012) between the - A self- such as “academic
characteristics of administrat background”
an entrepreneur’s ive “action logic”
profile and questionna “intention logic”
their strategic ire “relational skills”
actions or and “personal
considerations aptitudes” are
probably more
important than a
1
determinist
approach to
strategy choice
Dr Ian Jenkins, US, UK, To investigate how quantitative 53 restaurants More sensitive to Culture
Professor Robert Caribbean, USA, restaurants are questionnaire sustainable
Bristow, Ralph Switzerland and addressing Global management
Cervera (2012) Wales sustainability. Sustainability practices
(pg 58) Criteria
Partnership
(GSTC
2009)
Zulkefli Abdul Malaysia This study The research Four focus group The study found Service quality
Rahima, Boo Ho explored the design is a interviews (28 that contract customers’
Voonb, Rasidah underlying combination of participants) were manufacturing satisfaction and
Mahdic (2015) dimensions of literature review held using a semi- service quality loyalty
contract and focus group structured guide could be classified
manufacturing interviews. and they into seven
service quality in comprised 12 dimensions;
the business-to- contract Halalness, product
business service manufacturers and development,
context, 16 business tangibles,
2
particularly the customers. reliability,
Food responsiveness,
and Beverage assurance and
(F&B) industry in empathy. The
Malaysia findings provide
empirical
evidence that
service quality is
an industry
specific matter.
Ms Kateryna Malaysia To identifying the offline library
Vorobyova, current issues of research papers,
Assoc. Prof. Dr. Malaysian Small and previous
Valliappan Raju & Medium online studies
(2017) Enterprises from academic
(SMEs) to articles and
globalize to enter literature reviews
into new market, on the subject of
identifying globalization
companies’ Malaysian SMEs
internal and and challenges
3
external barriers, regardless of
identifying gaps of operational,
effective global financial, and
strategy managerial
aspects
Marcella Italy to explore how a A case study primary data were Results reveal a
Giacomarra and food and beverage approach was collected from structured
Maria packaging chosen and personal stakeholder
Crescimanno, company manages applied multiple interviews, and relationship
Georgia Sakka, internal and methods of secondary data management,
Antonino Galati external semi-structured came from according to
(2019) stakeholders to interviews and a internal reports which the
achieve documentation and documents packaging
sustainable review available company acts
innovation on the public through a
outcomes, as well website. stakeholder
as to contribute to engagement
the process to both
spread of acquire and share
sustainability new knowledge
paths along the to address
4
supply chain, on stakeholder
which it operates. pressure.
