CASE STUDY ANSWERS
ASSIGNMENT SOLUTIONS
PROJECT REPORTS AND THESIS
ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM
SMU / SYMBIOSIS / XAVIER / NIRM / PSBM / NSBM / ISM / IGNOU / IICT / ISBS / LPU / ISM&RC/ LPU / NMIMS / ISBS / MANIPAL / GARUDA
MBA -
EMBA - BMS - GDM - MIS -
MIB
DMS - DBM - PGDM - DBM – DBA -
PGDBM
ARAVIND
09901366442 - 09902787224
Examination Paper of International Business Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
International Business Management
Section A: Objective Type (30 marks)
This section consists of multiple choice questions and short answer type questions
Answer all the questions.
Part One carries 1 mark each and Part Two questions carries 5 marks each.
Part One:
Multiple choices:
1. What is the series consideration for strategy implementation?
a. Strategic orientation
b. Location
c. Dimensions
d. Both (a) & (b)
2. The major activity in global marketing is
a. Pricing policies
b. Product lines
c. Market assessment
d. All of the above
3. The third ‘P’ in the international marketing mix is
a. Product
b. Price
c. Promotion
d. Place
4. The European Economic Community was established
a. 1958
b. 1975
c. 1967
d. 1957
5. Environment Protection Act
a. 1986
b. 1967
c. 1990
d. None of the above
6. People’s attitude toward time depend on
a. Language
b. Relationship
c. Culture
Examination Paper of International Business Management
2
IIBM Institute of Business Management
d. All of the above
7. Culture necessitates adaption of
a. Product
b. Price
c. Promotion
d. Place
8. The legal term for brand is
a. Symbol
b. Name
c. Trade mark
d. All of the above
9. FDI flows are often a reflection of rivalry among firms in
a. Global market
b. Indian market
c. International market
d. None of the above
10. ISO certification is
a. Expensive process
b. Elaborate process
c. Evaluative Process
d. Both (a) & (b)
Part Two:
1. What do understand by ‘Inward-oriented Policies’?
2. What is ‘Factor Endowments Theory’?
3. Explain the term ‘Totalitarianism’.
4. Write about ‘Persistent Dumping’.
END OF SECTION A
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
Examination Paper of International Business Management
3
IIBM Institute of Business Management
Caselet 1
THE EU’S LAGGING COMPETITIVENESS
In a report produced for the European Commission, published in November 1998, it was argued that the EU lags behind the USA and Japan on most measures of international competitiveness. Gross domestic product per capita, sometimes used as an indicator of international competitiveness at the country level, was 33 per cent lower in the EU as a whole than in the USA and 13 per cent lower than in Japan. The EU’s poor record in creating employment was singled out for particular criticism. As this appeared to apply across the board in most industrial sectors, it suggested that the EU’s poor performance related to the business environment in general and, in particular, to the inflexibility of Europe’s labour markets for goods and services. A shortage of risk capital for advanced technological development and high cost and inefficiency of Europe’s financial services were also highlighted by the report. For one reason or another, European industries generally lag behind in technology industries. If measured by the number of inventions patented in at least two countries, the USA is well ahead of most European countries, as well as Japan. Despite these shortcomings, the report’s authors focus attention on flexible markets, market liberalisation, and the creation of a competitive business environment rather than on targeted intervention by the EU or national authorities.
1. Is gross domestic product per capita a useful indicator of International competitiveness in the EU?
2. Is it fair to point the blame for the EU’s poor international competitiveness at inflexible labour markets, regulated goods and services markets, and a general lack of competition? What alternative explanations might be suggested?
Caselet 2
PERU
Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina), and covers almost 500,000 square miles (about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow-capped Andes mountains, sparkling grass-covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous Incas, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing, mining, and services. GDP is approximately $115 billion and per capita income in recent years has been around $4,300. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country. One of these potential investors is a large New York based that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner wants to refurbish the fleet and add one more ship. During the 1970s, the Peruvian government nationalised a number of industries and factories and began running them for the profit of the state. In most cases, these state-run ventures became disasters. In the late 1970s, the fishing fleet owner was given back his ships and are getting old and he needs an influx of capital to make repairs and add new technology. As he explained it to the NEW YORK banker: “fishing is no longer just un art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market , you have to have the latest equipment for both locating as well
Examination Paper of International Business Management
4
IIBM Institute of Business Management
as catching and then loading and unloading the fish.”Having reviewed the fleet owner’ operation, the large multinational bank believes that the loan is justified. The financial institution is concerned , however , that the Peruvian government might step in during the next couple of years and again take over the business . If this were to happen, it might take an additional decade, for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the loan could be rapid within seven years. Right now, the bank is deciding on the specific terms of the agreement. Once these have been worked out , either a loan officer will fly down to lima and close the deal or the owner will be asked to come to NEW YORK for the signing. Whichever approach is used, the bank realize that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days.
1. What are some current issues Facing Peru? What is the climate for doing business in Peru today?
2. Would the bank be better off negotiating the loan in New York or in Lima? Why?
END OF SECTION B
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. Imagine that you are the director of a major international lending institution supported by funds from member countries. What one area in newly industrialized and developing economics would be your priority for receiving development aid? Do you suspect that any member country will be politically opposed to aid in this area? Why or Why not?
2. The principle problem in analysing different forms of export financing is the distribution of risks between the exporter and the importer. Analyse the following export financing instruments in this respect:
(a) Letter of Credit
(b) Cash in advance
(c) Draft
(d) Consignment
(e) Open Account
END OF SECTION C
Examination Paper of International Business Management
5
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Global Marketing Management
Section A: Objective Type (30 marks)
This section consists of Mixed Type questions & Short Answer type questions.
Answer all the questions.
Part One questions carries 1 mark each & Part Two questions carries 5 marks each.
Part One:
Multiple Choices:
1. All the ethnocentric orientations are collectively called…………………………………………………………….
2. Presently number of members countries in OECD are
a. 12
b. 20
c. 24
d. 29
3. If the value be ‘a’ , benefit be ‘b’ and the price be ‘c’ then relation between the threes is given by
a. a=b/c
b. a=c/b
c. a=b+c
d. none
4. If the confidence limit be ‘t’ standard deviation be ‘b’ and the error limit be ‘c’ then the sample size will be given by
a. n=t+b/c
b. n=t*b/c
c. n=t*c/b
d. none
5. According to Backer spielvogel and Bates’s global scan the segment content of Achiever is
a. 26
b. 22
c. 13
d. 18
6. CAT stands for ………………………………………………………………………….…
7. Cave dwellers are…………………………………………………………………………
8. LIFO stands for life in fire option.(T/F)
Examination Paper of International Business Management
6
IIBM Institute of Business Management
9. Starbursts are ………………………………………………………………………………………………………
10. Name one of the common wealth of independent States (CIS)……………………………………………..
Part Two:
1. Write short “Hofstede’s Cultural Typology”.
2. Write a short note on “Diffusion Theory”.
3. According to “D’arcy Massius Benton & Bowles’s Euroconsumer Study”. Who are disaffected survivors.
4. What do you understand by “Piggyback Marketing”.
END OF SECTION A
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
Which Company Is Transnational?
Four senior executives of companies operating in many countries speaks:
COMPANY A
We are transnational company. We sell our products in over 80 countries, and we manufacturer in 14 countries. Our overseas subsidiaries manage our business in their respective countries. They have complete responsibility for their country operations including strategy formulation. Most of the key executives in our subsidiaries are host-country nationals, although we still rely on home-country persons for the CEO and often the CFO (chief financial officer) slots. Recently, we have divided the world regions and the United States. Each of the world regions reports to our world trade organization, which is responsible for all of our business outside United States.
The overseas companies are responsible for adapting to the unique market preferences that exist in their country or region and are quite autonomous. We are proud of our international reach: We manufacture not only in the United States but also in Europe and the United Kingdom, Latin America, and Australia.
We have done very well in overseas markets, especially in the high-income countries with the exception of Japan. We would like to enter the Japanese market, but let’s face it, Japan is a protected country. There is no level playing field, and as you no doubt know, the Japanese have taken advantage of the protection they enjoy in their home country to launch an export drive that has been a
Examination Paper of International Business Management
7
IIBM Institute of Business Management
curse for us. Our industry and our home country (the United States) has been a principle target of the Japanese, who have taken a real bite out of our market share here in the United States. We are currently lobbying for more protection from Japanese competition.
COMPANY B
We are a unique transnational media company. We do not dominate any particular area, but we have an important presence on three continents in magazines, newspapers, and television. We have a global strategy. We are a global communications and entertainment company. We’re in the business of informing people around the world on the widest possible basis. We know how to serve the needs of our customers who are readers, viewers, and advertisers. We transfer people and money across national boundaries, and we know how to acquire and integrate properties as well as how to start up a new business. We started out as Australian, and then the weight of our main effort is in the United States. We go where the opportunity is because we are market driven.
Sure, there are lots of Australians in the top management of this company, but we started in Australia, and those Aussies know our business and the company from the ground up. Look around and you’ll see more and more Americans and Brits taking the top jobs. We stick to English because I don’t believe that we could really succeed in foreign print or broadcast. We know English, and so far the English-speaking world is big enough for us. The world is shrinking faster than we all realize, and to be in communications is to at the center of all change. That’s the excitement of what we’re doing – and also the importance.
COMPANY C
We’re a transnational company. We are committed do being the number-one company in our industry worldwide. We do all of our manufacturing in our home country because we have been able to achieve the lowest cost and the highest quality in the world by keeping all engineering and manufacturing in order to maintain our cost advantage. We are doing this reluctantly but we believe that the essence of being global is dominating markets and we plan to do whatever we must do in order to maintain our position of leadership.
It is true that all of our senior managers at home and in most of our foreign markets are home-country nationals. We feel more comfortable with our own nationals in key jobs because they speak our language and they understand the history and the culture of our company and our country. It would be difficult for an outsider to have this knowledge, which is so important to smooth-working relationships.
COMPANY D
We are a transnational company. We have 24 nationalities represented on our headquarters staff, we manufacture in 28 countries, we market in 92 countries, and we are committed to leadership in our industry. It is true that we are backing off on our commitment to develop business in the Third World. We have found it extremely difficult to increase sales and earnings in the Third World, and we have been criticized for our aggressive marketing in these countries. It is also true that only home-country nationals may own voting shares in our company. So, even though we are global, we do have a home and a history and we respect the traditions and sensibilities of our home country.
We want to maintain our number-one position in Europe, and over time achieve the same position of leadership in our target markets in North America and Japan. We are also keeping a close eye on the developing countries of the world, and whenever we see a country making the move from low income to lower middle, or from lower middle to upper middle, or from upper middle to high income we commit our best effort to expand our positions, or, if we don’t have a positions, to establish a position. Since our objective is to achieve an undisputed leadership position in our industry, we simply cannot afford not to be in every growing market in the world.
We have always had a European CEO, and this will probably not change. The executives in this company from Europe tend to serve all over the world, whereas the executives from the United States
Examination Paper of International Business Management
8
IIBM Institute of Business Management
and Japan serve only in their home countries. They are very able and valuable executives, but they lack the necessary perspective of the world required for the top jobs here at headquarters.
1. Which company is transnational?
2. What are the attributes of a transnational company?
3. What is the difference between a domestic, international, multinational, global, and transnational company?
4. At what stage of development is your company and your line of business today? Where should you be?
Caselet 2
Parker Pen Co. (A)
INTRODUCTION
The meeting at sunny Palm Beach concluded with nary a whimper of dissent from its participants. After years of being run as a completely decentralized company whose managers in all corners of the world enjoyed a high degree of flexibility, Parker Pen Co., Janesville, Wisconsin, was forced to reexamine itself. The company had enjoyed decade after decade of success until the early 1980s. By this time, Parker faced strong competitive threats and a deteriorating internal situation. A new management team was bought in from outside the company – an unprecedented step for what had been until then an essentially family-run business. At the March 1984 Palm Beach meeting, this new group of decision makers would outline a course of action that would hopefully set Parker back on a path to success.
The men behind the new strategy were supremely confident of its chances for success – and with good reason. Each was recognized as a highly skilled practitioner of international business and their combined extensive experience gave them an air of invincibility. They had been recruited from larger companies, had left high-paying, rewarding jobs, and each had come to Janesville with a grand sense of purpose. For decades, Parker had been a dominant player in the pen industry. In the early 1980s, hoe-ever, the company had seen its market share dwindle to a mere 6 percent and, in 1982, net income plunged a whopping 60 percent.
To reverse this decline, Parker recruited James Peterson, an executive vice president at R.L. Reynolds, as the new president and CEO. Peterson hired Manville Smith as president of the writing instruments group at Parker Smith, who was born in Ecuador and had a broad international background, came from 3M where he had been appointed division president at the tender age of 30. Richard Swart was vice president/marketing of the writing instruments group. He spent 11 years at the advertising agency BBDO and was an expert on marketing planning and theory. Jack Marks was head of writing instruments advertising. Marks came to Parker from Gillette, where, among other things, he assisted in the worldwide marketing of Paper Mate pens. Rounding out the team was Carlos Del Nero, manager of global marketing planning, who brought with him considerable international experience at Fisher-Price. Each of these men was convinced that Parker would right itself by following the plan they unveiled at Palm Beach.
A BRIEF HISTORY OF PARKER PEN
The “Rolls Royce” of the Pen Industry
The Parker name has been identified with pens since 1888 when George S. Parker delighted ink-splotched pen users everywhere by introducing a leakproof fountain model called the Parker Lucky Curve. Parker Pen would eventually blossom into America’s, if not the world’s, largest and best-known pen market. Parker’s products, which would eventually include ballpoint pens, felt-tip pens,
Examination Paper of International Business Management
9
IIBM Institute of Business Management
desk sets, mechanical pencils, inks, leads, erasers, and, of course, the fountain pen, were also known for their price tags. In 1921, for example, Parker introduced the Duofold pen. The Duofold, even though it was comparable to other $3 pens on the market, was extravagantly priced at $7. Parker was able to charge a premium price because of its reputation for quality and style, and its skill in positioning products in the top price segment.
Parker’s position as America’s leading pen marker was solidified during the years when the pen was mainly viewed as a gift item. High school and college graduates in the 1940s and 1950s, for example, were quite likely to receive a Parker “51” fountain pen (priced at & 12.50) commemorating their achievement. Indeed, it was with a “51” that General Douglas MacArthur signed the Japanese Peace Treaty in 1945. Parker’s stylish products and high profile name would keep it at the top of the pen market until the late sixties as well as a few foreign brands, knocked them out of first place once and for all.
Of course, Parker would not have lost its hold on the market had it not made some oversights along the way. In addition to a more competitive environment, Parker failed to come to terms with a fundamental change in the pen market – the development of the disposable, ballpoint market. When Parker unveiled the $25 “75” pen in 1963, it showed that it remained committed to supplying high showed that it remained committed to supplying high priced pens to the upper end of the market. As the 1960s wore on, a clear trend toward cheap ballpoint and soft-tip pens developed. Meanwhile, Parker’s only ultimately successful addition to its product range in the late sixties was the “75” Classic line, yet another high-priced pen.
A Brie Flirtation with Low-Priced Pens
Parker did, however, make an effort to compete in the lower price segment of the market in the late 1960s only to see it fail. In an attempt to capitalize on the trend toward inexpensive pens, Parker introduced the T-Ball Jotter, priced at $1. 98. The success of the Jotter led it to move even further down the price ladder when it acquired Eversharp. Whereas the Jotter had given Parker reason to believe it could make the shift from pricy pens to cheap pens with little or no difficulty, the Eversharp experience proved to be different. George Parker, a grandnephew of the company’s founder and president of Parker at the time, stated the reasons for the Eversharp failure, as well as its consequences:
All the market research surveys said go lower, go lower, go lower, that’s where the business is. So I said, ‘Go lower? Fine. But we don’t know how.’ We bought Eversharp and tried to run it ourselves, and we couldn’t do it. our people just couldn’t think in terms of big units, and they didn’t know how to sell people on the lower-priced end of the business – grocers, supermarkets, rack jobbers. The result was, Bic and Paper Mate were cleaning up in the lower-priced end, Cross in the high, and Parker was getting up, but our costs went up faster, and our profits were squeezed.
The 1970s: The Illusion of Success
Despite the difficulties Parker encountered when it left its niche in the upper end of the pen market, the company experienced a healthy period of growth and profitability for most of the 1970s. Demand for its products remained strong, and its worldwide markets expanded significantly due to a rise in consumer income and increasing literacy rates in much of the Third World. Parker also chose to diversify during this decade, and its most noteworthy acquisition, Manpower, Inc., proved to be a temporary-help firm, Parker was the slightly more profitable of the two. With the boom in temporary services in the late seventies and early eighties, however, Manpower eclipsed Parker in sales and earnings and eventually subsidized its parent company during down periods.
Why did parker fall from its position of leadership in the writing instrument market” there were many reasons, and one of the most important was the weakening of the U.S. dollars. At its peak, Parker accounted for half of all U.S. exports of writing instruments and 80 percent of its total sales
Examination Paper of International Business Management
10
IIBM Institute of Business Management
came from 154 foreign countries. Parker was especially strong in Europe, most particularly in the United Kingdome. When sales in the strong European currencies were translated into dollars, Parker earned huge profits.
The downside of a weak dollar, however, was that it gave Parker the illusion that it was a well-run company. In fact, throughout the 1970s, Parker was a model of inefficiency. Manufacturing facilities were dated and inefficient. Production was so erratic that the marketing department often had no idea what type of pens they would be selling from year to year or even month to month. Under the leadership of George Parker, nothing was done by company headquarters to update these facilities or to develop new products. As a result, subsidiaries and distributors around the world saw fit to develop their own products. By the end of George Parker’s reign, the company’s product line included 500 writing instruments.
That distant subsidiaries would have the leeway to make such decisions was not at all unusual at Parker, for it had long been known as one of the most globally decentralized companies in the world. Decentralization , in fact, was something that Parker took pride in and considered to be vital to its success as a multinational. Yet it was this very concept that Peterson and his new management team would hold to be responsible for much of what ailed Parker Pen.
PARKER’S GLOBAL OPERATIONS BEFORE PETERSON
In addition to having a hand in manufacturing and product-line decisions, Parker’s subsidiaries developed their own marketing strategies. More than 40 different advertising agencies promoted Parker pens in all the corners of the globe. When Peterson came to Parker, he was proudly informed that the company was a “federation” of autonomous geographical units. The downside to the “federation” concept, Peterson though, was that home country management often lacked the information needed to make and coordinate basic business decisions. Control was so completely decentralized that Parker didn’t even know how many pens it was selling by the time Peterson and his group arrived.
On the other hand, decentralization obviously had its positive aspects, most noticeably in the field of advertising. Pens mean different things to different people. Whereas Europeans are more likely to choose a pen based on its style and feel, a consumer from a lesser-developed country in the seventies viewed the pen as nothing less than a badge of literacy. In additional, tastes varied widely from country to country. The French, for example, remained attached to the fountain pen. Scandinavians, for their part, showed a market preference for the ballpoint. The logic behind having so many different advertising agencies was that, even if it appeared to be somewhat inefficient, in the end the company was better off from a sales standpoint.
Some of the individual advertising agencies were able to devise excellent, imaginative campaigns that struck a responsive chord among their local audiences. One example was the Lowe Howard-Spink agency in London. The Parker U.K. division became the company’s most profitable during the tenure of the Lowe agency. An example of its creativity is an ad is a picture of a dead plumber, on his back, with a giant Parker pen protruding from his heart. Part of the text is as follows:
Do you know plumbers who never turn up?
Hairdressers who missed their vocations as butchers?
Drycleaners who make your stains disappear – and your clothes with them?
Today, we at Parker give you the chance to get your own back.
Examination Paper of International Business Management
11
IIBM Institute of Business Management
Not only are we offering a beautiful new pen called the Leque which owes its deep luster to a Chinese technique 2000 years old, but we are attempting to revive something that went out when the telephone came in.
The well-armed, witty, malicious dart.
Although the Parker U.K. division was a success, however, the company’s general inefficiencies, loss of market share, and lack of strategic direction were finally revealed in the early 1980s with the rise of the U.S. dollar. Parker’s financial decline was even more precipitous than the dollar’s increase. When the huge 1982 losses were registered, Peterson was brought in from R.J. Reynolds to try and turn things around for Parker. He decided that every aspect of the company needed to be closely examined, not the least of which was Parker’s decentralization of global operations.
1. What would you do if you were in James Peterson’s shoes in January 1982?
2. What changes, if any, would you make in Parker’s marketing strategy?
3. Which aspects of Parker’s structure would you discard? Which would you keep?
4. Assume that you are James Peterson and you have just hired a new management team composed of highly qualified executives from outside companies. You and your new team are convinced that you have the solution to Parker’s problems but there are many hold overs who disagree with you. How would you implement your plan? To what extent would you incorporate the views of Parker management into your plan?
END OF SECTION B
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. Consider the equation Y=f(A,B,C,D,E,F,G), where Y stands for consumption of soft drinks and D is the variable for cultural elements. How would this equation help a soft-drink marketer understand demand for soft drinks in global markets?
2. The president of XYZ Manufacturing Company of Buffalo, New York, comes to you with a license offer from a company in Osaka. In return for sharing the company’s patents and know-how, the Japanese company will pay a license fee of 5percent of the ex-factory price of all products sold based on the U.S. company’s license. The president wants your advice what would you tell him?
END OF SECTION
S-2-301012
No comments:
Post a Comment