MB0053 – International Business Management

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ASSIGNMENT

DRIVE	FALL 2017
PROGRAM	Master of Business Administration – MBA
SEMESTER	IV
SUBJECT CODE & NAME	MB0053 – International Business Management
BK ID	B1724
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question. 1. In international business, scanning of demographic environment plays an important role as it helps firm understand the various demographic factors. One has to understand both sides of the demographic environment while planning strategy for international markets. Explain this concept.

Answer: The term ‘Business Environment’ comprises of two words – Business and Environment. Business refers to all the activities which involve production, buying and selling of goods, rendering of services, and so on, with the primary objective of earning profit. Though profit earning is the primary motive of every business but to fulfill

Question. 2. Explain foreign direct investment and its advantages.

Answer: Foreign direct investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. The Organization of Economic Cooperation and Development (OECD) defines control as owning 10% or more of the business. Businesses that make foreign direct investments are often called multinational corporations (MNCs) or multinational enterprises (MNEs). An MNE may make a direct investment by creating a new foreign enterprise, which is called a greenfield investment, or by the acquisition of a foreign firm, either called an acquisition or brownfield investment.

Advantages of FDI

In the context of foreign direct investment, advantages and disadvantages are often a matter of perspective. An FDI may provide some great advantages for the MNE but not for the foreign country where the investment is made. On the other hand, sometimes the deal can work out better for the foreign country depending upon how the investment pans out. Ideally, there should be numerous advantages for both the MNE and the foreign country, which is often a developing country. We'll examine the advantages and disadvantages from both perspectives, starting with the advantages for multinational enterprises (MNEs).

Question. 3. Regional integration can be defined as the unification of countries into a larger whole. It also reflects a country’s willingness to share or unify into a larger whole. Explain its types.

Answer: Regional integration can be defined as the unification of countries into a larger whole. It also reflects a country’s willingness to share or unify into a larger whole. The level of integration of a country with other countries is determined by what it shares and how it shares. Regional integration requires some compromise on the part of participating countries. It should aim to improve the general quality of life for the citizens of those

Question. 4. There are several methods used in globalised era for international market entry, such as exporting, franchising, licensing, joint venture and wholly owned subsidiary. Compare any two mode of Foreign market entry.

Answer: If your business is considering entering a new international market, then your choice of market entry strategy is of crucial strategic importance as this will affect your entire marketing and business planning process.

There are a number of ways to enter a foreign market.  Broadly speaking, they consist of:

Exporting

Question. 5. In today’s trade, the increasing number of strategic alliances stands as one among the fast growing developments. Explain. What are the advantages and disadvantages of formulating strategy?

Answer: As economies become more globalized, more and more firms are participating in foreign markets. The most popular participation strategies include exporting, licensing, strategic alliances, joint ventures, and direct foreign investment. Each of these involves different levels of risk, capital, and returns.

The use of strategic alliances and joint ventures is rapidly becoming popular with a growing number of multinational firms. According to Cullen, an

Question. 6. ‘Global sourcing’ is described as ‘the practice of sourcing cost effective and best goods and services across geopolitical boundaries in order to cater to global markets’. Explain five reasons for Global Sourcing.

Answer: As international demand grows for more and better products and services, competition becomes more intense. Firms must keep up with rapidly changing technology while also lowering their costs, increasing quality, and improving customer service at all stages of the value chain. This is the reality of international trade.

What is global sourcing – really?

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