MB0053 -International Business Management

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ALL 4TH SEMISTER SUBJECT SOLVED ASSIGNMENT IN RS. 600 ONLY FOR FULL SOLVED ASSIGNMENT CALL -9145336237 EMAIL ID - [email protected]
Summer 2013 Master of Business Administration- MBA Semester 4 MB0053 –International Business Management -4 Credits (Book ID: B1724) Assignment- 60 marks Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme. Q1. The world economy is globalizing at an accelerating pace. What do you mean by globalization? Discuss the merits and demerits of Globalization. Answer : Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that increase world-wide exchanges of national and cultural resources. Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities. Though several scholars place the origins of globalization in modern times, others trace its history long before the European age of discovery and voyages to the New World. Some even trace the origins to the third millennium BCE.[4][5] In the late 19th century and early 20th century the connectedness of the world's economies and cultures grew very quickly. This slowed down from the 1910s onward due to the World Wars and the Cold War [6] but has picked up again since neoliberal policies began in the 1980s and especially since the Post Cold War era started in the early 1990s.

Advantages of globalization : 1. Integration of markets: Markets are interlinked- European Union 2. Cheaper Products for Consumer: Trainers are Cheap 3. Leads to Outsourcing in some cases which can lead to job loses: Moving call centers to India. 4. Lowering of international Barriers: Now European Union can Trade with ASEAN and NAFTA. 5. Providing jobs in LEDC's and help develop economy (less Economically Developed Countries) 6. Helps prevent market Saturation in a specific market: stops there being too much competitors in one place e.g. too much call centers in UK, so move to India 7. Standardization of product: the same products can be seen in some many places - e.g. coke and McDonalds 8. Faster and wider spread of new technologies across the world. Disadvantages of globalization : 1. Intense Competition

2. Widening of Gap between rich and poor countries 3. Harder for Smaller businesses to establish themselves 4. Exploitation of workers: Paying the workers in Led's a fraction of what would be paid in to workers in LEDC's. 5. Income generated in Host country is not always spent in the same country - money earned from supplying cheap call centers in India will not be spent in India but maybe in UK or US. 6. Adverse economic condition in one country can escalate to other countries and may even adopt global proportion. 7.Globalization may also lead to faster spread of infectious disease, for people animals and plants. Such infection may be carried through, people or goods. 8. Countries become increasingly dependent on other countries for meeting their needs for goods and services. This can become a major disadvantage in situations like war.

Q2. The international trade theories explain the basics behind international trade. Compare the Absolute and comparative cost advantage theories with the help of example. Answer : Comparative advantage theory : Ricardo's theory : David Ricardo stated a theory that other things being equal a country tends to specialize in and exports those commodities in the production of which it has maximum comparative cost advantage or minimum comparative disadvantage. Similarly the country's imports will be of goods having relatively less comparative cost advantage or greater disadvantage. Assumptions : Ricardo explains his theory with the help of following assumptions : There are two countries and two commodities.  There is a perfect competition both in commodity and factor market.  Cost of production is expressed in terms of labour i.e. value of a commodity is measured in terms of labour hours/days required to produce it. Commodities are also exchanged on the basis of labour content of each good.  Labour is the only factor of production other than natural resources. TH

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Q3. Culture is more often a source of conflict than synergy. As an Indian manager, what management style and corporate culture you should be aware of while travelling to Japan and to USA? Answer : Japanese corporate culture : The culture of Japanese management that is often portrayed in Western media is generally limited to Japan's large corporations. These flagships of the Japanese economy provide their workers with excellent salaries, secure employment, and working conditions.[citation needed] These companies and their employees are the business elite of Japan.[citation needed] Though not as much for the new generation still a career with such a company is the dream of many young people in Japan,[citation needed] but only a select few attain these

jobs. Qualification for employment is limited to the few men and women who graduate from the top thirty colleges and universities in Japan. In 1933 Matsushita, during the great depression, created seven “guiding principles": 1. Service to the public – by providing high-quality goods and services at reasonable prices, we contribute to the public’s well-being; 2. Fairness and honesty – we will be fair and honest in all our business dealings and personal conduct; 3. Teamwork for the common cause – we will pool abilities, based on manual trust and respect; Uniting effort for improvement – we will constantly strive to improve our corporate and personal performances; 4. Courtesy and humility – we will always be cordial and modest and respect the rights and needs of others; 5. Accordance with natural laws – we will abide by the laws of nature and adjust to the ever-changing conditions around us; and 6. Gratitude for blessings – we will always be grateful for all the blessings and kindness we have received.” The “guiding principles” were “remarkable for their time.” The seven principles are used by Matsushita’s company today and serve as principles for other Japanese companies. Because the “guiding principles” are such powerful statements and an extension of the Japanese cultural into business, the principles have been renamed to the “’Seven Spirits of Matsushita’” to honor Matsushita. USA's corporate culture : The US business culture is unique in many ways. While not an exhaustive list, the following areas are among the most important and the ones most frequently asked about by foreign business people. 1.Americans often take a “business-first” approach, with personal relationships playing a smaller role than in many other cultures. This is reflected in common phrases like “business is business” (meaning personal considerations shouldn’t be taken into account when making a business decision) and “it’s just business, it’s not personal” (meaning that negative consequences from a business decision are not meant to be personally hurtful or insulting). Americans will generally do business with the company they think gives them the highest value for the lowest price, not based on personal relationships. 2.Americans believe that being direct is a virtue. Americans ask for what they want, say what they mean, TH

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Q4. Regional integration is the bonding between nations and states through political, cultural and economic cooperation. A whole range of regional integration exists today. Discuss these 6 types in brief. Answer : Regional integration is a process in which states enter into a regional agreement in order to enhance regional cooperation through regional institutions and rules. The objectives of the agreement could range from economic to political to environmental, although it has typically taken the form of a political economy initiative where commercial interests have been the focus for achieving broader socio-political and security objectives, as defined by national governments. Types of regional integration : Types of the regional integration agreements (RIA's) are mainly defined according to the different instruments which identified and limited the scope of regional economic integration. These instruments include preferential access for specified products, internal tariff elimination, determination of common external tariff (CET), free factor mobility, harmonization of economic policies and harmonization of political policies. The classification shows that there is a hierarchical order between each type of regional integration agreement. For this reason, each subsequent type of the RIA covers the content of the previous type in

addition to its own requirements. Accordingly, it is possible to distinguish six different types of integration. These types are: • Preferential trade area (PTA) which gives preferential access to certain products from the participating countries. This can be called as a limited or sector based free trade area. • Free trade area (FTA) that include the reciprocal removal of tariffs on member countries’ goods. In an FTA, each member is free within the limits specified by the GATT/WTO system on deciding the level of external tariffs that will be applied to non members. As there is flexibility on the interactions with the third countries, TH the

ALL 4 SEMISTER SUBJECT SOLVED ASSIGNMENT IN RS. 600 ONLY FOR FULL SOLVED ASSIGNMENT CALL -9145336237 EMAIL ID - [email protected]

Q5. The decision of a firm to compete internationally will be strategic. While formulating global marketing strategies, how should a firm deal with segmentation, market positioning and international product policy? Answer : 1. Segmentation : Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch-points that best allow to reach them. Methods for segmenting consumer markets : Geographic segmentation :

ALL 4 SEMISTER SUBJECT SOLVED ASSIGNMENT IN RS. 600 ONLY FOR FULL SOLVED ASSIGNMENT CALL -9145336237 EMAIL ID - [email protected]
Marketers may segment according to geographic criteria—nations, states, regions, countries, cities, TH Q6. Global sourcing industry is on a growth run as there are sound business reasons to it. Discuss these reasons with examples. Answer : Reasons for global sourcing : 1. Access to raw materials. If your company uses raw materials that are not abundant in your own country then you can lower your supply risk by sourcing globally if availability of those materials is greater elsewhere. Economies of scale in extraction can also mean lower prices even with the extra cost of transport and duties factored in. Wal-Mart has been actively pursuing a strategy that emphasizes global sourcing. For example, Wal-Mart identifies common products used throughout the world and “determines whether there is an opportunity to improve quality, reduce costs and, by working with a best-in-class supplier, achieve better replenishment and new item introductions .” For instance, Wal-Mart has worked with its copy-paper sales supplier to offer new products and more value to customers throughout the world. By actively working with these suppliers, Wal-Mart has realized sales increases of 46 percent in England, 94 percent in Germany, 38 percent in Canada, and 25 percent in U.S. discount stores, and a 13 percent increase at Sam’s Club stores 2. Access to cheaper wages. Manufacturing processes that are labour-intensive can be sourced more cheaply from countries where wages are lower than in your own country. This is particularly true if the technology used has a life cycle. As the technology matures, high wage cost producers tend to move on to new technology as the features and benefits it brings can be used to charge a premium price that offsets the

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