SAMPLE QUESTION PAPER

International Business Semester: 4

PART A (Compulsory) Read the following scenario and answer BOTH questions that follow. Emley Telecommunications Emley Telecommunications was founded in the UK in 1976 when Richard Castle left the UK multi-national GEC to start a small business to provide specialised telecommunications services. During the late 1970s planned developments moved the company into manufacture. Major changes in the UK in the mid-1980s resulted from the privatisation of British Telecom (BT). Other changes in the UK developed from an accelerated interest in various form of voice and data communication. For example, image transmission through fax, voice transmission out of home and office by cellular and telepoint systems and data transmission by the use of modems. Various predictions indicated that telecommunications would be a major world growth market for years to come. Telecommunications during the 20th Century has been characterised by stability and by market regulation. The need to establish a national specification and the need for a common infrastructure of public switching equipment and transmission equipment (from simple paired wire cable to optical fibres and satellites) resulted in the establishment of nationally controlled telephone organisation. These are often referred to as PTTs. The 1980s marked substantial change. Some PTTs were privatised (e.g. BT in the UK). BT has changed their corporate strategies and has also changed their buying practices. In addition, technical specifications have moved towards common European Union (EU) and world standards. In 1988 the OSI (Open Systems Interconnection) system was established to agree a common standard. PTTs and major business customers will only buy products build to the OSI standards. In 1996, Emley Telecommunications evolved to become a hi-tech business with good R&D capability, especially in the computer software area. Richard Castle is still the main owner of the family business and as Managing Director he also oversees technical issues. The company now employs 128 people and achieved a turnover of 15.3 million in 2003. The main business area for Emley Telecommunications is in the manufacture of modems. These are used to transfer data from one computer to another. The simplest way to transfer data is through the telephone system that was originally meant as a voice system with no provision for carrying data. The first data communications devices overcame the problem by turning the computers digital pulses into audible tones, similar to the human voice, so they could travel down telephone wires. The process of conversion is known as modulation and re-conversion demodulation. The instruments used, taking the first letters of each stage were called MODEMs (MOdulator and DEModulator). Emley Telecommunications has been at the leading edge of technology in developing faster speeds of data transmission and in ensuring high quality transmission. More recently, the company has put a lot of R&D effort into broadband developments. Until the late 1990s, the company has concentrated on the UK market and in 2004 still depends for 63% of its sales in the UK. An export strategy of market expansion was started in

1994 and Germany was targeted first, followed by Holland, Belgium and Denmark in 2001. Richard Castle was anxious to build export business by further market entry. Whilst previously concentrating on Modems, Emley Telecommunications had recently entered the market for integrated consumer telephone services branded watchdog linking the telephone with home security and computer control devices to regulate heating and ventilation, cooking and so on. This market was new and expensive to develop. The German agent has suggested that this integrated approach would have a good potential in professional services like lawyers, accountants and architects. Richard Castle knew from UK experience that telecoms buyers were much more price sensitive that datacoms buyers. He was, therefore, anxious to position his new product as a data control product rather than a grand telephone system. After discussions with his Marketing Director and his UK and Export Sales Managers it was decided to enter the German market and the French market with their new watchdog product. They were aware that their existing agents wanted to take watchdog. However, the Export Sales Manager, Andrew Milner, was not sure that this was the best approach for a new product. ANSWER BOTH QUESTIONS In the role of Andrew Milner, Export Sales Manager: 1. What criteria would you use to assist you in making a decision on whether or not to use the existing agents to handle the introduction of watchdog? Evaluate the relative importance of your identified criteria. (33 marks) 2. Explain how you would decide what features should be built into watchdog for the French market and the German market. (33 marks) PART B ANSWER ONE QUESTION 1. The WTO is the right organisation to set rules on investment flows. Critically analyse the statement considering issues of national sovereignty and pride. (34 marks) 2. Innovation is the key to creating a differentiating factor for your business and the products or services that you offer to your markets. Evaluate the role of innovation in a global market. (34 marks) 3. Globalisation has been instrumental in creating a common culture, especially amongst the younger generation, with tastes in consumer products and services being quite similar. Discuss whether this has lead to a situation where a cultural analysis of the market is no longer required as part of the decision making process in international business. (34 marks)