Sample Question papers of International Business Management for MBA, MMM, PGDM, BBA and other management Students. We hope these IBM model question papers will help students to get an idea about the pattern of Question Papers. We have referred previous years Pune University questions papers to create these sample sets.
Instructions for Candidates
I) Section-II (case study) is compulsory.
2) Attempt any three questions from section-I.
3) Each question from section-I carries 15 marks and section-II (case study) carries 25 marks.
SECTION – I
Q1) What are the barriers to internation~l trade? List and explain all the types of barriers to international trade.
Q2) Explain the concept of country risk analysis. Comment on socio-economic risk and its management.
Q3) What do you mean by Multi-National Enterprises? Explain all t~e advantages and disadvantages of MNEs from the point of view of MNEs as well as the host country.
Q4) What are the various methods of payment available for settlement of international trade? Explain the working of a letter of credit and list all the types of L/Cs.
Q5) Write short notes on any three:
a) International Monetary Fund.
b) WTO Ministerial Conferences.
c) International market selection.
d) 2004-09 EXIM Policy.
e) Global sourcing and its impact on an Indian Industry.
SECTION – II
Q6) CASE STUDY
Gillette Targets Emerging Markets’
As it entered the twenty-first century, Gillette faced a difficult choice. Should it continue targeting emerging markets or not? Its strategy to move aggressively into markets in the developing world and the former Soviet bloc had been hailed as a success only a few years before. Recent poor earnings, however, had management considering whether this choice had been a wise one.
The Boston-based firm was founded in 1895 and is still best known for its original products, razors and razor blades. By the end of the twentieth cent~ry, Gillette had grown into a global corporation that marketed. its products in 200 countries and employed 44,000 people worldwide. About 1.2 billion people use Gillette products every day. Its sales are about equally distributed among the United States (30 per cent), Western Europe (35 per cent), and the rest of the world (35 per cent).
As markets matured in developing countries, Gillette sought growth through product diversification, moving into lines such as home permanents, disposable lighters, ballpoint pens, and batteries. In the mid-1990s, Gillette targeted several key emerging markets for growth. Among them were Russia, China, India and Poland.
Russia was already a success story. Gillette had formed a Russian joint venture in St.Petersburg and within 3 years Russia had become Gillette’s third-largest blade market.
Gillette’s move into the Czech Republic had prospered as well and in 1995 Gillette bought Astra, a 10caI; privately-owned razor blade company. Astra gave Gillette expanded brand presence in the Czech market. Astra’s relatively strong position in export markets ~n East Europe, Africa and Southeast Asia proved a boon to Gillette in those markets as well. Jus.t as in other markets in the developing world, 70 per cent of East European blade .consumers used the older, lower-tech double-edge blade. In more developed markets, consumers appreciated product innovation and the shaving market had moved to more high-tech systems such as Gillettes Sensor.)
Then disaster struck. A financial crisis that began in Thailand quickly spread across Asia. Many wary investors responded by pulling money out of other emerging markets as well as depressing economies across the globe. Bad economies meant slower sales for Gillette, especially in Asia, Russia and Latin America. In Russia, wholesalers could not afford to buy Gillette products. Consequently, these products disappeared from retail stores and Gillette’s Russian sales plummeted 80 per cent in a single month.
Gillette found it could not meet its projected annual profit growth of 15-20 per cent. The price of Gillette shares tumbled 36 per cent in 6 months. To save money, Gillette planned to close 14 factories and layoff 10 per cent of its workforce.
Despite its recent bad experience in developing countries and in the former Soviet bloc, Gillette was still moving ahead with plant expansion plans in Russia and Argentina that would total $64 million. Some even suggested that this was a good time to expand in the emerging markets by buying up smaller competitors that had been hurt even worse by the crises. Meanwhile, back in the developed world, another large global consumer products firm, Unilever, announced that it would be entering the razor market.
1. Why do companies such as Gillette target emerging markets? Do you agree with this strategy?
2. What are the dangers to Gillette of targeting emerging markets?
3. Why would local, privately-owned companies like Astra want to sell out to companies like Gillette Why are such companies attractive acquisitions to multinational firms?
4. What global strategy would you suggest for a company such as Gillette? Explain your choice.
Instructions to the candidates:
1) Attempt any Four questions.
2) All questions carry equal marks.
Q1) Explain with diagram Griesinger’s Cybernetic Paradigm of the Control Process.
Q2) What are the features of a profit centre? What are the advantages and disadvantages of profit centre?
Q3) What do you understand by ROI & EVA as a performance measure for Investment centres? Compare the merits and demerits of the two?
Q4) What do you understand by Goal Congruence? Give examples and explain the problem of Goal congruence faced by multidivisional companies at different levels.
Q5) Write short notes on (Any Three) a) Internal Audit.
b) Value Chain.
c) Just in Time.
d) Activity-Based Costing.
e) Two-step Transfer Pricing.
Q6) National Ltd is a wholesaler who sells its products to a wide range of retailers. Marketing is done through three geographical areas: the South, the Midlands and the North. The estimates of the costs and revenues for each sales territory for the next accounting period are as follows.
South Midlands North Total
(£) (£) (£) (£) (£) (£) (£)
Sales 900 000 1000 000 900 000 2800 000
Cost of goods 400 000 450 000 500 000 1350 000
Gross Profit 500 000 550 000 400 000 1450 000
Salesmen’s 80 000 100 000 120 000
Sales office and
expenses 40 000 60 000 80 000
Advertising 50 000 50 000 50 000
expenses 50 000 220 000 60 000 270 000 80 000 330000
expenses 80 000 90 000 90 000
warehousing 32 000 36 000 36 000
Total costs 332 000 396 000 456 000 1184 000
Net profit (or loss) 168 000 154 000 (56000) 266000
The products are packaged and dispatched from a central warehouse, and it is estimated that 50% of the costs are variable and the remainder are fixed. All of the selling costs are fixed, with the exception of salesmen’s expenses, which are variable with sales revenue. All of the administrative expenses of the headquarters are common and unavoidable to all alternatives and have been apportioned to sales territories on the basis of sales value. In view of the loss, should the North area be closed?
Instructions to the candidates:
1) Attempt any three questions from Q1 to Q5.
2) Q6 is compulsory.
3) Figures to the right indicate marks.
Q1) Explain the Informal Management Control System structure with detailed discussion on the following sub-systems. 
a) Management Style and Culture.
d) Coordination and Integration. e) Control Process.
Q2) Explain the nature of Activity Based Costing and compare it with Traditional Costing. What are the four different levels of activities used in ABC to allocate costs? What are the benefits of ABC? Give examples to show how ABC is superior to Traditional Costing and how it leads to more accurate management control of product costs. 
Q3) In deciding on the investment base to be used in evaluating managers of Investment centres what practices the best measure the performance of the unit as an economic entity? Give the pros and cons of different practices related to current and fixed assets measurement. 
Q4) What do you understand by goal congruence? Explain the importance of achieving goal congruence in designing Management Control Systems in following Sub-systems.
a) Staff welfare & Rewards System.
b) Profit Centres / Transfer Pricing.
c) Allocation of Head Quarters’ expenses on different divisions. 
Q5) Write short notes on any Three
a) Control Systems in Service Organizations.
b) Management Audit.
c) Strategic Planning and Management Control.
d) Annuity Depreciation.
e) Engineered and Discretionary expense centres.
Q6) Actual performance data of 5 divisions of XYZ Ltd. are as follows. (Figures in Rs. Lakhs)
Division Profit Average Current Average Fixed
A 80 90 400
B 60 190 450
C 50 350 550
D 105 200 800
E 155 200 800
a) Compute ROI for each division.
b) Compute EVA for each division. Charge on the usage of Current Assets is 50/0 and Fixed Assets is 10%.
c) XYZ Ltd. decides to make an investment in Fixed Assets costing Rs. 1 Crore. This investment is expected to produce a profit of Rs. 10 lakhs per year, what will be the effect on ROI and EVA of each division? Comment on the results.
d) If XYZ decides in a declining market, a retrenchment strategy and sells a plant reducing fixed assets by Rs. 75 lakhs, there will be a reduction in annual profits by Rs. 5 lakhs. What will be the effect on ROI and EVA of each division? Comment on the results. 
Instructions to the candidates:
1) Attempt any three questions from 1 to 6.
2) Attempt anyone from 7 & 8.
3) Figures to the right indicate full marks.
Q. 1) Explain the control process thoroughly. Elaborate the role played by each of its elements. Elaborate scope of management control systems. 
Q. 2) In a typical organization one can observe goal conflicts arising out of different roles its people play/assume i.e. an individual, hierarchical, functional, organizational. How one can resolve this conflict? Explain with suitable example.” 
Q. 3) Explain the input-output relationship. What role it plays in performance assessment of
responsibility centres. Justify your answer with suitable examples: 
Q. 4) Discuss the advantages and disadvantages of strategic planning. 
Q. 5) Discuss the cause-effect relationship between the four perspectives of the balanced scorecard. Give a suitable example. 
Q. 6) Compare (any three) : 
a) Profit centre and revenue centre.
b) Rolling budget and zero-based budget.
c) MCS in a manufacturing unit and for a project.
d)”Engineered cost and budget” and “Discretionary cost and budget”.
e) Financial and Non-financial measures.
f) Traditional costing and ABC.
Q. 7) ABC Ltd is a multi-division integrated company. One of its division “A” produces
a product, which is being sold in the open market entirely. However, in view of demand
from division “B”, “A” supplies part of its produce to ‘B’. To keep motivated both the
divisions, the company has established a transfer pricing policy such that’ B’ shall
pay actual full cost plus 50% of profit division.
‘A’ would have made if it would have sold the product in the open market. Given below the sales and cost data for division’ A’.
Volume per annum 10,000 units
External sales @ Rs.150 per unit 6,000 units Internal transfer as per TP policy 4,000 units.
Variable cost Rs.80 per unit
Fixed cost Rs.20 per unit.
a) Compute the transfer price per unit need to be born by division ‘B’ in the Present circumstances.
b) Incase demand from division B goes up from 4,000 to 6,000 units and division agrees to pay 60% of profit instead of 500/0 agreed earlier. Compute transfer price in this situation.
c) Compute profitability of division’ A’, in case of situations discussed in 1 & 2 above.
d) Given selling price of the final product by ‘B’ is Rs.250 per unit, variable cost ofRs.30 per unit (excluding transfer price) and fixed cost ofRs.20 per unit (based on the volume of 4,800 units). compute the profitability of division ‘B’ in both the above-discussed situations’- 1 & 2. Offer your comments on the suitability of approach. 
Q. 8) Mis. Mittal Ltd has two divisions M & N. Division M sales two-third of its produce to division N and rests in the open market. Cost and revenue of these divisions and that of the company for year 2,000 is given as under:
(Amt.in Rs.) M N Company
Sales (outside only) 16,000 48,000 64,000
Cost of manufacturing 24,000 20,000 44,000
(Internal + outside sales)
There is no opening or closing stock. You are required to find out the profit of each division and that of the company under following options of transfer prices-
a) at cost.
b) at cost plus a margin of25%.
c) at cost plus a margin of 25% ; but there is overspending in division M by Rs.3,000.
d) at market price. 
Instructions to the candidates:
1) Please attempt any three questions from serial No.1 to serial No.6.
2) Question No.7 (Case Study) is compulsory.
3) Answers from Q. 1 to Q. 6 will attract a maximum of 15 marks each.
4) Question No.7 will carry 25 marks.
Ql) Using the example of a suitable company. Describe their process of achieving Globalisation, in various stages. 
Q2) Analyse the factors that affect a. country risk evaluation? Which are the three worst types of risks? And why? 
Q3) Write all you know about ‘World Trade Organisation’. Explain TRIPS, TRIMS and DSBs. 
Q4) How do trade blocks function? Illustrate with two examples. What are tariff Nontariff & trade barriers? 
Q5) Write Short Notes on (Any three) : 
a) Balance of Trade.’
b) Balance of Payment.
d) World Bank
e) Methods of Payment.
f) EXIM Policy.
Q6} Describe the various methods used for evaluating & selecting countries as markets. What strategies should be deployed for successful entry? 
Q 7) P1ease scrutinise the enclosed case study & answer the questions at the end of the case study 
The localisation of Global Companies:
Korean Experience Countries tend to be more concerned about large companies than small ones because of their greater potential impact on national economic and political. objectives. But not all companies operating internationally is large. In fact, the number of new MNEs is growing at about 4,000 to 5,000 per year. These are generally smaller companies with smal1er foreign investments. Generally, they have to do less to justify their entry and operations. Because they are assumed. to have less impact on host societies, countries often treat their entries differently. Further, many LDC governments prefer the entry of smaller companies because they may be more willing to yield to host -country wishes, increase c01npetition because of their numbers, and supply smaller-scale technology more suited to LDC needs.
Internationalisation is viewed as a process leading to the outcome of a competitive environment that in turn induces efficiency in production and optimality in resource allocation. A few economists refer to internationalisation as a surrogate to indicate the level of cross-border production by Multi-National Corporations (MNCs) and their network of affiliates, subcontractors and partners. Yet another viewpoint analyses the different dimensions of internationalisation ascribing the internationalisation of corporate strategies, in particular, their commitment to competition as well as the internationalisation of consumer and financial markets, the diminished role of national governments in designing the rules for international governance, and so on as a set of characteristics describing the different. dimensions df the process.
Superior Performance from Indian Subsidiaries
In the past, it was the Indian subsidiaries of the MNEs who had to depend on their parent companies for financial support. Though many of the Indian subsidiaries still do that, a new phenomenon is also gaining ground. Many of the Indian subsidiaries of major MNEs like ABB, LG, Samsung, Nestle, and Siemens, to name a few, are all beating their parent companies on the performance scale, and India is fast emerging as the growth engine for MNEs. Some of these Indian subsidiaries are even clocking double-digit growth even when their parent companies are recording losses.
Though the vast Indian market of the billion-plus population holds great opportunity for the consumer goods companies, this phenomenon is not restricted to that sector only. Indian subsidiaries for the MNEs in non:-consumer goods sectors such as engineering and pharmaceuticals are also showing the same phenomenon. Global sales for Siemens (Siemens AG) has decreased by 3.4 per cent m 2002 (total sale in 2003 was only $83,784 million) while the Indian subsidiary of Siemens showed an increase in net sales by 13.8 per cent.
Changing Global Dynamics
With rapid globalisation, intensive competition and poor economic conditions prevailing in most economies, l’vfN”Es arc always searching for ways to reduce costs to improve the bottom line. As a result, we have seen a rise in outsourcing to India Along with this- India’s advantage of the availability of low-cost skilled labour gained importance. On the flip side, with the opening up of the Indian economy, new opportunities arrived, which these companies have grabbed successfully.
At the same time, opening up of the Indian economy and moderately high growth rate have attracted new competitors. With increased competition, companies have to reassess their existing investments and business portfolio. Those businesses, where returns on investments were not high and were not contributing significantly to their overall profit, were sold or hived off. The restructuring has left the Indian subsidiaries in a better position to move ahead of the competition.
Production of goods and managing supply chain effici~ntly has also helped Indian subsidiaries of the MNEs to contribute more to their bottom line. Low manpower cost in manufacturing has helped the Indian subsidiaries very much. Siemens India benefited by shedding its excess workforce and reorganising its workforce has been able to reduce its costs. At the factory level, the company reorganised its workforce on the basis of employees’ ability to handle functions across one or more divisions. As a result, Siemens was able to maintain the same efficiency in terms of output level with 50 per cent fewer employees.
Hyundai India has the best-integrated manufacturing plant amongst the Indian subsidiaries of the MNEs. The efficiency of Hyundai India’s operation at its Chennai plant has made the top management of its parent company in South Korea to send 2,000 managers and workers from its plant to Seoul to study Indian subsidiary’s operations. Siemens has also reduced -its number of vendors from 20,000 to 2,000 with plans of further reducing them. Earlier the sheer number of vendors complicated the process of checking, ensuring quality, and delivery time. It has since then started grading its suppliers on several- parameters.
LG has followed kaizen in its Indian manufacturing plants, with the ultimate aim to achieve Six Sigma Quality. LG has also passed on the same. work ethics to its suppliers.
Hyundai is planning to make Hyundai India as the global sourcing base for Santro. Siemens India is now also becoming increasingly significant. contributor to Siemens AG. The outsourcing from Siemens India now contributes 21 per cent of its consolidated revenues. Cummins India now exports to China and Mexico.
While MNEs like Kellogg’s failed to understand the Indian consumers, relentless focus towards the Indian consume~s has enabled these companies to increase their sales, which has a positive impact on their revenues and profits. The localisation of products and knowing what the Indian consumers want worked well for the consumer goods companies. Samsung has learned this aspect quickly and that it is very important for them to live to the expectations of the Indian consumers to stay on in the Indian market.
Samsung has washing machines with unique ‘sari guard’ and a memory restart: the feature that is ideally suited for India where there are frequent power cuts. LG has also launched TV s with Hindi and regional language menus.
Both Samsung and LG have launched TV sets with more than 800 watts ‘of sound, compared to the normal 200 watts. This is a result of findings by both the companies that Indians like more volume on their TV sets because famili~s often watch in a noisy environment. With the end-consumers in mind, LG now offers products with unique technology. Its Plasma range airconditioners with their unique Gold Fin technology offer air-filtering benefit. For the lower-end market, where the consumers are price-conscious, LG has launched low-priced TV such as Cine plus.
Nestle India launched a low priced (Rs 2) liquid chocolate, called Choc stick to cater to the price-conscious customers. Hyundai Accent has a powerful engine and sleek interiors at an attractive price range. In Siemens’ case, the company has introduced several programmes to seek, generate and monitor customer feedback, and improve response time. It even redesigned indirect sales channels.
One such customer-related programme is the Key Account Management (KAM) concept. Earlier, a customer was being approached by people from. two or more. divisions of the company.. In the KAM concept, one key’= executive is responsible for getting business from all divisions of that customer. The company ~Iso initiated a mystery call~r competition, under which top Siemens executives acting as customers would call up executives of various centres at different times, even during lunch hours. These initiatives have resulted in an increase in the number of repeat orders, which resulted, in generating more revenues and profits.
Formulating successful strategies and executing them efficiently played an important role in behincl these companies’ profitability; be it in the entry-level, manufacturing, marketing, branding and pricing. Some of these companies have also found huge success by entering the vast rural market.
Even though Hyundai entered the Indian market only in 1996, it was able to lead in all the three auto segments, namely B-segment, C-segment and D-segment, in which it competes. Hyundai’s choice of the deluxe small car to enter the Indian auto market instead of a sedan was its brilliant strategic move. Hyundai had correctly read the gap in the Indian market in that segment. That success helped Hyundai to establish its brand among the Indian consumers and has allowed Hyundai’s parent company to introduce more new cars in other segments in India.
Marketers of these companies have adopted different strategies for launching products, LG’s strategy of promoting its premium models like Flatron helps the brand creation. an image of a high technology company. , The company has positioned its products keeping.in ‘mind the health-conscious attitude of Indians. Samsung’s ‘DigitaIAll’ campaign has worked in positioning. ~ Samsung as a company, which produces high technology products in the minds of the consumers. Hyundai has used the image of Shahrukh Khan in advertising its Santro, which was an instant hit among the Indian consumers: ~
CASE DISCUSSION QUESTIONS
- A parent corporation is looking at Indian subsidiary for improving its quality of corporate governance and enhancing profitability. The theory says the reverse will happen, i.e. spillover effect from the parent to the subsidiary. This is also considered as the greatest honour ever received for Indian corporates in the professional arena.
i) What are the factors that may result in higher profitability?
ii) What can be the impact of customer-driven business practices in Indian environment?
iii) What are the measures that can be taken by the MNEs to improve their local image in India?
There is a growing concern about the opening up of the retail sector in India. What is the significance of retail MNEs in the national economy by looking at the experience of Korean MNEs in India?
Instructions for candidates
1) Please attempt any three questions from Q. No.1 to Q. No.6.
2) Question No.7 (case study) is compulsory.
3) Answers from Q. No.1 to Q. No.6 will attract a maximum of 15 marks each. Q. No. 7’s answer 25 marks.
Ql) What is Globalization – Its forces, meaning, dimensions and stages? Select any company as an example and describe their working. 
Q2) What are Tariff, Non-Tariff barriers and Trade barriers? What are Trade Blocks – explain 2 examples. 
Q3) What do you understand by Country Risks? What are the factors that affect? a country’s risk? 
Q4) Write short notes on IMF, World B~ Exim Policy, Methods of Payment in International Trade, Balance of Payment, Balance of Trade? (Any 3) 
Q5) Write all you know about WTO with emphasis on TRIPS, TRIMS and DSB. 
Q6) What the strategies for Market selection and Entry in the International Market? 
Q7) Please examine the enclosed case study and answer the questions at the end of the same. 
The emergence of New Industry: Story of Indian BPO
Trade theories advocate the optimum utilisation of resources and reducing the cost of production globally. This leads to a new tendency, which we call outsourcing less important or back-office works to low wage countries like India and China. The growing demand for backup is adding a dimension to the quickly proliferating outsourcing industry. Traditionally, conservative businesses such as insurance companies and mortgage brokers are contracting out back-office and customer service work, mirroring the way corporate titans such as IBM and General Electric moved such tasks away from the US several years ago. As new clients are handing over duties to third party companies rather than to their own subsidiaries, and in countries where they often have little experience, they feel more comfortable with suppliers who have good backup plans.
(a) Role ‘Of Educational Institution
Clearly, there are things that the educational institutions can do to help that. Some of the institutions have taken initiatives to get there and some are ~ waiting to see how these experiments shape up. There is also a lot of talks ‘:. about the need for the industry and academia to come together so that it will ” eventually help the industry better. But not much seems to be happening in this area. The orientation (of the academic institutions) will have to be a little different than the existing one, view the industry as their customers and do what’s good for the industry and get rated by the industry.
Unless the academia has that kind of alignment with customer interests, it’s difficult for them to devise the most appropriate curricula and syllabi. It is only when the academic institutions realise that they are serving ‘” a certain customer base and they need to fulfil the needs of that customer base and take proactive action internally, that the situation would improve. But, at this point of time, it appears as though the entire onus is on the industry to do it. Today, academia seems to say if you want these people you come and do whatever it is to make these people suitable for companies.
(b) Rising Demand
The huge pool of human resources in India is much talked about and a chunk of the human resources from the engineering colleges. The mistake companies commonly make is to underestimate the human potential that is available, and not providing them with the right type of opportunities. We must remember that the IT industry recruits the top 1 per cent of the brainpower that is available in this country. This number is small compared to the ones “that go to school, and the ones that graduate. So it means its the cream of the cream that gets into this industry. And so in terms of brainpower, it’s quite unmatched.
Unlikely, for the next several years, it’s not going to be uncompetitive. The wage increase is only marginal, and the productivity improvement that happens year after year compensates for the bulk of the increase that happens. To that extent, its not a factor ~o worry about, at least for the next four to five years. Nasscom report (May 2004) predicts that within a few years, there will be less supply of qualified human resource in India compared to the demand. Forrester (May 2004) says that by 2010, 3.3 million jobs will be created in IT and IT-related areas in India, That’s a lot of people. This means many companies may not go after the top 1 per cent, and they would expand it to the top 5 per cent, for which, the educational institutions have to change and intensify the courses, and should be meritocracy-based. People who score good marks or are more intelligent do get into higher schools.
(c) In Search of Talents
In order to get a comprehensive mix of capabilities and high talent, companies decided to look at outside universities as well. They went to Carnegie Mellon, Stanford, MIT, and Columbia for recruitment. These are all Ivy League schools that attract top talent. Earlier, people hesitated to come to India. A couple of years back, many Indian companies went to recruit but they .were not interested in coming to India and spending some time here.
The beginning of 2003 was a turning point when the media turned their attention to offshoring in a big way. The visibility was very high and everybody was suddenly talking about India. There is a lot more that gets outsourced to China in terms of manufacturing than to India, but India got a far greater share of that visibility. That’s when people realised that there is so much happening in India, and wanted to be a part of. it.
But when a company goes to these schools, ask for GPA-based filtering of candidates, say a GPA of over 3.5 or 3.8, most of them are Indians. Indians somehow seem to have mastered the trade of how to get high GP A. So, companies had to do a different mix in order to make sure they have a good mix of people who have gone from India to study in the USA as well as the local people, and people from other countries.
(d) Chennai, the BPO Hub
Offshore projects accounted for over 70 per cent of the total software exports of Tamil Nadu during 2003-4, according to Software Technology Parks of India, Chennai. Tamil Nadu’s total IT exports stood at Rs. 7,621.50 crore (Rs. 7621 billion) during the last fiscal, including exports from STPI, MEPZ, and other units.
Chennai and its suburbs continued to be the major software exporting locations in the state. Exports from these locations stood at Rs. 7,557.64 crore (Rs. 75.58 billion), followed by Coimbatore region at Rs. 45.76 crore (Rs. 457.6 million), and Tiruchi at Rs. 13.42 crore (Rs. 134.2 million). Application software and system software accounted for 60 per cent of total exports, followed by consultancy services at 28 per cent, and ITES at 8 per cent. Tata Consultancy Services was the top exporter from Tamil Nadu, followed by Infosys Technologies, HCL Technologies, Cognizant Technology Solutions, Wipro, and Polaris Software. Tamil Nadu’s hardware exports crossed Rs. 100 crore (Rs. 1 billion), and stood at Rs. 118.88 crore (Rs. 1.19 billion) in 2003.
CASE DISCUSSION QUESTIONS
1. To what extent does the theory of Comparative Advantage explain the rise of th~ Indian BPO industry?
2. To what extent does the Heckscher-Ohlin theory explain the rise of the Indian BPO industry?
3. Use Michael Porter’s diamond to analyse the rise of the Indian BPO industry. Does this analysis help explain the rise of this industry?
1) Question No 6 (case study) is compulsory
2) Attempt any three questions from the remaining question
3) All question carry equal marks
1) Define a multinational corporation. What are the benefits of MNC’s operating in developing countries from the point of view of the host country?
2) What are the causes of political risk that may impact a firm? What are the different means adopted by companies to deal with political risks in international business?
3) Explain the mechanics of ‘Currency Trading’ in detail. What do you understand by
b) forward and
c) Swap transaction?
4) The whole universe is a potential market for your products. Discuss the various market entry strategies that need to be evolved to exploit this potential.
5) Write short notes on any three of the following
a) Function and objectives of W.T.O.
b) Classical theory of comparative cost.
c) Different types of Letters of Credit.
d) South-East Asian crisis.
e) Asian development bank.
6) CASE study: cutting edge ltd
Cutting Edge Ltd., a Nashik based company is globally set up, for its unique products. This is a precise example of a which has remarkable skills and strategies for identifying new product developing them for commercial exploitation. The company always at global operation right from the beginning. It was very quick in and establishing itself firmly in the international markets.
The company began its corporate journey in the year 1995manufacturing of quality scissors used for various application/uses did not lose any time and was quick enough to spread its wings in other countries. By the end of the year 2004, it had added more products portfolio, popular among them are razors and blades.
CEL’s manufacturing operations, apart from Nashik are in more than 10 locations in four countries. The products are market for more than 20 countries. Within a span of fewer than 10 years, CEL has its overseas revenue from a meagre US$50000 to US$140 million.
It concentrated on its main line of scissors and blades and expanded the by adopting novel ideas like distribution-free razor blades or scissors bank(Shave and save plan) or (Cut and cut the expenditure plan). Even the recessionary period it sponsored major sporting events and through worldwide advertising kept up its sales.
The remarkable strategy adopted by this company is in identifying a for which there was need and developing from the beginning a high product and convincing consumers to buy quality and sophisticated. This enabled the company to sell more expensive products at a higher profit. It kept in close touch with the market and the needs of the and produced new product as demand arose. The company considerable market research and design engineering.
CEL realized the importance of exports and international operation. Words, international operation/business was the part of the plan from inception to the company and not an afterthought.
Out of the total sales of US$140 million, almost 92% sales are coming from the developed market like U.S.A., Canada Japan, etc. the company has not been able to make inroads in developing and underdeveloped markets. One of the main reasons fearing is that in the developing and underdeveloped markets it may able to enjoy the same profit margins as it is enjoying in developed CEL would like to make sure that its presence must be felt in the developing and underdeveloped markets and business contribution from these markets must be enhanced to a large extent without harming the profitability picture.
Analyse the case and guide the CEL management in increasing the sales revenue from the less developed markets without hampering the company’s overall profitability.
Instructions for candidates
1) Question no. 6 (case study) is compulsory
2) Answer any three questions from the remaining questions.
3) All three carry equal marks
Q1) Explain the various factors to be considered while scanning the international business environment. Give one example of each Factor.
Q2) Explain the terms:
a) Transaction Exposure.
b) Transfer Pricing.
Q3) Write a note on contributions of multi-national enterprises with reference to the market. Highlight the criticisms levelled against the MNE’s.
Q4) Describe the objectives and functions of the World Trade Organisation. Comment on the organization structure of WTO.
Q5) Write short notes on any three of the following.
a) Global sourcing.
b) Ricardian theory of comparative advantage.
c) Non-tariff barriers to international trade.
d) Management of political risk in international business.
e) International Monetary Fund.
Q6) Case Study:
The globalization of the Indian economy has led to the establishment of a number of large and medium firms as licensing was not necessary. This resulted in the production of a number of goods, more than the demand in some cases. Consequently, some small scale units which were receiving Govt. protection became sick. The earlier sick units became mortal. Some examples in this category were textile units in Ahmedabad, electronic units in Delhi, consumer goods firms in Mumbai, AP Lightings, Anantapur, steel melting units in Hindupur, paper mills in Coastal Andhra and leather units in Chennai. Globalization resulted in the entry of a number of MNC’s in India through exports, joint ventures etc. in the addition, U.S.A and Malaysia dumped cooking oil, steel, electronic products etc. European countries exported milk and other agro-based products. These factors created a slump in the market due to excess supply. Further, the decline in employment opportunities affected the purchasing power of middle-class consumers adversely.
This created like China, S.Korea produced goods at a cheaper rate than India. This created havoc in the market. The policy of globalization was criticized by some. Other quarters of the industry felt that Indian business and industry should learn management techniques and focus on high productivity and low cost.
In the light of above answer the following questions:
1) Is globalization desirable for the Indian economy? Why?
2) How globalization will benefit Indian Consumers?
3) Identify the key areas wherein the Indian manufactures need to improve to enable them to compete internationally.
Q1) Discuss the importance of strategic marketing decisions in marketing planning with suitable examples.
Q2) In view of the foreign institutes entering India in near future, what strategic options you will suggest to Indian Management institutes to counter the possible competition? Your suggestions shall be based on SWOT analysis.
Q3)” Freebies and discounts are aimed at making loyal customers purchase more quantities in advance attracting non-users to try the product. However, with all major players offering freebies and discounts, this strategy is proving counter-productive’. Critically discuss this statement with examples.
Q4) Discuss with examples of how marketing mix strategies change within PLC stages of a product.
Q5) Write short notes on any THREE:
a) Export pricing strategy
b) Cost strategy v/s differentiation strategy.
c) Distribution strategy in declining markets.
d) International branding.
e) MLM and ethical issues.
SECTION – II
Q6) Explain with examples how the characteristics of rural market segments based on various criteria of segmentation.
Q7) Sachet packing is normally introduced to ultimately increase the demand for large packing. However, in India, sachet packing is contributing to almost 70% of the sales of FMCGs like shampoo and tea. Discuss this phenomenon with reference to typical characteristics of Indian rural market.