Contemporary Development in Business Management

Exam structure
Part 1 (50%) 5 out of 10 short-answer questions Part 2 (50%) All three questions on 1 out of 3 themes
This is an open book examination. You can take into the exam hall, up to ten sheets (therefore twenty sides - double sided) of A4 white paper with handwritten (or typed in font size 8) notes.

Five questions only!

Part 1 (50%)
5

out of 10 short-answer questions range of topics

Full

Approx.

15 mins. per question

Refer sample questions handout

Part 2 - - - 50%! All three questions on 1 out of 3 themes

International economic factors Newly-developing countries Knowledge management

One theme only!

(Refer exam brief given to you)

ANSWER TO THE QUESTIONS!!!

READ CAREFULLY and answer to the question

Do not write tons or irrelevant things to

show that you know

Before writing: Think, plan, select the information

E.g. write down key points on a draft

Write only relevant information!

Part 2 all three question on one theme 50% 1.5 hours !!

a) General and introductory
In relation to a range of industries what are some of the main effects of.

relatively easy!

b) Organization/industry-specific

In greater depth explain how the work of ..has impacted on your chosen organization or industry.

More difficult !

c) Evaluative

Critically assess and evaluate how your chosen organization or industry has responded to..

The most difficult but shortest part (See past papers esp. Oct. 2010)

Different questions / Different levels of analysis

1.

Deeper levels of analysis!

1.

What are some of the main ways (Description / explanation /main points) Analyze how (mechanisms) Critically evaluate how

2.

1.

2.
3.

Description (how things happened) Analysis (why things happened this way) Critically evaluate:
Your own evaluation based on the analysis! Show that you understand different side of

argument Show different sides: advantages and disadvantages, costs and benefits Your own final evaluation / recommendation

Short-answer questions
15 mins. each (approx.) See sample questions Marks awarded for relevance, knowledge and application!
Answer to the question!
Demonstrate your knowledge! (relevant) Apply your answer to your

organization/industry!

- Analysis - Explanation and - Application

Exam preparation
Make sure that you understand the basics of each topic so that you can answer a straight-forward question. Identify any topics that are particularly applicable. Identify any sample questions that are particularly applicable
Activities

Company/Industry Profile
No more than 400 words included in your notes! Not marked but the marker does need some basic information. Bullet-points plus a brief commentary.

Some of the information may be useful for answering questions

e.g. main competitors and market-shares

Referencing?
Exams are more relaxed about referencing and there are no specific marks but.. -> better some references than no references

Abbreviated references acceptable in your answers.

-> Include some key references in your notes. Do not get obsessed over your referencing!

It looks good!

The Economist World Bank IMF United Nations The New York Times Saigon Times Freedom house (www.freedomhouse.org) http://www.freetheworld.com/ Economicfreedom.com

Kinh qu !

Wikipedia Yahoo answer www.economicsforidiots.com Financeblog.com -> You can use them but do not quote them (do not write the reference in your exam)

Part 1: Short Questions

Competitive Environment

Competitive Environment

Source: Adapted from M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors 1980, Free Press, 1980, p. 4. Copyright 1980,1988 by The Free Press, a division of Simon & Schuster Inc. Reproduced with permission.

Porters 5 Forces Model

Threat of New Entrants

An entry barrier is anything that hinders (prevents) entry and has the effect of reducing or limiting competition. Entry barriers plays an important role in a wide variety of competition matters because it is vital to the analysis of market power.

Threat of New Entrants

Economies of Scale

Barriers to Entry

Product Differentiation Capital Requirements Switching Costs Access to Distribution Channels Cost Disadvantages Independent of Scale Government Policy

Page 14 & 15

Expected Retaliation

Michael Porters five forces analysis on Vietnam milk industry

Potential entrants

Low
Buyers

Medium
Suppliers Competitive rivalry

Low
Substitutes

High

The threat of new entrants: Low

Some outstanding characteristics of the milk industry include stable growth, high profit, and comparatively stable market share. In order to enter the market, companies overcome barriers such as:
Product specification; Large capital requirement; Distribution channels
The pressure from new competitors is not high. Competition is much harsher in the internal industry.

Global Institutions, Global Economy and Global Organisations

Globalization

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What is Globalization?
Globalization refers to the shift towards a more integrated and interdependent world economy. Key elements of globalization

Globalisation of markets
Globalization of the production Global institutions

Products of identical form offered throughout the world

Coca-cola, KFC

Brand marketed worldwide but businesses need to vary their products to suit local tastes and preferences Universal needs: Wheat and steel, aeroplanes, computer microchips, software, financial assets

Globalisation of production

When goods and services are sourced from a range of locations Boeing 777: many suppliers in different places
Ensure highest quality Reduce costs

The Globalization of Market

Globalization of market refers to the merging of historically distinct and separate national market into one huge global market place. Falling barriers border trade have made it easier to sell internationally .

Fully merged? No!!! There are barriers to international trade!!!

The Globalization of Market

Consumer products such as Citigroup credit cards, Coca-Cola soft drinks, Sony PlayStation video games, McDonalds hamburgers, and Starbuck coffee are frequently held up as prototypical example of this trend.

These products are just benefactors of this trends: they are also facilitators of it. By offering the same basic products worldwide. They help to create a global market .

Globalisation

Internationalisation: travel and communication between countries Globalisation: More Recent (last 40 years) Involve deep integration

Globalisation

Links between elements of MNE at a different range of levels:

Company carry out research and development

in a country Production in another Head office in a third country Sales and marketing departments in every continent

Globalisation: Key elements

Importance of FDI Multinationals (MNE) Global financial markets

The Emergence of Global Institution

Over the half century a number of important global institutions have been created to help perform these functions. There institutions include

the General Agreement on Tariffs and Trade

(GATT) and its successor, the World Trade Organization (WTO); the International Monetary Fund (IMF); and its sister institution, the World Bank and the United Nations (UN).

Global institutions

All these institutions were created by the voluntary agreement between individual nation - states, and their functions are enshrined in international treaties.

World Bank

International financial institution that provides loans to developing countries for capital programs. The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (as amended effective 16 February 1989), all of its decisions must be guided by a commitment to promote foreign investment,international trade, and facilitate capital investment

International Monetary Fund (IMF)

The organization objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs.

IMF

The IMF describes itself as an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

IMF

Countries contribute money to a pool through a quota system from which countries with payment imbalances can borrow funds temporarily. Through this activity and others such as surveillance of its members' economies and policies, the IMF works to improve the economies of its member countries.

The United Nations

The United Nations was established on October 27, 1945, by 51 countries committed to preserving peace through international cooperation and collective security. When states become member of United Nations, they agree to accept the obligations of the UN charter, an international treaty that establishes basic principles of international relations.

The United Nations

UN is best know for peacekeeping role, one of the organization's central mandates is the promotion of
higher standards of living,
full employment and conditions of

economics and social progress and development that are related to the creation of vibrant global economy.

The United Nations

Four purpose of United Nations
To

maintain international peace and security. To develop friendly relations amongst nations. To cooperate in solving the international problems, and Promoting respect for human rights and to be a center of harmonizing the actions of nations.

The United Nations

UN played a leading contribution to national and international statistics and set the frame for assessing the worlds economic and social progress or the lack of it
Supported the integration of the global statistical community

UN
Played a major part in establishing a professional ethic of statistical independence and objectivity Encouraged public access to information, and contributed to the building of democracy Establishing national accounts

Foreign Direct Investment (FDI) and Transnational Corporations (TNCs)

UNs position on FDIs and TNCs evolved from confrontation to cooperation and voluntary agreements UN brought to attention the need for a multilateral approach in dealing with the TNCs The Global Compact seeks to advance responsible corporate citizenship so that business can be a positive force to the challenges of globalization UN provided a useful forum for the world and a spawning ground for ideas that have the potential to make FDIs and TNCs more beneficial to humankind

Regional Perspectives

The strong point of the UN is its regional and country perspectives The UNs regional commission have made many important contributions Provided regional leadership, including contributions to the realm of ideas and policy analysis in trade, energy, industry and transport as well social policies in education, health, and social welfare, along with technical assistance Selected contributions made by regional commission: Women in Development; Development Planning; Regionalization versus Globalization; Independent Regional Analysis

Legal Environment
Discuss how health and safety, and product safety, legislation may affect an organisation

Page 242, 244

Consumer Protection Laws

Federal

and state statutes and

regulations that promote product safety and prohibit abusive, unfair, and deceptive practices.

Consumer Protection Laws

The Vietnam Standard and Consumers Association (VINASTAS)
Its mission is two fold: to promote standardisation and product safety and to improve consumer protection in Vietnam. http://www.vietnamlaws.com/vietnamlawsonli ne_freeversion.aspx

LAW ON FOOD SAFETY

This Law provides for the conditions to assure food safety, food production and trading activities; food advertisement and labeling; imported and exported food; control of food contamination risks; prevention and dealing with food safety incidents; for the power, documents and procedures to issue certificates of eligibility for food production establishments; food testing; information, education and communication about food safety; State management of food safety and specialized inspectorate of foods safety.

LAW ON FOOD SAFETY

To encourage and develop a road map for compulsory application of the Good Manufacturing Practice (GMP), Good Agricultural Practice (GA), Good Hygiene Practice (GHP), Hazard Analysis and Critical Control Points (HACCP) and other advanced management systems for food safety control processes in food production and trading.

http://www.spring.gov.sg/QualityStandards/etac/food/Documents /Vietnam.pdf

Vinamilk Product Safety

Vinamilk is the leading producer of dairy products in Vietnam based on sales volume and revenue. It offer one of the largest dairy portfolios in Vietnam, across a wide selection of products, flavours, and packaging sizes. It also export to countries such as Australia, Cambodia, Iraq, the Philippines and the United States; It satisfy customers with high-quality, safe, and diverse products, the best service and competitive prices.

Continue

It offer customers with the best products qualified and food hygiene & safety as per Vietnam Law; Vinamilk products are produced by the modern and closely controlled production lines in accordance with the International Quality Control Standards of ISO and HACCP certified; Vinamilk products are qualified with food quality, hygiene and safety standards in accordance with the published standards;

Competitive Environment
Discuss the different ways in which markets may be structured, and how each structure is likely to affect businesses in that market

Page No 297

Four Market Structures

Pure Competition: Monopolistic Competition: Oligopoly: Monopoly:

Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Distinguishing features of the Four Market Structures

Characteristics
Number of competitors Ease of entry into industry by new firms Similarity of goods or services offered by competing firms Control over prices by individual firms Demand curves facing individual firms

Pure Competition
Many Easy Similar

Monopolistic Competition
Few to many Somewhat Difficult Different

Oligopoly
Few Difficult Can be either similar or different Some Kinked; inelastic below kink; more elastic above BP

Monopoly
No direct competitors Regulated by government No directly competing goods or service Considerable Can be either elastic or inelastic

None Totally elastic

Some Can be either elastic or inelastic Banana Republic

Examples

2000-acre ranch

Commonwealth Edison

Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Monopoly - Vinamilk

In the yoghurt market, Vinamilk is enjoying a near monopoly position with a market share of about 90%. However, new participants may be a threat for Vinamilk and we believe that some market share will be taken away from Vinamilk over the next few years.

Monopoly - Vinamilk
(1) its monopoly position in dairy market; (2) its strong brand name and (3) its peerless distribution network.

The Socio-cultural Environment

The main demographic features of Vietnam; Most important demographic factors affecting Vinamilk;
Page 161 - 174

The Technological Environment

Your chosen organisation and/or industry sector e.g. Vinamilk / Diary products, identify some of the most important benefits and / or problems of ebusiness
Page 212 Page 213 refer activity

The Financial Environment The Economic Environment

Main Functions of the Central Bank of Vietnam; Use suitable examples, how its decisions could affect Vinamilk and /or Diary industry

The Socio-Cultural Environment The Eco-environment

Corporate Social Responsibility main arguments for and against and explain with suitable example. -Evaluate your company

Part 2: Themes
Set 1 Ecological Factors Set 2 International Regional Integration Set 3 Governmental Regulation of Markets

Economic Integration Regional agreements

Regional economic integration refers to agreements between countries in a geographic region
to reduce tariff and nontariff barriers to the free

flow of goods, services, and factors of production between each other.

Economic Integration Regional agreements

While regional trade agreements are designed to promote free trade between countries of a same region
there is some concern that the world is

moving toward a situation in which a number of regional trade blocks compete against each other.

International Regional Integration

International regional integration has affected business you can use various range of business examples to support your answer; How international regional integration has affected your chosen company and/or industry; Assess and evaluate how chosen organisation has responded to International Regional Integration

Google key words

ASEAN + VINAMILK ASEAN + Vietnam + diary industry ASEAN + Vietnam + Economic effects (trade impact)

Motives for Regional Integration

It reflects the move towards liberalisation It represents attempts by states to benefit from trade creation, economies of scale, product differentiation and efficiency gains. Encourage FDI between participants

Motives for Regional Integration

The replacement of national markets by global markets. The decline of geographical determinants of the financial location and the internationalisation of the division of labour. The continued strengthening of multinational and private policy-making structures relative to the authority of the states.

Regional Economic Integration

Process whereby countries in a geographic region cooperate to either reduce or eliminate barriers to the free flow of products, people, or capital

Levels of Regional Integration

Political Union
Coordinate aspects of members economic and political systems

Remove barriers to trade, labor, and capital; Economic Union set a common trade policy against nonmembers; and coordinate members economic policies Remove all barriers to trade, labor, and capital Common Market among members; and set a common trade policy against nonmembers

Customs Union

Remove all barriers to trade among members, and set a common trade policy against nonmembers

Free-Trade Area Remove all barriers to trade among members, but

each country has own policies for nonmembers

Levels of Economic Integration

In a free trade area all barriers to trade of goods and services among member countries are removed, but members determine their own trade policies with regard to nonmembers
Examples of free trade areas include the European Free

Trade Association (between Norway, Iceland, Liechtenstein, and Switzerland), and the North American Free Trade Agreement (between the U.S., Canada, and Mexico) - NAFTA

Effects of Integration
Potential benefits
Trade creation Greater consensus Political cooperation Creates jobs

Potential drawbacks

Trade diversion Shifts in employment Loss of sovereignty

Regional Economic Integration Europe

Evolution of the European Union The EU is the result of: the devastation of two world wars on Western Europe and the desire for a lasting peace; the desire by the European nations to hold their own on the worlds political and economic stage

The evolution of the European Union

The forerunner of the EU was the European Coal and Steel Community, which had the goal of removing barriers to trade in coal, iron, steel, and scrap metal formed in 1951. The European Economic Community was formed in 1957 at the Treaty of Rome with the goal of becoming a common market

Political Structure - European Union

The five main institutions of the EU are:
the

European Council (resolves major policy issues and sets policy directions) the European Commission (responsible for implementing aspects of EU law and monitoring member states to ensure they are complying with EU laws) the Council of the European Parliament (the ultimate controlling authority within the EU)

Political Structure - European Union

The five main institutions of the EU are:
the

European Parliament (debates legislation proposed by the commission and forwarded to it by the council) the Court of Justice (the supreme appeals court for EU law)

North American Free Trade Agreement

Pop: 420 million GDP: $12 trillion Members: 3 Free-Trade Area Began: 1994

NAFTA Effects

Three-nation trade flows

Jobs and wages

Fast track authority

Future expansion?

Single currency?

Central American Free Trade Agreement

CAFTA established in 2006 between U.S. and 6 others U.S., Costa Rica, Guatemala, Honduras, El Salvador, Nicaragua, & Dominican Rep. CAFTA should create regional integration, peace, and stability Combined value of goods traded is around $32 billion
Prentice Hall, 2008 International Business 4e
Chapter 8 - 79

Overview of the AsiaPacific Region

North-East Asia - Japan, Korea, Taiwan, China
South-East Asia - Myanmar, Laos, Thailand, Cambodia, Philippines, Vietnam, Malaysia, Brunei, Singapore, Indonesia, East Timor Rest of the Asia-Pacific Region - Australia, New Zealand, Nepal, Bhutan, Bangladesh, Pakistan, India, Sri Lanka.

Brief history of the colonisation of the Asia-Pacific Region

India, Burma (now Myanmar), Malaysia, Hongkong, Singapore previously colonised by the British Indo-China colonised by France

Indonesia colonised by Holland (Dutch)

Taiwan and Korea colonised by Japan

Philippines colonised by Spain and U.S.A.

Why the strong interest in the Asia-Pacific Region

Potential to fulfill needs of some 2.5 billion people about 60% of the worlds population
Need to understand the wide diversity of cultures culture influence needs and business practices

Stages of economic development range from underdeveloped nations, e.g. Myanmar, Laos, to developing nations, like Malaysia, to Newly Industrialised Economies, like Singapore and Taiwan, to fully developed nations like Japan - presents both threats and opportunities

Association of South-East Asian Nations (ASEAN)

Formed in 1967 - today comprise of Thailand, Malaysia, Singapore, Indonesia, Philippines, Brunei, Myanmar, Laos, Vietnam and Cambodia Set up as a group for closer economic, social and cultural cooperation Trade between ASEAN partners (except Singapore), still not very significant Economies of ASEAN countries dominated by Chinese, although they form only about 6% of the regional population

Association of Southeast Asian Nations

ASEAN
1. Economic, social, and cultural development 2. Safeguard economic and political stability 3. Serve as a forum to resolve disputes

Pop: 500 million GDP: $740 billion Members: 10 General Cooperation Began: 1967

ASEAN Free Trade Agreement (AFTA)

Launched in 1990

Supposed to convert ASEAN into a free trade zone or at most 5% duty by 1st Jan. 2003
Raw or unprocessed agriculture to be included under AFTA No progress made in the area of services

EAEC & APEC

EAEC _East Asian Economic Caucus - an economic grouping without Westerners\ Comprise of ASEAN and Northeast Asian economies No significant progress in this alliance APEC - Asia-Pacific Economic Cooperation Forum (ASEAN + China, Taiwan, Hongkong, South Koreaa, Japan, U.S., Canada, Mexico, Australia, New Zealand, Papua New Guinea and Chile) APEC not truly an Asia-Pacific body as U.S. and Canada contributes to a large portion of the trade

Newly Industrialised Economies (NIEs)

Consist of South Korea, Taiwan, Hongkong and Singapore Most successful economies in the world with sustained growth rates of 7-8% p.a. (until the 1997 economic crisis and the 2001 global downturn) The only economies in the developing world likely to catch up with industrialised countries in terms of technology, infrastructure and per capita income One of the key drivers of the economies of Taiwan and Singapore is the electronics industry

The Macro and MicroEnvironment

Business is affected by key changes in the macro and micro-environment
Changes can present opportunities or threats for businesses Factors affecting the macro-environment are political, economic, social and technological Trading practices, channels of distribution, the competitive environment, form part of the micro-environment

Governmental Regulation of Markets

Write an overview of government regulation of markets. You can use various range of examples how these regulation affects business activity and also the company; In-depth explanation about government regulation of markets impacts on selected company; You are required to assess and evaluate how the company responded to or respond to government regulation of markets.