Con.

9538-13

(FURTHER REVISED COURSE )

(3 Hours)
[Total Marks : 60]
International Business

VT-14756

N.B. (1) Question No. 1 (case) is compulsory

(2) Answer any four questions out of the remaining six questions.
(3) Each of these questions (other than question 1) has internal choices
(a) or (b)
Please answer any one only. Each question carries 10 marks.
(4) In all, answer 5 questions, including question 1.
1.

Case : LG Electronics in Emerging Markets:

Korea became synonymous with high quality, innovative consumer
electronics products. Koreans beat established Japanese brands like Sony,
Sharp, Panasonic to
claim world leadership in most consumer electronics
products.
LF Electronics
LG Electronics pioneered the growth of Korean electronics industry
spurred by present Ponk Chung Hees vision for global leadership in key
industries like consumer
electronics, LG moved to capture the developed
markets by 1980s. However, their early forays failed as dealers in the west
relegated LG to the backroom, as they did not have the design, styling, brand
equity required by discerning customers in the west. Chastened by this, LG
invested in creating world class products. Since the home market was small,
Korean companies had to find foreign markets.
Foray to Emerging Markets
After failing to make any dent in the developed American/European
markets, LG
moved to Brazil in the 1980s and started manufacturing
television and VDRs in its
factory at Manaus and Taubate. In 1999, The
Brazilian Currency, Real became
unstable, forcing many foreign companies
to close, but LG stayed and converted Brazil
into a manufacturing hub of
North and Latin America. LG become one of the longest
exporters
from
Brazil. It localized its strategy, sponsoring the wildly popular Soccer
Championships there creating huge brand awareness and adopted a
premium
positioning for its products.
LGE India Ltd. Was established in 1997 with manufacturing in Greater
Noida, near
New Delhi. LG focused on customizing products to local
needs, though the product
platforms, design, engineering and R & D
remained in South Korea. Local R & D would
adopt to local conditions. For
example, its Golden Eye technology would
automatically sense the level
of ambient lighting and adjust brightness accordingly to
adjust
for
fluctuating power supply in India. It focused on rural markets with a
regional distribution system going to Tier-2 and 3 towns in India. It also
provided
mobile services centers, sponsored cricket matches and provided
excellent repairs
80% of local employees were Indians, only a handful of Koreans were in
top management positions. Only major investment decisions needed Head
Quarters
approval, the local office had freedom on day to day decisions.

LG Invested heavily in Russia by 1998-99; by 2004, it had several

localized offerings
such as a hot/cold air conditioner that could be used
around the year in 2005, LG received the Narodnaya Marka Logo meaning
it was considered a National Brand in
Russia.
LG entered China using strategy similar to India and Brazil by 202, it had
12
manufacturing plants in China. 98% of all personal were Chinese and
established a R & D center in Beijing in 2002, it remained in China despite
the severe SARS crisis
when
many
foreign
companies
fled,
demonstrating its sense of corporate
responsibility.
The Changing Landscape
(i) Competition within emerging markets became severe with Samsung
and domestic
players moving aggressively to gain market share. LG lost
market share to Samsung in some categories in these markets.
(ii) Japanese held their share in developed markets. Europeans
dominated the white
goods segment in USA.
(iii) Apple and other players leveraged their strength in software to
launch innovative
products in Consumer Electronics. LG wad very weak
in software. The competence in
consumer electronics was shifting from
hardware to software
Questions:
(a) What strategy did LG adopt in its globalization drive?
(b) How did LG succeed in Emerging markets?
(c ) Should LG remain focused on emerging markets since it has not
penetrated large parts of Africa and the Middle-East or should it continue its
quest for dominating the
developed markets of Europe and USA?
(d) Are the lessons learnt in the emerging markets transferable to
developed markets?
Attempt any four of the remaining six questions. Each question carries 10
marks.
(a) Discuss the International Product Life Cycle with suitable examples
10
OR
(b) Discuss the Key Provisions of WTO in International Trade.
10
Q.3. (a) Discuss the various modes of entry in International Markets with their
Pros and
Cons.
10
OR
(b) Globalization has led to huge income disparities- Discuss.
Q.4. (a) Discuss Porters Diamond model of National Competitiveness.
10
OR

(b) Explain some Non-tariff barriers in International trade with examples.

10
Q.5. (a) Discuss the role of Free Trade Areas in International trade.
10
OR
(b) Discuss ASEAN and NAFTA, explaining their relative advantages in
trade 10
Q.6. (a) China attracts several times the FDI as India- Discuss
10
OR
(b)
Discuss the theory of Comparative Advantage with suitable
examples 10
Q.7. Write short notes (any Two) :(i) TRIPS
(ii) Purchasing Power Parity
(iii) MERCOSUR
(iv) International HRM.
***********************************
Con . 9198-12
5977

International Business

TG

FURTHER REVISED COURSE

(3 Hours )
Total Marks : 60
N.B. :
(1) Question No.8. Case Study is compulsory and carries 20
Marks.
(2) Attempt any four from question Nos 1 to 7 each carry 10 marks.
1

What are the various strategies for entry and operation in international
business? Give suitable examples in brief for every strategy.

2. Explain Raymond Vernons Product Life Cycle Theory in international trade.

Illustrate how will it help developing countries.
3. Explain the characteristics of MNCs. How are they different from domestic
companies. How do MNCs take advantage in emerging economics like India
and how do thy benefit these economics?
4. WTO is more complex than removing non-tariff barriers and reducing tariff
barriers- discuss the above statement in the context of its various provisions
impacting developing countries.
5. Discuss various theories of Foreign Direct Investment.

6. Describe the Political, Social, Economic and other factors in the international
business environment. How do these affect the country selection for new
companies planning to enter international markets.
7. Answer any TWO of the following
a.
b.
c.
d.
8. CASE

Offshoring / Outsourcing in International Business

Dumping and Anti Dumping measures
Most Favored Nations (MFN)
E-Commerce
STUDY : -

Nestle with headquarters in Vevey, Switzerland was founded in 1866

by Henri Nestle and is today the Worlds biggest food and beverage
company. Sales at the end of 2010 were around CHF 100 billion with a
net profit of over CHF 8 billion. It employs around 230,000 people and
has factories in a almost every Country in the world.
History
In the 1860s Henri Nestle, a pharmacist developed a food for babies
who were unable to breastfeed. His first success was a premature
infant who could not tolerate his mothers milk or any other
substitutes. People quickly recognize the value of the new product
and soon Farine Lactee Henri Nestle was being sold in Europe. In
1905 Nestle merged with Anglo Swiss Condenses Milk Company.
By early 1900, the company was operating factories in US, Britain,
Germany and Spain, world War I created new demand for dairy
products in the form of government contracts. By the end of war
Nestles production was more than doubled.
After the war, governments contracts dried up and consumers
switched back to fresh milk. However Nestles management
responded quickly streamlining operations and reducing
departments. In 1920, Nestle saw first new products chocolates.
Nestle also felt the effect of world war II, the war helped with the
introduction. Of Nestles newest product- Nes caf which was the
staple drink for US Military. The end of the war was the beginning
of dynamic phase of Nestle Growth accelerated and companies
acquired. Nestles improved bottom line in 1984, allowed the
company to launch a new round of acquisitions. The most
important being American food giant carnation, the first half of
1990s proved to be favorable for Nestle as trade barriers crumble
and world markets developed into integrated trading areas.
Business principles / strategies
Since Henri Nestle developed the first milk food for infants in 1867
and saved the life of a neighbor s child, Nestle aimed to build a
business an sound human values and principles. While Nestle
corporate business principles will continue to evolve and adopt to
a changing world, basic foundation of the company is unchanged

from the time of the origin and reflects the basic ideas of fairness,
honest, and a general concern for people.
Questions:
i) How did Nestle follow a variety of strategies for expansion?
ii) How did the drives of globalization help Nestle to grow at a
faster rate?
iii) Why did
community?

Nestle

concentrate

on

responsibility

to

the

********************************

INTERNATIONAL BUSINESS UNIVERSITY 28 th Nov, 2011

Con. 5913-11

(OLD & REVISED COURSE)

EN-3442
FURTHER REVISED COURSE)
(3 Hours)
[ Total Marks : 60
N.B. : (1) Question No. 10 is compulsory and carry 20 marks.
(2) Attempt any five Questions including Question No. 10 which is compulsory.
(3) All other four questions carry 10 marks each.
Paper I
1. Define Globalisation . Explain with examples, the driving and restraining forces of globalisation.
2. Peter Drucker observed that while the international economy is regulated by national government,
the transnational economy is a borderless world economy regulated by global institutions.
Comment,
3. Export or physical movement of goods and services alone cant justify international business.
Describe various other market entry strategies with examples.

4. Why is FDI important for host and home country ?Discuss the FDI environment in India. Also
suggest how to increase inward FDI for the quicker economic development .

5. How can the Porters Diamond model of national competitive advantage be used to assess strategies
advantage for India in agro based product?

6. WTO aims at removing non tariff barriers and reducing tariff barriers, If so , critically evaluate
achievements and problem areas which WTO has to encounter in order to succeed in the above
objective.

7. Discuss any two of the international issues:

a) Intellectual property right
b) Current trends and application of purchase power parity theory.
c) Product life cycle theory in international trade.
d) G 20 and its impact on Indias foreign trade.
8. Most Favoured nation (MFN) status, boon or bane? revolution in international logistics have
shrunk the world into a global village. comment.

9. Examine opportunities for Indian business house to prosper in African bloc.

10. Case study ( Compulsory)

The public sector Indian Oil Corporation (IOC), the major oil refining and marketing company
which was also the canalizing agency for oil import and the highest ranked Indian company in the
fortune 500, in terms of sales, planned to make foray into the foreign market by acquiring a
substantial stake in the Balal Oil field in Iran of the Premier oil. The project was estimated to have
recoverable oil reserve of about 11 million tones and IOC was supposed to get nearly four millions
tones.
When IOC started talking to the Iranian company for the acquisition in October 1998, oil price were
at rock bottom ( US$ 11 per barrel ) and most refining companies were closing shop due to falling
margin. Indeed a number of good oil properties in the middle east were up for sale. Using this
opportunity, several developing countries made a killing by acquiring oil equities abroad.

IOC, being a public sector company, needed Governments permission to invest abroad. Application
by Indian company for investing abroad is to be scrutinized by a committee represented by the
reserve bank of India and the finance and commerce ministries. By the time the government gave
the clearance for the acquisition in December 1999 9(i.e. more than a year after the application was
made), the price had bounced back to US $ 24 per barrel. And the Elf of France had virtually took
away the deal from under IOCs nose by acquiring the Premier Oil.

The RBI, which gave IOC approval for US $ 15 million investment, took more than a year for
clearing the deal because the structure for such investment were not in place, it was reported.

1. Discuss internal, domestic and global environments of business revealed by this case.
2. How Elf, France could acquire Premier Oil in time? Even if Elf would not have acquired, what
would have been the impact of the delay in the clearance on IOC?
3. What are the major issues confronting the domestic government in concluding the overseas
investments of similar nature ? Please list out your solution in this regard.
4. What are the lesson to be learned of this case?

_________________________________________
UNIVERSITY QUESTIONPAPER
INTERNATIONAL BUSINESS
NOVEMBER 2010
N.B. : 1) Question No 8 (Case) is compulsory
2) Attempt any five questions including Question No.8 which is compulsory
3) All questions carry equal marks.
1.

International Business is more complex than Domestic Business. Define International

Business; State its objectives and give an overview of International Business
comparing it with domestic business.

2.

a)

Explain David Ricardos Theory of Two Country Two Products Model of

International Trade theory. State the limitation of the theory

b) Explain the salient features of Modern Strategic Trade Theory and compare it with
Theory of Natural Advantage and Theory of Acquired Advantages.
3.

Country Risk and Political Risk Studies are important before one enters International
Business. Explain in detail the process of Country Risk and Political Risk analysis.

4.

Define Globalization. Explain in detail the process of Globalization, the stages and phases
of Globalization and the Role of FDI in Globalization.

5.

WTOs main objective is to promote world trade. Trace the history of WTO. State five
basic principles of WTO explain the organizational structure of WTO and its impact (both
positive and negative) on India

6.

Multinational Corporation is regarded as Double Edged Sword to any economy. Define

MNC. Discuss various models of MNCs state the advantages and disadvantages of MNC
highlighting the problems faced by MNC and its role in Economic Development of India

7.

Write short notes on any thereof the following :a) PPP (Purchase Power Parity) Theory and its role in International Business.
b) NAFTA Trade Block
c) Five Environmental factors in International Business
d) Three different modes of doing International Business other than imports and
Exports.

8.

CASE STUDY : Who will be Master of Planet Retail

SAM WALTON began Walmart, the worlds largest retailer, in 1962. Head quartered in
Bentonville, Arkansas Walmart was built on the policies of Everyday low Prices and a 100
percent customer satisfaction. Guarantee. Walmart provided the lowest prices, on average, among
American retailers, and directed the organization to achieve superior customer satisfaction. He had
previously worked for the JC Penney Company and it has been reported that Mr.Penney once told
Sam that he did not have a future in retailing. Waltons views on retailing were iconoclastic and
industry defining in the Untied States.
With over 3,000 stores in the United States Walmart has begun an aggressive expansion
into the international marketplace. Walmart has over 1,500 stores in Canada, Mexico the UK,
Germany, South Korea, China, Brazil and Argentina, it also operates a small number of stores in a
few other counties through joint ventures, walmarts recent entry into the European market
(Primarily through acquisition )has caused anxiety, and in some cases panic, among European
retailers. Walmart has larger sales than its major competitors Carrefour, Metro AG and Ahold
combined. Approximately 80 percent of Walmarts stores are in the United States.
Carrefour, the second largest retailer in the world, was started in France when two brothers
Jacques and Dennis Deforey, who were in the grocery business partnered with Marcel Fournier,
who owned a department store, known for its extreme attention to detail and the ability to cater to
local tastes, Carrefour established itself as the major retailer in Europe. Carrefour now has over
6,000 the Caribbean, Africa and the Middle East. Carrefour attempts to localize its operations as
much as possible and uses few expatriates. Approximately 80 percent of store sales come from
outside its home country, France.
Carrefours global strategy involves careful study of local markets and careful attention to
local customs. For example in China Carrefour cuts its vegetable vertically, not horizontally, to
avoid an image of bad luck among its Chinese customers. Carrefour has been a pioneer in the
concept of Store Clustering internationally, altering its product mix, store facilities, and prices to
suit different economic regions, Carrefour is the largest foreign retailer in China and sees the Asian
market as critical to its continued success. Carrefour has 226 stores in Asia, compared to Walmarts
59 stores. One quarter of Carrefours new store growth comes form the Asian market.
Walmart is much stronger company financially and it has deep prockets for international
expansion. Its everyday low price concept has been a very viable strategy, and Walmart pioneered
creative and successful approaches to supplier management and technology integration. In the
United States, Walmart has huge scale economies and excellent logistical operations. In terms of
domestic operations, Walmart has a very impressive 22 percent return on shareholder equity.
Internationally, walmart has experienced less success. International sales account for only
about 20 percent of Walmarts total revenue and its return on assets for international operations has
been considerably lower than for its domestic operations. In Europe, Walmart faces strong unions.
Increases regulatory constraints, and weak scale economies, the ability to export its everyday low
price concept oto Europe is being challenged, especially in Germany. The everyday low price
concept has also not been effective in Japan, where Walmart operates a joint ventures with Seiyu.
Man Japanese associated low prices with lower quality goods.
The worlds largest retailer hopes to match its domestic success internationally, and many
analysts believe it has the financial and managerial ability to do so. On the other hand, Walmart
lacks the international experience of Carrefour and is a latecomer in many markets where
Carrefour is well established.
Questions :

1) Which international strategy does Walmart follow? Which international strategy

does Carrefour follow? Which do you feel is a better strategy for global
expansion?
2) Can Walmart Learn anything from Carrefour? Can Carrefour learn anything
from Walmarts success? Explain.
3) Which retailer, in your opinion, will win the battle for global leadership?
*************************************

CON . 4979-09

INTERNATIONAL BUSINESS-2009
(3 HOURS)

DS-5729

TOTAL MARKS :60

N.B. 1) Answer any four questions out of seven questions.
2) Question 8 (case ) is compulsory.
3)Candidates are required to give clear concepts, illustration, examples and analysis.
1. Multinational Corporations contribute immensely for the development of
economies in the world-discuss with illustrations.
2. discuss the various methods and models of entering and operating in
international business with merits and demerits of each method.
3. 3.what do you mean by risk analysis and , to what extent companies use this
tool for framing policies in international business both at the time of entry and
operation ?
4. Write short not on the following:-a) Balance of Payment
b) Free trade Agreement
c) Trade Barriers
d) International Logistics
5. Foreign Direct Investment has become an effective resource mobilization
avenue as compared to foreign Institutional investment. Justify the statement
with example and criteria for selecting investment destination from investors
point of view.
6. ASEAN region is as attractive destination for India for trade, investment and
manufacturing specially, in recent period.- Discuss the statement with
business opportunities and challenges.
7. Competitive advantage of nation , pronounced by Michael Porter has a
complete functional value, management inputs and strategic relevance in
todays Global Business.-Discuss the statement with illustrations.

8. CASE STUDY :
Pharma Offshoring Market : A Bright
Future for India
Business Process Outsourcing, Knowledge Process Outsourcing and Legal Process
Outsourcing have dominated Indian scene in the current decade. During the close of current

decade India will witnesses an another major sunrise segment in the business is Fharma
Offshoring.
Pharmaceutical offshoring in the country is poised to become a$ 2.5 billion, nearly Rs. 12,000/cror opportunity by 2012, according to Zinnov Management Consulting.
A beneficiary segment, the already booming clinical trials industry, alone will set to become a $
608-million (nearly Rs 3,000 crore) industry by 2012.
RISING R & D COST ABROAD
A key driver of offshoring or outsourcing is the rising cost of R & D destinations such as India,
China and other Asian Countries. On the uptrend is the offshoring of processes of the entire drug
development value chain. Other areas are clinical trials, discovery research ,clinical data
management, bio-statistic, medical writing, marketing and sales.
TAENT AND COST RELATIONSHIP
Offshoring itself is aided by the rich pharma talent pool of 13.5 million science graduates and the
spread of pharma educational institutes. There may be a demand for 1.6 lakh pharma translators by
2010, spurred by increased number of clinical trials that global majors are conducting in the
country.
Another incentives, is the cost of basic production in India , which is up to 50% lower than in the
US FDA approved plants. It can be achieved at 30-50% lower cost than in the established markets
in Europe. Contract manufacturing worth $ 680 million was done in India in 2008 and may grow at
15%.
Tax incentives, though laws on data security and intellectual property related issues have also
helped along with approval of fharma SEZs, all enabling the growth of the Pharma industry,
according to the report of Indian Pharma Offshoring Landscap (POL).
Zinnovs CEO, Mr. Pari Natarajan said, Today, pharmaceutical space is one of the most
happening industries globally and India has a potential to become one of the key global player and
also backbone of Offshore services . the influx of outsourced work from global pharmaceutical
companies has given the necessary impetus for the creation of pharma SEZs which would be one
of the key drivers of outsourced Pharmaceutical services growth in the coming years.
The domestic drug industry, growing at over 7% CAGR is heading towards a $ 12 billion, nearly
Rs.54,800 crores approximately. By 2010, it is expected to shift from being domestic led to export
driven. All the Indian companies such as Cipla, Torrent, Cadila, Himalayas, Dr. Reddys Lab and
Arabindo Pharma are physically present in every continent in the world. This has brought goodwill
through Indian capability in this space.
Mr. Rishikesh Mandilwar, the Director, Zinnov, said, Clinical trials today dominate the
offshoring market landscape followed by clinical data management. Marketing and sales is the
another key component of the drug development value chain and is currently a $ 100 million
market, which is expected to grow at a CAGR of 36% till 2012.
Yet , Indian Pharmaceutical companies need to penetrate further in the generics market in the
regulated countries and also increase their investment in R & D to gain expertise in higher value
chain process. In the BPO and KPO segment , India was well prepared to focus well before other
counterparts and grabbed the business opportunities against it, counterparts. A number driver such

as policies, education, business environment , infrastructure ,stability of the government and

payment modes play a catalytic role to bust this sector in India. The concern is, Well India
maintain the current dominant position consistently for the whole decade next ?
Questions :
1.
2.
3.
4.

Discuss the competitive advantage of India in pharma Offshoring markets.

Name major potential players who can succeed in such an avenue.
Discuss various strategies that can be adopted to win offshoring business.
Briefly mention various functions involved I pharma offshoring.

---------------------------------------CON. 5273-08
BB-8525
Duration : 3 hours

INTERNATIONAL BUSINESS- 2008

UNIVERSITY QUESTION PAPER
[ total marks : 60]

N. B. 1) Answer any four question s out of seven.

2) Question 8 case is compulsory.
3) Candidates are required to give clear concepts, illustrations, examples and analysis.
1. What is globalization? how to global organizations emerge to enjoy global
leadership in their business ? Give relevant current illustration from the global
organizations.
2. Why do companies and the countries enter into international business when
the opportunities exist in the domestic business?
3. Write short note on :a) Foreign exchange risks.
b) Trade barriers .
c) Intellectual property rights .
4. Modern trade theories are essential for formulating business strategies at
macro level in companies - discuss in detail only relevant three trade
theories.
5. Discuss major objectives, agreements and achievements of WTO and the
issues encountered by WTO at the end of Dora round.
6. NAFTA is emerging as an effective trade partner for India despite of global
slow down if so, categorize major sectors and business opportunities for
Indian business houses to prosper in future in the NAFTA bloc.
7. Enumerate all the challenges encountered by global human resources division
operating in cross border business environment .

8. Case study :

FIPB (Foreign Investment Promotion Board ) nod for 30 FDIboosting proposals

Foreign direct Investment destinations are changing. Investors are now opting for long
term projects.
The slow down is major challenges throughout the world . despite all these facts India is the
offering a great holding companies have been cleared by the Foreign Investment Promotion
board (FIPB) in the past couple of months . the proposals involve conversion of an operating
company into a operating cum-holding company (OHC) to facilitate downstream investments.
The move is significant since it could boost FDI inflows at a time FII money worth $ 12 billion
has left the bourses. The clearance of such proposals increased at least 50% this year compared to
last year.
The board is also providing clearances to companies that have made downstream investment
without prior permission. Clearance with retrospective effect is being provided in such a cases
subject to investment policies of RBI.
Some holding company proposals approved by FIPB in the last two months cover projects such as
Essar Global Asia Motor-works, Adani Power, Mauritius-based private equity major TPG
Holdings, Suzio Energy and Krishnapatnam Port.
FIPB last week cleared Asia Motor-works proposal for induction of foreign capital worth Rs 590
crores from Essar Global through formation of a holding cum-operating company. The Indian
company would now issue convertible debentures and preference share to Essar Global worth Rs,
590 crores .
Similar approvals were given to TPG to make downstream investments worth Rs 800 crores
through a holding company for carrying out investment operations in India. The board also
approved Suzion proposal to setup a holding company to make downstream investment in wind
turbine energy systems. With FIIS pulling out, officials feel FDI is the only route for boosting
capital flows. Hence, approvals are being put on fast track.
The expedite clearance of FDI proposals , the board is also rejecting objections raised by the
revenue department. Overruling objections from the department of revenue , the Essar Groups
Cayman Island-based holding firm Essar Global received FIPB approval for its proposed
investment in trunk making company, Asia Motor works. In many other cases, the board has given
clearance with the observation that the department could continue with investigations. Once FIPB
was cautious in approving every proposals. Now it has become so liberal. There are so many
initiatives taken by both the central and state government to attract
FDI. Still the confidence level is low amongst American and European investors before deciding to
invest in India as compared to other counterparts . hence , holding companies of business houses
of India are slowly becoming major investors and such as investment becomes a boon while major
chunk of the capital is pulled out by FIIs.
Question:
1. Enumerate various parameters the investors considers prior to investing in any
country.
2. Discuss the difference between Foreign Institutional Investment (FII) AND
Foreign Direct Investment (FDI) and why FIIs are pulling out the investment
from India .
3. Name few sectors in India and the reasons for attracting FDI as a fast track
capital flow.
4. Categorize five major challenges still hampering FDI inflow.

--S----- -- -------Best of Luck-----------------S

Con 215408
BB--7195

International Business -2007

University Question Paper

Total Marks : 100

Note 1) Question number 8 is compulsory
2) Answer any five question including question no. 8
3) All question carry equal marks.

1.

What is international Business ? State and explain the forces that are

helping internationalization of business. Can it be said that international

business has not only encouraged global growth and prosperity but has also
resulted in creation of international financial stability. Explain with examples.

2.

Define country risk and state , how political and economic risk

associated with a country can be evaluated?

3.

By using appropriate examples, explain various mode of entry into

international business.

4.

In your opinion which contemporary international trade theory is most

relevant and practical for the purpose of explaining the reasons for growth in
world trade? Give reason for your answer.

5.

Why is FDI considered important for developing countries. What are the

factors that contribute to the growth of FDI or FII investments in an economy?

In your view among the two which type of investment is better for India and
why?

6.

Appreciation of rupee has created trouble for Indian exporter and certain

companies state and explain , how pharma export companies and BPO/KPO
sector companies can deal with this scenario?

7.

Write short not on any two of the following :--

a)
b)
c)
d)

8.

EMU
TRIPS
US recession and its impact on India
Reason for increased M&A activities of companies from BRICS countries.

Case Study:

Indian companies have been acquiring businesses abroad at a dazzling pace,, and have been on
a buying spree in US and Continental Europe in their quest to become global players. Indian
outbond deals, which were valued at US $0.7 billion in 2000-01, increased to US $4.3 billion
in 2005, and crossed US $15 billion in 2006. Almost 99 per cent of acquisitions were made
with cash payments. These acquisitions cover the entire spectrum from small software
companies acquired by our IT majors for a few million dollars, to the mammoth deals such as
TATA-Corus for US $ 12 bn.
This enthusiasm for M& A must be set against the harsh realities, that most acquisitions
worldwide fail to create value and are typically nothing more than a wealth transfer to the
shareholders of the target firm. BCG consultant, Mark Ironer, an internationally acclaimed
experts in the field of mergers and acquisitions found that two-third of the 168 deals between
1979 and 1990 which he analysed, destroyed value for shareholders. A report published by the
Boston consulting group in July 2003 indicated that out of the 277 big M & A deals in
America between 1985 and 2000, 64 per cent destroyed value for the acquirers shareholders at
the time of announcement and 56 per cent continued to do so two years after the deal. Quit
clearly, major acquisition have to be handled carefully because they leave little scope for trail
and error and are difficult to reverse. The risk involved are not merely financial. A failed
mergers can disrupt work processes, diminish customer confidence, damage the companys
reputation causes employee to leave and result in poor employee motivation levels.
Acquirers often make two major blunders. One is the tendency to lay too much stress on the
strategic, unquantifiable benefits of the deal. This result in overvaluation of the acquired
company leading to what is called the winners curse. The second is the tendency underestimate
the challenges involved in integration. As s result, the actually realized synergy turn out to be
short of projected ones.
Many companies confidently project substantial cost saving before the merger. But the
underestimate the practical difficulties involved in realizing them. For example, a job may be
eliminated, but the person currently on that job a may simply be shifted to another department.
As a result, the headcount remains impact and there is no coast reduction.
Sometime merger is finalized hoping that efficiency can be improved by combining the best
practice and core competencies of the acquiring and acquired companies. Cultural factors may,
however, prevent such knowledge sharing. The Daimler Chrysler merger is a good example. If
generating saving is not easy, revenue growth the reason given to justify many merger- is
even more difficult. In fact, growth may be adversely affected after a merger, if customer or
competitor reaction are hostile. When Lockheed Martin acquired Loral, it lost business from
important customer such as McDonnel Douglas, who were Lockheeds competitors .So
companies must also look at the acquisition in terms of the impact it makes on competitors and
the possibility of their retaliation.
In India, too some acquirers have got into trouble because of the high premium they paid. Tea
reportedly paid 100 million more than the second highest bidder when it acquired the UK
based Tetley for 274 million in a leveraged buyout. To service the additional debt burden

which, Tata Tea took, the company needed to realize cash flow of at least 48 million per
annum whereas cash flow where only
29 million in 1999. Almost immediately after the
acquisition , the situation turned worse when retail prices fell in the UK. In 2001, the Tatas had
to inject an additional 30 million to restructure the debt which was becoming increasingly
difficult to service. During the year, Tetleys cash flow were only 26.4 million, the interest
payout being 23.3 million.
In their obsession with growth, companies often strike M&A deals of questionable merit.
A dispassionate analysis of the potential benefit and pitfalls involved is important before
going ahed with a merger.
1. State and explain the dangers which are involved in an international merger
and acquisition deal.
2. Explain how pitfalls involved in M&A can be avoided by the Indian companies.

--------------------------------------------------------

CON / 201307
BB-8774

INTERNATIOANL BUSINESS -2007

MMS IV SEM UNIVERSITY QUESTION PAPER
(3 Hours)
[Total Marks :100]

N.B. :1) Question No.8 is compulsory.

2) Answer any five questions including Q. No.8.
3) All question carry equal marks
1) Discuss the economic, culture, social political and technological
environment of International business as it prevails toady. Draw lessons
for Indian companies wishing to go global.
2) Why is FDI important for host and home country ? Discuss the FDI
environment in Chain and Indian. Draw lessons for India to increase
inward FDI.
3) Discuss the contemporary theories of international trade with suitable
example. How can the Porters Diamond Model of competitive advantage
be used to assess competitive advantage for India for fresh fruit and
vegetable?
4) Why is Rupee strengthening with respect to Dollar in the last few weeks?
What are the tools available to India export companies t protect them
from the risk of falling dollar?
5) Multinational Enterprises are a bane or boon ? justify your answer with
examples. Discuss the example of an Indian multinational, which has
helped the host country, company and India.
6) Discuss any two of the following
a) Honkong round of WTO negociations
b) Ethnocentric and Polycentric orientation of MNEs
c) Political risk analysis
d) Country selection for international business.
7) Write short note on any two of the following:

a) Green and Amber Subsidies under WTO

b) IMF and World bank
c) SAARC and SAFTA
d) Types of multilateral agreements
8) Read the case How the new multinational are remarking the old given
bellow and answer the following questions.
a) What has led to the rise of multinational enterprises (MNEs) from
developing countries?
b) How should MNEs from developed countries response to the emerging
challenges ?

How the new multinationals are remaking the old

While globalization has opened new market to rich-world companies, it has also
given birth to pack of fast-moving, sharp-toothed new multinationals that is emerging
from the poor World.
Indian and Chinese firms are now starting to give their rich-world rivals a run for
their money. So far this year, Indian firms, led by Hindalco and Tata steel, have
bought some 34 foreign companies for a combined $ 10.7 billion . Indian IT-services
companies such as Infosys, Tata Consultancy Services and Wipro are putting the fear
of God Into the old guard, including Accenture and even mighty IBM, Big Blue sold
its personal computers business to a Chinese multinational, Lenovo, which is now
starting to get its act together. petroChina has become a force in Africa, including
controversially, Sudan, Brazillian and Russian multinationals are also starting to make
their mark. The Russian have outdine the Indians this year, splashing $ 11.4 billion
abroad, and are now in the running to buy Alitalia, Italys state airline.
These are very early days, of course. Indias Ranbaxy is still minute compared with a
branded-drugs maker like Pfzer, China Haler, a maker of white goods, is a minnow
next to Whirlpools whale. But then new multinationals are bent on the course taken
by their counterparts in Japan in the 1980s and South Korea in the 1990s.Just as
Toyota and Samsung eventually obliged western multinationals to rethink how to
make cars and consumer electronics, so todays young thrusters threaten the veterans
wherever they are complacent.
The newcomers have some big advantages over the old firms. They are
unencumbered by the accumulated legacies of their rivals. Infosys rightly sees itself
as more agile than IBM, because when it makes a decision it does not have to weigh
the opinion of thousands of highly paid careerists in Armonk, New York. That , in
turn, can make a difference in the scramble for talent. Western multinational often
find that the best local people leave for a local rival as soon as they have been trained,
because the prospectus of rising to the top can seem better at the local firm.
In developing countries multinational trends to spend better working practices and
environmental conditions, but when emerging country multinational operates in rich
countries they tends to adopt local mores. So as those companies globalize, the
difference are likely to narrow
Cost is not big an advantage to emerging-countries multinationals as it might seem.
They compete against the old guard on value for money, which depends on both price

and quality. A firm like Tata steel, from low cost India, would never have bought
expensive, Anglo-Dutch Corus were it not for its expertise in making fancy steel.
A world that is not governed by cost alone suit them, because the already posses a
formidable array of skills such as managing relations with customers, polishing
brands, building up know-how and fostering innovation.
The question is how to make these count. Sam Palmisano, IBMs boss, foresees
nothing less than the redesign of the multinational companies . in these scheme,
multinational began when 19th century firms set up sales offices abroad for goods
shipped from factories at home.
Firms later created smaller Mini Me version of the parent company across the
world.
Now Mr Palmisano wants to piece together worldwide operatons, putting different
activities wherever they are done best ,paying no heed to arbitrary geographical
boundaries. That is why, for example, IBM now has over 50,000 employees in India
and ambitious plan for further expansion there. Even as India has become the
companys second biggest operation outside America, it has moved the head of
procurement from new York to Shenzen in Chaina.
IBM is even now trying to wash the starch out of its white-shirted management style.
But today, general electric alone seems able to train enough of its recruit to think as
GE people first and Indians, Chinese and American second. Lenovos decision to
appoint an American, William Amelio , as its Singapore based chief executive, under
a Chinese Chairman, is a hint that some newcomers already understand the way
things are going.
Many of the barriers that stopped cross border commerce have fallen. And yet, Mr.
Palmisanos ideas also depends on the fact that the terrains decidedly bumpy.
Increasingly, success for a multinational will depends on correctly spotting which
places best suit which of the firms activities. Make the wrong bets and the worlds
bumps will work against you. And now that judgments, rather than tariff barriers,
determines location, picking the right place to invest becomes both harder and more
important.
Nobody said that coping with new brood of competitors was going to be easy, Some
of todays established multinational companies will not be up to the task. But other
will emerge from the encounter stronger than ever. And consumers, wherever they
are, wil gain from the contest.
****************************
CON/2211 06
BB10917

INTERNATIOAN L BUSINESS-2006
Duration 3 Hours
[total marks-100]

N. B. : 1) Question No. 1 compulsory.

2) Attempt any four Question out of rest.
3) All question carry equal marks.

4) Draw suitable diagram to support your answer.

Analyze the case given below and answer the question using the concepts of International
business.
DIXON INC
Dixon Inc. is one of the oldest companies in U.S. with a flagship product of pencil which was
introduced in 1913. The turnover in 1995 was U.S $ 100 million. The American bought an
estimated 4.2 billion pencil in 1999 which was 53% higher than 1991; but an increasing
proportion of these come from china.
China entered the American pencil market in 1991 and by 1994 had 20% share of American
market.
In 1995 U.S. government was persuaded by Dixon to levy Anti Dumping Duty on Chinese imports
of pencil and the imports temporarily fell, but the Chinese kept on making better and cheaper
pencils and by 1997 achieved the market share levels of 1994. The Chinese were aggressive in
marketing pencils in U.S. and to add to the problems, exports of Dixon Inc also fell drastically by
about 200 million units in 1991 figures.
By 1999, U.S. imported 50% of its requirement of pencils from China which forced the U.S.
Government to impose a whooping 53% Anti Dumping Duty in 2000 on Chinese pencils.
However it did not give major boost to Dixon as expected.
Dixon Including the decade tried to experiment with cheaper ways to make pencils. The company
shifted from California incense cedar wood ( which was expensive raw material)to Indonesia
jelutong wood. Dixon also started buying erasers for its pencils from a Korean supplier instead of
traditional local source.
During all this time it not only lost its shares to cheap imports but also losing money and it
strategically started a new Manufacturing unit in Mexico a NAFTA A partner. The original idea
was to supplement the U.S. set up but with a view to be more aggressive it expanded Mexicos
unit and started reducing production of its home base, U.S.
In the year 2001.Dixon created a wholly owned subsidiary in China to manufacturer wooden saltsa processed raw material for manufacturing pencils. These salts were exported by Dixon form
China to Mexico where they were turned into pencils. The graphite lead for pencils is still made in
USA; but erasers are shipped from Korea.
The Chinese subsidiary of Dixon also produces and sells its products internationally. By 2003
Dixons performance registered a significant improvement but , the company decided to be
aggressive in international business and it shut down its U.S. manufacturing base at Sandusky,
Ohio and expanded it production in Mexico and has also started manufacturing pencils form its
China venture.
Questions:
1) Why do you think that the Chinese apparently have a cost advantage in the
production of pencils?
2) Do you think that lobbying in the U.S. government to impose antidumping
duties on imports of pencils from China is good way to protect U.S. jobs? Who
benefits more from such duties? Who lose?
3) Why has Dixon become a multinational company? What are economics benefits
to Dixon of going global?

4) Why does it not simply imports finished pencils from China to the Unite States,
instead of making those pencils in Mexico?
5) What is the role of tariff and nontariff barrier in the whole process?

I.
II.

III.

IV.

V.
VI.

VII.

State the objectives of international business. Give an overview of various

methods of doing international business with suitable practical examples .
State the advantages and disadvantages of FDI to the home and host
country?
List out the problems faced by MNEs in the hone country and the problems
faced by host country due to MNEs.
Risks are inevitable in international business. The success is totally
depending on the techniques of handling risk at every stage justify with
example.
WTO was formed to foster international trade. State principles objectives of
WTO and list at list 10 objectives monitored by WTO. Discuss the impact of
WTO on India and other developing nation with special reference to HONG
kong Ministerial Conference.
What is meaning of globalization? Categorize manufacturing and servicing
sectors of India having global competitive advantages.
Write short note on :a) Explain salient features of any two Regional Trade Agreements (RTA)
b) Discuss general characteristics of intellectual property rights (IPR)
Write short notes on :--a) David Ricardos two country- two products theory.
b) Purchasing power parity theory.

=======================

CON 215805
BB-8242
Duration 3 HOURS

I NTERNATION BUSINESS-2005
UNIVERSITY QUESTION APER
[TOTAL MARKS]:100

N.B. 1. Question No. 8 is compulsory.

2. Attempt any four questions from the remaining.
3. All question carry equal marks.
1. International business is more complex ad different from domestic
business explain the difference by using ten functional parameters.
2. Multinationals and FDIs have become an integral part of developing
economies like India. State the merits and demerits of permitting MNCs
and FDIs from international experiences witnessed by few nations during
the previous decade.

3. Explain with practical illustrations international product life cycle

theory propounded by Raymond Vernon. Discuss similarities and
contrast aspects of PLC theory with David Ricardos two product and two
country model.
4. Export or Physical movement of goods and services alone cannot justify
International Business. If so discuss other modes of international
business with examples.
5. WTO aims at removing non tariff barriers and reducing tariff barriers. If
so critically evaluate achievement and problem areas which WTO has to
encounter in order succeed in the above objective.
6. Answer any two of the following :--a) Doing business with expanded Europe.
b) Doing business with ASEAN.
c) Doing business with China.
7. Discuss any two of the international issues :-a) Intellectual property rights.
b) Current trends and application of Purchase power parity theory.
c) G 20 and impact on Indias foreign trade.

Case :

8.
CRAZY LEATHER-where to invest
and grow?
crazy leather a 20 million dollar export turn over company located in Chennai has

become a successful Leather goods manufacturing company today. Mr. Prsad, 55

years old self mode business man started this company in 1975 as trader of
footwear, had ups and downs in the 1980s and finally made a strong network in
Europe and North America. BY 2000 he launched a wide range of leather jackets
which lured thousands of new customers. Leather jacket as a product, has few extra
advantage as compared to footwear (i) premium price (ii) few competitors (iii)
scope of new design and style (iv) cold and affluent countries are the markets.
Therefore Prasad has now a product focus. But there are few limitations while the
product moves from India from business angle, through India has a raw material
base, cheep labour and favorable government policy.

Western countries do not pay high price due to Indias inability to build brand for
leather jackets. Fashion and design aspect percolate to India late. Hence Indian
manufacturer fails to skim the market. While Italian brands command high price
countries like Pakistan and Ethiopia inter into many markets by quoting ridiculously
low price for their jackets. Indian manufacturers, including Crazy Leather have to work
out different strategy to sustain in the world market.
The option is, to expand business by setting up overseas manufacturing unit. Mr. Prasad
has selected two locations as an outcome of six months study and planed o start leather
jacket production by Jan 2006 One ideal destination should be immediately finalized
for manufacturing 60,000 jackets per year.
Parameters
K ENYA
ITALY

Investment
Labour
R. Material
Demand in the market
Govt. incentive
Bureaucracy
Productivity
Ownership

Minimum ($ 1 m)
Cheap ($ 2/day )
Available nearby
Local-Nil-only export
In many forms
High
Only through workforce
Wholly owned

5 times higher
20 times higher
Imported form Faroff
Huge, the whole Europe
Nil
Low
Through automation
Only through local
partner

QUESTIONS :I)

What kind of business approach Crazy Leather should have to set up an

unit in Italy?

II)

By investing in Kenya, will Crazy Leather have cost advantages? Categories

them.

III)

Apply Posters model of Competitive advantages of nations to both the

destination.

IV)

Enumerate the risk which are involved in the business operations both in
the Kenya and Italy.

=====================