Business management strategies of multinational corporations operating in different markets

The Global Competitiveness Report (2019) made by Klaus Schwab, evaluates Australia as the 16th country in the list. The macroeconomic stability score is 100, which makes this country competitive. Moreover, the financial system and health systems are also strengths (85.9 and 94.9 points, respectively). Business dynamism dimension has a 75.3 score, which is also a positive feature for the country economy. Besides that, Doing Business (2020) places Australia in the 14th place, grading the performance with 81.2 points; thus, the country has well-developed institutions and regulations to open a new business there. Furthermore, what is also crucial - the level of corruption. The corruption index in 2019 was 77/100, placing Australia on the 12th place out of 180. This data shows that Australia has meagre rates of corruption.

Another essential feature is the legislation towards the wine production sector. The wine industry in Australia is subject to Commonwealth rules and regulations while having its acts, such as «Wine Australia Act 2013» and «Wine Australia Regulations 2018». These acts regulate the growth and harvesting of the grapes, the licensing, the exporting rules, the quality of production. There is an authority which regulates the food quality in Australia. The Standard 2.7.4 deals with wine and wine product.

The Australian government has introduced several grants such as Cellar Door Grant which could be given to wine producers to promote the growth of their products and also to encourage foreign investment in the country. If the requirements are met the amount from AU$1.00 to AU$100000 could be granted thus supporting the producer. Another grant which is introduced by the Australian government deals with wine export. The main aim of this grant is to facilitate the export of Australian wine to other regions of the world. Such financial support (up to AU$25000) is provided to small and medium wine producers (with a turnover of less than AU$20 million).

Some years later, another country was chosen- highly-developed, free-market-oriented New Zealand. Cloudy Bay initially acquired by the same founder as in Australia expanded the production to New Zealand in 1985. This location was chosen due to the close location to Australia. Moreover, many legal regulations are the same for both countries. At that time this vineyard was the only one in the Marlborough region, and now it has developed to the most successful one, contributing to the worldwide fame of New Zealand. Having this Maison in its portfolio, LVMH holds a unique capability of being able to gain revenues from the most famous wine produced in that region and thus outperform the competitors who have a desire to operate in New Zealand.

Apart from excellent weather conditions, the institutional frameworks of the country are well established, which allows a company to open a new venture easily. The GDP in 2018 was $205 billion. It is a high-income country, which belongs to East Asia and Pacific region. According to the World Bank (2019), -exports account for 30% of GDP. The economy of New Zealand has experienced an expand since 2010, relating to agriculture, manufacturing and geothermal energy. Variety of agricultural products from wool to wine are made in New Zealand and exported to other parts of the world, and the main trading partners are United States, Australia, China and Japan.

What is more, the IMF expects 2.7% of GDP growth in 2020. The inflation rate in 2019, according to the global competitiveness report was 1.8%. These show that the economy of New Zealand is stable and thus investing in the country is less risky.

The perfect business climate also is proved in various rankings. According to Doing Business report (2020), New Zealand holds the 1st place in the ranking with the score 86.8, which means that it is significantly accessible to a run an enterprise there and regulatory system is better than anywhere else among 190 countries. The Global Competitiveness Report (2019) places New Zealand to the 19th place. It has scored 100 in the dimension of macro-economic stability, 79 in the dimension dealing with institutions and 78 in the business dynamism (includes costs of starting a new business, the time required, recovery rate as well as factors of entrepreneurial culture). The market size (54) is lower than the average in this group, and the infrastructure is also slightly behind the group average (76).

The quality of produced alcoholic beverages is subject to government regulations. There is a unique Code (Australia New Zealand Food Standards Code) that regulates the production, the sales and imports of alcohol production. These drinks are divided into several categories: spirits, wine, beer and other alcoholic products. These three categories also divide into smaller sub-groups. Since the LVMH has a wine-producing house in New Zealand, the main focus will be on this group.

The category «wine» subdivides into wine (having less than 15% alcohol per volume and having more than 15% alcohol per volume); wine product; fruit or vegetable wine (also more or less than 15% alc/vol) and fruit or vegetable wine product. Figure 6. Categories of wine in New Zealand expresses this classification.

Apart from perfect conditions for the production of wine due to the terror specifics, New Zealand itself is a profitable distribution market. The consumption of pure alcohol per capita in New Zealand was 10.7 liters in 2016, states the World Health Organization. The distribution between the most popular drinks is quite equal. Beer accounted for 38%, wine- for 33% and spirits- for 29%. However, in the group of drinkers' males consumed 20.2 liters of pure alcohol and females consumed 7.1 liters. These figures show that the consumption rates are high, and thus the demand for alcoholic beverages is potentially high.

Later on, the Asian market was explorer further by acquiring vineyards in China. In 2013 two Maisons were established there. One is Ao Yun, exceptional location in the Himalayas. The range of attitudes there and temperatures close to ones in Bordeaux enables to create high-quality wines. Moreover, the soil in that region was harvested for many centuries, and now the group preserves the winemaking techniques done by hand. Another Maison - Chandon China was created in the Northern part of China, which is renowned for wine growing. The particular wine grapes used for sparkling wines could be grown there; thus, the LVMH have chosen Ningis Hui Autonomous Region for the branch of Moлt&Chandon. In this Maison, the same techniques as in Champagne region are used for the sparkling wine production. What is more, this Chandon produced the 1st sparkling wine in accordance with international standards.

In terms of economic development, China is also the desired one for foreign investment due to many factors. China is the fastest-growing economy since the reforms of 1978. Now it is the second world's economy, according to World Bank (2019). Despite this fact, one-quarter of the population still live below the poverty line. China is the largest manufacturer in the world, and the market size is also significant. The GDP in 2018 was $13608 trillion, which is 11.72% of the world economy. The OECD (2019) projects the GDP growth rate at 1.63% in 2020. The annual inflation growth rate is 5.4%.

China is the only country among the global value chain of LVMH having socialist republic with the Communist Party of China as the main party of the country, which controls the country at all levels. However, this fact does not affect the economic development of the country and its success in the international market.

It is an upper-middle-income group, which belongs to East Asia and Pacific Region

The corruption index in 2019 was 41/100, which is 80th place around the globe. China holds the 31st place in the Doing Business (2020) earning 77.9 points, thus being a country with an excellent regulatory system to create a new business. In the Global Competitiveness Report (2019), China ranks 28th place, being the most efficient country among the BRICS. To the strengths of the country belong the market size (score 100); macro-economic stability (score 98.8), infrastructure (score 77.9). However, there is also room for improvement in several dimensions; one of those is the institutional framework, which has a score of 56.8 only.

As everywhere, China has restrictions on production, distribution and advertising of alcohol. There are several laws, dealing with the production, advertising and distribution of alcohol beverages such as Product Quality Law, Food Safety Law, Advertisement law, just to mention a few. Since 1984 China uses specific alcohol taxes on grain-produced beverages. That is a 20% tax rate for grain and for potato produced beverage. Beer is subject to either 220Yuan or 250Yuan/ton. Rice wine tax is 240 Yuan/ton. Each bottle/package, which contains alcohol product in it should have a label, which specifies the concentration of the alcohol per volume and warning stickers such as «Excessive drinking is harmful to your health».

Despite many regulatory procedures dealing with the production of alcoholic beverages, this location provides unique access to the most extensive distribution market in the world. Also, China is a part of the main agreements in the world such as the United Nation, World Trade Organization, BRICS, G20, Asia-Pacific Economic Cooperation, Shanghai Cooperation Organization and many others. Membership in these organizations also adds up to the desirability of locating the ventures in China as it simplifies the distribution of products for the corporation.

Another country with the second largest population in the world and hence with a vast consumer market is India. Here LVMH developed its branch in 2014. The Nashik region has an ideal combination of climate conditions to produce sparkling wines with a high potential to be the same quality as the Champagnes from France. Similarly, to China, Chandon India was founded by Moлt&Chandon and was the first venture, which produces sparkling wines according to International standards. After the establishment of this venture, LVMH has gained new capability.

Although economic conditions in India are not so advanced as in Europe or the USA, India is considered to be developing economy, which is implementing various policies to liberalize the market. It belongs to the lower-middle-income group and the South Asia region. World Bank (2019) points out that India is «the 3rd largest economy in purchasing parity terms» and now it is striving to become a high-middle income country in the future.

In recent years, the World Bank (2019) argues, India has made a significant improvement in terms of reducing poverty: from 46% to 13.4%. The growth also rises and is expected to upswing to 6.9% in 2020/21. The OECD (2019) projects a GDP growth rate at 6.4%. In 2019 the GDP was $2.972 billion, according to IMF. The inflation rate in 2020 is 6.58%, which is less than the prior month than the inflation rate was 7.59%.

In the global rankings, India holds middle positions in terms of ease of doing business and overall competitiveness. In the Global Competitiveness Report (2019), India has a rank 68 among 141 countries. It has high scores in macro-economic stability (90), market size (93.7) and innovation (50.9-a good score for developing countries). The dimension «institutions» have a score of 57, which is higher than the average in the group. Despite these high scores, India has significantly low scores in ICT adoption (32). The lack of trade openness results in difficulties for the Indian economy. In the Doing Business (2020) India is on the 63rd place with a total of 71 points.

In terms of corruption in the country, the situation is moderate. The score in the corruption perception index in 2019 was 41/100, which is nearly the middle of the scale. So, India tends to be corrupted rather than clean. The place of India is 80th, the same as China has.

The corporate tax rate in 2019 was 30% for Indian companies. The foreign companies or their branches are subject to a 40% tax rate, argues Deloitte (2019). Another study made by Vellappally, Poduthase (2016) argues that taxes on alcohol vary across the states from 30% to 100%.

Due to some religious beliefs, alcohol consumption is limited in some regions. According to Vellappally, Poduthase (2016), after the adaptation of Indian Constitution in 1950 the right to regulate the production, distribution and consumption of alcoholic beverages on the territory of India is in the hands of states authorities by Constitution. The laws on alcohol vary from state to state, in some states such as Bihar, Gujarat, Lakshadweep, Mizoram and Nagaland, alcohol is considered to be illegal, and therefore the distribution and consumption are banned. In some states, for example, Manipur there is a partial ban in specific districts. Other states have different legal age for consumption, which varies from 18 to 25 years.

Also, there are «dry days» when the distribution of alcohol is prohibited in all states. Such days are national festivals, elections, Christmas. Three days in a year the distribution of alcohol always banned- Republic day, Gandhi Jayanti and Independence Day. Other «dry days» are announced each year on July, first.

However, the Chandon India is not affected by these regulations, since it does not lie in the regions with prohibitions. Nonetheless, if the company will decide to expand more in that region, the limitations must be taken into consideration. Also, the distribution could be limited due to legal regulations.

The most recent acquisition made by LVMH was made in Mexico. The Maison in Mexico is unique to the portfolio of LVMH in terms of the type of beverage produced - tequila. It was established recently, in 2017 after the collaboration of LVMH and the Gallardo family. Mexico is renowned for the production of tequila on its territory, and Volcan de mi Terra is located near the real volcano in this area. Ash adds specific elements to the soil, such as iron and basalt and thus became perfect to the growth of blue agave. The combination of extraordinary soil and historical traditions of production produce the possibility to create exceptional tequila on behalf of the conglomerate. Moreover, this location also enlarges the range of the LVMH presence all over the world and thus adds another capability to the portfolio of the corporation.

The production of alcohol in Mexico has a long tradition starting with the drinks created from the agave plant, which is used for the production of tequila and other beverages. After the invasion of Spanish conquerors, the wine was started to be produced as Spanish conquerors imported grapes and realized that Mexico has an ideal combination of soil and climate to grow grapes. Moreover, large amounts of beer are produced in Mexico, making it the 3rd largest beer producer in the world.

The economic profile of the country shows that it could be the desired region for foreign investment. Mexico is an upper-middle-income country in Latin America and the Caribbean region. According to the World Bank (2019), «Mexico is the second-largest economy in Latin America» and 11th in the world. Mexico has a considerable amount of natural resources, and also it develops its manufacturing capacities, which rises the export of the country. World Bank (2019) argues that Mexico has a stable macroeconomy, which provides the possibility to increase foreign investment. For 2018 the World Bank estimates the GDP of Mexico as $1.221 Trillion, with the growth of 2% annually. The inflation rate in 2020, according to Trading Economics is 3.70%, which is more than in the previous months. The prices for beverages reduced, compared to the previous year, but the agricultural goods price increased dramatically (from 1.44% in January 2020 to 7.82% in February).

In the Doing Business (2020) Mexico is on the 60th place with 72.4 points, which is in the middle of the ranking; however, the report argues that it has made obtaining the construction permits more difficult, thus making harder to build a new plant there. In the Global Competitiveness Report (2019), Mexico ranks 48th, having significantly high scores in macro-economic stability (98) and health (82) dimensions. The market size also has a higher score than the group average (81). Business dynamism has a score 66, making a country ahead of its group competitors. However, there are weak dimensions which scored lower than the group average. These are institutions (48) and skills (58). Another vital sign of weak institutions is the corruption rate. In 2019 Mexico scored 29/100 in the corruption perception index, which makes the country pretty corrupted. It is ranked 130 out of 180.

The Mexican Official Standards regulate the production and distribution of alcohol production. The federal corporate income tax (CIT) has a rate of 30%. It applies for Mexican residents and also to foreign residents, which have their permanent enterprises on the territory of Mexico. The PWC (2020) states that enterprises dealing with agricultural, fishing, foster and livestock activities would have a reduction of tax liability of 30%. The withholding tax on foreign enterprises has a rate of 10%. Local authorities do not impose individual taxes on net income on top of the federal taxes. Moreover, there are individual taxes on alcohol beverages which is 16% of value-added tax and Special Tax on Products and Services, which vary depending on the percentage of alcohol in the beverage. They are summarized in Table 2. Taxes on alcoholic beverages in Mexico.

The analysis of the countries profiles shows that the main driver of the establishment of new ventures is the expenditure to the new markets of distribution. The first criterion for choosing a particular country is access to the specific weather and soil conditions, in other words, access to resources. These resources, in turn, provide unique capabilities to the company be it the development of rare vines of enlargement of the variety of beverages. Also, locating production in different regions of the world gives access to new markets and thus makes the process of distribution more efficient. Moreover, different distribution markets allow creating more revenues with a reduction in transportation costs. Furthermore, each country has a set of trade agreements which are beneficial for the conglomerate as it simplifies the distribution process.

The institutional frameworks do vary from country to country, and the conglomerate acts in accordance with local laws and regulations. Some locations are more beneficial in such terms, but the company does not prioritize them. As we have seen the examples of India or Mexico, many institutional frameworks do not operate as efficiently as in other countries, say New Zealand. However, the LVMH decides to establish or acquire ventures there as it will create new capabilities for the company and thus to gain a competitive advantage over other luxury conglomerates.

Despite its extensive presence and lots of capabilities, the worldwide crises would definitely affect the performance of the company. During fluctuations in the world economy and crises caused by various reasons, the corporations have to adapt their strategies in order to tackle such problematic situations. The next chapter will be devoted to the analysis of the performance of LVMH during crises, the risks and opportunities associated with it.

The interactions between business management strategies of multinational corporations and countries' government policies. LVMH Business Management Strategies Risks and Opportunities

Given the fact that LVMH has an extensive and diverse supply chain, the corporation can face various risks as well as opportunities. This section will be devoted to the analysis of risks and opportunities and also the Groups' performance during the crises.

According to the Management Report of the Board of Directors (2020), social, ethical and environmental dimensions remain the critical areas of non-financial concern. Based on the analysis performed by consulting firm Verisk Maplecroft, the Group has identified several risks at the core spheres of operation.

First of all, the risk of making an impact on nature, especially in terms of harming natural resources. An ecological footprint is an important issue for the Group. Thus, all the processes dealing with natural resources and land cultivation should be controlled.

To control the impact made by the Group on nature, it has developed LVMH Initiatives for the Environment. This initiative includes the measures aimed at reducing the ecological impact during the production cycle. Also, it aims to reduce CO2 emissions made by Maisons. Moreover, the distribution channels-stores and retailers should control and reduce their water consumption and waste production.

Human capital plays one of the essential roles in the creation of competitive advantage. However, there are as many risks as opportunities related to the labor force.

Firstly, the healthy and safe conditions of employees are the sphere of concern of the Group. Since the countries vary on labor policies, the involvement of children, the discrimination of any groups at work, forced labor and many other factors associated with the workplace, the Group has to observe and regulate the safety of its employees.

As the interaction between different actors of the economy increases, another risk arises for the Group. The loss of skills and expertise is one of the significant risks identified by the experts of the LVMH. In order to outperform the competitors, the Group has to maintain the pace of development, implement new technologies and also invest in the education of the employees.

Another risk associated with the labor force involved in the production is the fulfilment of their potential. As the organizational structure and human capital, in particular, is one of the keys to success, the corporation has to promote self-development among employees and enhance the rounded personalities at work by introducing various measures such as training, masterclasses and academic partnerships.

The protection of personal data became a real concern in the realm of the 21st century and advance internet technology. The sphere of luxury requires a lot of customers data as the products must be tailored to specific preferences. Thus, each Group is responsible for processing customers data carefully.

Moreover, data leakage could lead not only for the loss of trust between the corporation and the company but also for its usage by competitors. Therefore, the LVMH provides particular guidelines which in turn must be implemented by the Maisons.

Furthermore, operation in various locations could possibly lead to risks associated with some illegal performance of the employees. Such conduct may lead not only to the reputational loss but also to the judicial penalties. To prevent risks related to the financial sphere (bribery, underdeveloped balance sheets), each of the Maison has developed particular policies to detect and prevent prohibited actions.

Since the Group operates with multiple suppliers, several risks are associated with subcontracting companies. All the suppliers must follow the Code of Conduct of the Group. Thus, the LVMH has to enhance the implementation of the shared values by suppliers. These could be done by training and education, directing the suppliers and controlling their performance. The Group has introduced a particular Eco-Vadis Platform to monitor the situation and identify the riskiest parts of the supply chain.

What is more, any turbulent situation be it an economic crisis, global pandemic or natural disease provides risks for enterprises, no matter the size of the venture. However, such cases can also create new opportunities and offer new possibilities for corporations. To survive during times of crisis, companies should rapidly change and adapt their strategy and quickly implement new decisions. This part will be devoted to the spread of COVID-19 across the globe, and the consequences it has caused for the LVMH. The new strategies of the LVMH and Moлt&Hennessy business group will be analyzed to evaluate how the company deals with the emergency and uncertainty.

As the virus has spread all over the globe, the countries have started to implement measures to stop it and prevent the rise of cases of infected people. For multinational corporations, these measures are essential since they rely on the connectedness of their ventures in different parts of the world. Moreover, many countries have initiated the closure of many enterprises and introduced the lockdown for the citizens; thus, many workers forced to be locked at home. If the work cannot be done remotely or it is not closely connected to the basic needs of society, the production will be stopped until the crisis is over.

In terms of Moлt&Hennessy business group, such a crisis would mean that the corporation should revise its strategy and concentrate on the production of other goods rather than wines and spirits. What is more, the distribution channels are also affected by the lockdowns in the countries. Hence people do not have real opportunity to buy goods at the stores, and more importantly, they would devote their savings on other products which deal with the necessities, not the luxurious alcoholic beverages. Taking this all into consideration, the LVMH would lose a considerable amount of revenues and won't be able to produce wines and spirits in the same amounts as they did before the pandemic.

However, with the reduction of the demand for alcoholic beverages, it has increased in the other sphere-hand sanitizers and face masks. Ordinary citizens, as well as hospitals and many other public facilities, have suffered an urgent need for these types of products. This case created an opportunity for the company since it has capabilities to produce sanitizers from pure alcohol and also the corporation has Fashion&Leather business group which can respond for this demand by providing face masks and other necessary clothing for medical stuff and ordinary people. Moreover, the full presence of the facilities of the company allows supporting different regions of the world not facing challenges associated with transportation.

Instead of closing down its ventures, the corporation decided to adopt the strategy and to use its resources and capabilities to respond to the global crisis caused by the pandemic. For the corporation, such a tactic would mean improvement of the image since it has responded quickly to the urgent needs of the governments and also to save some of its production capacity. It all would be beneficial for both parties.

Further on, the particular examples of changes in strategy will be examined to show how the worldwide demand for specific products and the particular assets of the company have given the LVMH the absolute advantage.

The division dealing with alcoholic beverages production has swiftly redesigned the production from liquors to the supplies of pure alcohol which is used for the production of sanitizers and cleaners in hospitals and other public areas.

The outbreak of COVID-19 in the world has dramatically changed the economies of the world. In these turbulent times, the conglomerate also has to adjust its strategies to secure the production. The LVMH website (2020) states that the Wine& Spirits division has mobilized its ventures in order to provide help to those in need.

Hennessy, the Maison in France, donates medical facilities, hand sanitizers and alcohol used for medicinal purposes. Also, the grape producers are protected by increasing the speed of payments, orders and facilitation of cooperation between partners.

In the Champagne region, the Maisons also contribute to combating the disease by providing medical equipment and also supporting medical stuff by providing food supplies to hospitals. These measures were also done in the Australian Chandon, where they produce sanitizers and donate it to employees, their families and send donations to Argentina.

The USA Maison has produced large amounts of pure alcohol, which is used to produce sanitizers and donated it to those in need. Moreover, Moлt&Hennessy gave money to support people who lost their jobs due to the virus.

The Polish venture produces large amounts of alcohol to be used as a sanitizer and moreover, supplies Polish producer of sanitizer with alcohol.

Furthermore, the Group provides help to the most hit regions such as Italy. The brands engaged in these activities do not belong to the Wine&Spirits division; however, the conglomerate as a whole is trying to provide the most support on their behalf. Mostly, the brands dealing with cosmetics reorganized their production in order to make hand sanitizers and donate it to local hospitals and communities. Also, the conglomerate gives money for research, purchase of the medical facilities supplies and promotion of campaigns encouraging people to stay at home. Moreover, some Maisons produce facilities for general people to tackle their needs. In response to the pandemic outbreak, which started in China, LVMH initiated a series of aid campaigns to its employees in China and Wuhan especially. It provided medical supplies as well as monetary donations to Red Cross division and medical employees of the province's hospitals. Moreover, the brands of the Group supported their employees with gifts and necessities and led several online campaigns to celebrate International Women's Day.

The Foundation Louis Vuitton -the museum of art in Paris also had to implement new ways of communicating with the people. To do so, they created online concerts, installations, interviews, exhibitions and tours across the museum in the framework of the initiative #FLVfromhome.

Speaking about general solutions in the conglomerate, the Annual Meeting of Shareholders is postponed due to the pandemic to June 30th. In the letter to shareholders, published in February 2020 the strategy for 2020 summarized as focus on development and innovation, holding the same quality of products. The facts that some production branches and stores were closed due to the pandemic would have an impact on the Group. However, this impact cannot be calculated yet, argues the Management Report for the Group (2020).

All in all, the outbreak of global pandemic has seriously harmed all enterprises and counties economies. Multinational corporations faced many challenges and had to develop new strategies. The LVMH has quickly adopted new tactics and reorganized the production since it has already possessed assets which could be easily transformed. Moreover, its presence on various continents also gave the corporation a competitive advantage, since it is easier to distribute goods within a country or even a continent rather than exporting it across the globe. By helping the governments in terms of supplying them the needed products, the company has also risen its image and gained an advantage over competitors. This evidence shows that in a short-term, the corporation has successfully coped with an extraordinary situation. However, the long-term consequences could not be predicted yet, since the pandemic is not over and the economic challenges after it might be even stronger.

Foundation of Institutional Frameworks Based on the Participation of Countries in the Global Value Chains: Measures for Improving Countries Positions

Global value chains (GVCs) are such value chains where the various stages of production are located in several countries across the world, argues OECD. In the modern world participation of companies in such GVCs is unavoidable as they seek to optimize the production, reduce costs and find the best conditions for innovation and technology. By being involved in the GVCs countries also benefit as such participation enables access to technology, knowledge of production; and thus, improvement of the economic situation in the country. The Figure 7. Global Value Chains shows the stages of value adding and the participation of countries in it.

United Nations Industrial Development Organization (2015) argues that the number of benefits for a particular country varies due to overall business conditions such as economic environment, legal policies, level of labor force education, access to technologies and many other factors. In this light developed countries have an advantage over developing as they already possess all the requirements desired by companies. As there is a lack of needed improvement, maintaining not enough financial and legislative support, developing countries might be seen as the providers of raw materials and natural resources and simple workforce by the companies. The development of the environment in the country will allow to attract foreign companies and participate in higher steps of the value chain. More advanced stages of the value chain such as research and development, technology implementation and innovations will allow not only to gain more revenues but what is, more importantly, to modernize the economy and increase prosperity.

transnational corporation business

Developing countries introduce various measures which aim at the particular steps of production to be involved in the GVCs. Depending on the initial conditions in the country and the type of desired investment measures vary from improving institutions to workforce education, from investment to technology to establishing connections with other countries.

United Nations Industrial Development Organization (2015) outlines multiple goals related to value chain development, which vary from economic performance to environmental problems. A country might desire to increase the income of the citizens or rise level of employment; to foster domestic production or to promote export; to attract more actors to the economy or to develop particular industries of production.

Participation in the GVCs became essential for all actors in the international arena since the competition gradually increased with the rise of globalization and neither corporations nor countries cannot successfully compete without being involved in the global production.

The corporations seek to expand to those countries, which offer the best conditions: from the resources needed for the production to the advanced production technologies, which help further improvement of the product or evolution of it. Thus, the strategies of the companies dedicated to the expansion to other countries and markets are reasonably affected by the governmental policies and business conditions of those countries.

As the GVCs directly affect the economic prosperity of a country, they do compete to attract as many multinational corporations and foreign investment as possible. Furthermore, as the country develops its economic, political and legal frameworks and the overall quality of institutions and labor force skills enhance, this particular country becomes more attractive and demanding for foreign direct investment. And hence can pursue the goal of economic development.

As we can see from the analysis of the countries, even countries within one region, for example, European region, European Union, in particular, have different policies on taxation, on production requirements and economic policies overall. Moreover, the conditions vary from country to the country despite the unification. Thus, a corporation can choose the most suitable country among the ones in the European Union to locate its production. States, in turn, develop various initiatives to foster foreign investment. Depending on a step in a value chain, these initiatives could be different. For instance, if a country wants to attract foreign investment to create more workplaces, then it will emphasize the skills development or reduce cost production. Controversially, if a country has a desire to attract investment in the area of research and development, then some specific subsidies could be allocated to the innovation sector and also to the improvement of higher education, which creates a larger share of the highly skilled labor force. If a country wants to develop a particular sphere, agriculture for example or wine production sector as in the case of Australia, then specific grants would be given to the corporations operating within this specific sphere.

The economic framework could be seen as one of the most important in terms of attracting foreign investment and being involved in the GVCs. States could introduce multiple measures to enhance economic development, such as adding different subsidies or tax reduction policies, lowering construction costs, developing supporting initiatives for newly established ventures. Moreover, the country can create special economic zones. These zones aim to foster economic development and attract foreign investment by introducing specific laws, customs, labor regulations and quotas, which differ from the rest of the country.

Even though the economic dimension is one of the most critical criteria, other aspects also play an enormous role in the formation of the country profile and hence increase or decrease the foreign direct investment flow.

Political measures could also facilitate investment in a particular country. Political risks such as corruption, the threat of war or invasion, unclear bureaucratic procedures, internal conflicts, the unstable government can reduce the attractiveness of a country for foreign investment. All these factors affect the decision-making of a corporation. Thus, if the political risks are high, the corporation would locate its ventures somewhere else. Apart from economic development, countries also should seek to improve political conditions, and they are as important as other dimensions.

Moreover, the legal structure plays a crucial role in the attractiveness of a country. Laws and regulations directly affect the performance of a company and thus should be straightforward and well-developed. Mostly, the legal framework depends on the political one as the ruling elites develop and implement these rules and regulations. Therefore, the importance of the political dimension is once more highlighted. If a government is corrupted, not legitimate or self- proclaimed, the political and legal frameworks would be affected as well as an economic one.

Overall, to hold the place in the GVCs, the country should enhance all of its dimensions, paying specific attention to those particular areas of interest.

Apart from internal frameworks of operation, countries are also involved in the cooperation, communication or even confrontation with other countries. International relations play a crucial role since the ties between countries largely determine the economic and political interaction among them. Having all internal criteria perfectly set is not enough in the modern world: intergovernmental relations are required for successful integration to the global system.

Various trade agreements, political unions and international organizations provide the ability for the companies to operate more efficiently. If a state is a member of international contracts and if it has partnerships with the neighboring countries or with the countries in other regions, then it would be the desired one for the establishment of the branch there. For example, the European Union unites 27 states and thus provides the ability of free movement of goods, services and people.

Also, such agreements as the North American Free Trade Agreement, which united the United States, Mexico and Canada enable the free trade among the members, affect the employment and economic growth. Being a member of such agreement is not only beneficial for the country but also can play a role for the corporations that wish to expand to that region.

Another example is the MERCOSUR agreement which unites the South American market and thus enables trade benefits for the members. Apart from the free trade agreement among member countries (Argentina, Brazil, Paraguay and Uruguay), MERCOSUR also signed up contracts with Israel, Japan, the European Union and Egypt. This example illustrates the importance of international agreements and proves they can be beneficial not only for members.

Asian continent also has its intergovernmental agreements, which facilitate growth and promote prosperity. For example, the Asia-Pacific Trade Agreement (includes China, Bangladesh, India, Republic of Korea, Sri Lanka and Laos People's Democratic Republic) aims to strengthen economic development and enhance trade among members.

Apart from economic prosperity, various agreements could affect legal frameworks of operation. Again, the example of the European Union is relevant, since the European Commission controls some legislative issues. For the corporations' unified legislation, even partial would provide a more flexible framework of operation, and hence that region might be more attractive.

In the highly interconnected world, international organizations do facilitate not only economic growth among members but also constitute an essential factor for multinational corporations expanding abroad.

When it comes to the crisis, being a part of any international organization is beneficial in terms of aid provided by the members. Countries involved in the political or economic unions would help other members to tackle difficult situations. Nowadays, the recent outbreak of pandemic has facilitated the cooperation between countries in terms of medicinal aid. Moreover, the policies of the countries became more social-oriented.

Further on, such collaboration could create the basis for participation in other spheres rather than in medical support. The engagement on many levels could foster, and cooperation on the governmental level will also affect multinational corporations. The advancement of transportation systems would enhance the flow of goods between countries. Moreover, the sphere of technology and communication via the Internet would also develop significantly. The cooperation between the countries is required to implement such advance systems of digital communication. And thus, the policies in the area of technology will be developed. Corporations would benefit from such development as communication with the branches established around the world would become faster and easier.

The operation of the corporations after the pandemic will not operate in the same way. During the epidemic, a significant part of the activities went online. Thus, a company will need to adjust its strategy to succeed in a highly digitalized world. Therefore, the restructuration of the processes is required. Many offline department stores and retail chains will have to transfer to digital. And the governmental support here is essential as it can invest in the establishment of new technologies.

What is more, governmental involvement will be essential in all of the spheres of production and distribution to restore the economies after the crisis. Without substantial investments, grants, subsidies and reformulation of the various policies, for example, tax policies, or credit policies, the corporations would not be able to operate as efficient as before the crisis. Furthermore, to restore the whole economies of the states, the collaboration and cooperation among them are essential. Thus, the multinational agreements and organizations might flourish in the aftermath of the global pandemic.

Conclusion

First of all, many factors such as internal resources and capabilities of a company and external frameworks of countries of operation affect the formulation of the corporation's strategy. As we have seen from the analysis of the LVMH performance, when it comes to the establishment of new ventures abroad, the business management strategy is driven not only by political, economic or legal frameworks and informal institutions of the target country, but also by the assets of a company. The internal resources and capabilities possessed by a company largely determine the strategy. First and foremost, the corporation makes the analysis of possessed resources and capabilities which they create. After that depending on the goals of the corporation the strategy is formulated. And then it is tailored according to the specifics of each location. Hence, the Hypothesis 1 was not approved as high institutional quality is not the only factor while favoring particular country. On the examples of Mexico, Brazil, India it was proved that many other characteristics play role as the conditions of institutions there are far from perfect but there are important pillars which attract the company.

Secondly, the analysis of the value-added chain of the LVMH showed that there are multiple drivers for enlargement of the corporation. From resource seeking motivation to the desire to expand to new distribution markets. The business management strategy varies depending on the location and also on the motivation for expansion. On the example of acquisition in Poland we have seen the desire of the company to diversify its portfolio and add another type of beverage. Thus, the already existent venture was acquired. The Chinese example can be seen as driven by new market acquisition, and hence the ventures there were entirely built up by the Group. If the particular location seems beneficial for the Group, the Group adapts its strategy and operates in the given frameworks of the country. The diversity of locations and also of products enables the corporation to have the competitive advantage even during the time of crisis and worlds fluctuations, which is proved by the current outbreak of the COVID-19. The company can quickly reformulate its strategy to specific needs by having the wide range of capabilities.

Thirdly, the research has showed that the establishment of ventures overseas is beneficial not only for the multinational corporations, but also for countries involved in the Global Value Chains. Participation in such GVCs enables the development of a country. Moreover, it has a direct impact of the economic performance of the country given the spread of globalization which has caused high interconnectedness of different actors and enabled access to resources and competencies all over the world. To attract foreign investment and become a part of a GVCs operating at the most beneficial stages of the value-added chain such as research and development, countries must implement various measures. Hence, the Hypothesis 2 was approved by this analysis: GVCs do influence the creation of government policies in the countries that seek to attract foreign investment. The more developed a country is (in multiple dimensions), the more attractive it will be for foreign investors.

Based on the initial stage of development of a particular country, the recommendations for improving countries positions could be the following:

I. For developed countries:

To compete on a highly competitive markets where a lots of developed countries being able to provide ideal conditions for location the corporations' ventures, the developed countries should aim at enhancing the current frameworks and differ from others in terms of quality and speed.

Measures for improvement:

1. Reduction of taxation rates; tax breaks; specific taxes in particular fields of operation; agreements on avoidance of double taxation

2. Active participation in the international organizations, multilateral agreements and unions

3. Support of innovative initiatives and investment in research and development

4. Facilitation in the spheres of design and advance services which go beyond required

5. Enhancing the speed of creation of the product, its production and delivery

II. For developing countries:

To be involved in the GVCs not only as a provider of raw materials and cheap labor force, the developing countries should aim to improve their inner environment. In turn it would allow to participate in the GVCs at a higher stage of a value-added chain.

Measures for improvement:

1. Investment in education of labor force and also in people who will be the main contributors to the economy later on

2. Investment in the development of advance technology

3. Facilitation of domestic production in various spheres

4. Introduction of subsidies and grants for particular fields of interest

5. Improvement of the quality of institutions, legal systems and bureaucratic systems

Implementation of multiple measures by the countries will enhance the foreign investment. As a country become more and more developed, it gains the ability to attract more valuable steps of the value chain and thus to improve the overall economic situation. If the political, legal and economic conditions in the country enhance, the more corporations will consider this country for enlargement. The more investments a country has, the more it can further invest in internal development. And the more it contributes to the internal development, the probability of foreign investment increases. Thus, it is in a country's primary interest to advance its economic, political and legal environment, as it increases the chances of attracting foreign corporations.

The point of intersection between governments and the corporations will be the following: companies seek the most beneficial terms for the expenditure, and the states seek to attract the most valuable steps of the value-added chain. By analyzing the environment of a country, the corporation decides to locate its branch there, attempting to find the perfect conditions. Each location can have its specific attractors such as access to the broader distribution market, particular benefits in the sphere of operation of the corporation, ideal weather conditions or cultural specifics.

Governments, in turn, support the advancement of all its systems to create these ideal and beneficial conditions for the corporations. By introducing various measures, such as relaxation of laws or becoming members in different international organizations, states increase its attractiveness. The ultimate goal of a country is to develop its economic environment and thus to increase the GDP, living standards and become a more valuable player in the international arena.