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Hcba 3221: International Business Management Question Paper
Hcba 3221: International Business Management
Course:Master Of Business Administration
Institution: Jomo Kenyatta University Of Agriculture And Technology question papers
Exam Year:2012
W1-2-60-1-6
JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY
University Examinations 2012/2013
YEAR I SEMESTER II EXAMINATION FOR THE DEGREE OF MASTERS IN BUSINESS ADMINISTRATION.
HCBA 3221: INTERNATIONAL BUSINESS MANAGEMENT
DATE: AUGUST 2012 TIME 3 HOURS
INSTRUCTIONS: ANSWER QUESTION ONE AND ANY THREE QUESTIONS
Question 1: Read the case and answer the questions below
In 1998, Daimler Chrysler introduced a new car; a new brand and a new look with advanced technology in nine EU countries. It was named ‘Smart’ and was certainly distinctive and nice looking. The smart car is only 2,500 mm long, 1,515 mm wide and 1,529 mm high. It seats two adults or one adult and two children. The Smart car’s weight is 720kg, has a 22 litres-gas tank, and gets 100km per 4.8 litres. It has a frame called Triton safety cell, which comes in silver colour and blue removable panels, which can be changed in less than an hour, in such colours as red, yellow, black, blue and green. The optional leather seats are papaya coloured. If you are thinking that the interchangeable panels and the wild colours remind you of a swatch watch, you are correct as the swatch was the inspiration for developing this car. In the early stages of the project, Daimler-Benz and SMH (maker of swatch watch) formed a joint venture; the car was called “Swatch Mobile.”
The Swatch mobile concept was based on Nicolas (chairman of SMH) conviction that consumers become emotionally attached to cars as they do to watches. His vision was of high safety, ecology and a very consumer- friendly area to sit in. Like the swatch, the swatch mobile was to be affordable and stylish. Nicolas noted that safety would be a key selling point, declaring, “This car will have the crash security of a Mercedes.”The car was to emit almost no pollutants due to its electric engine, and was to be capable of gasoline powered operations, using a highly efficient miniaturized engine. Nicolas further predicted that worldwide sales would reach 1 million in the U.S accounting for half the market. Shortly after the introduction, the joint venture between swatch and Daimler-Benz ended when Daimler bought out SMH’s stake. Nicholas was disillusioned and Daimler-Benz found it difficult to work with Nicolas.
To date, smart cars have two criticisms; safety and price, despite developments of crash safety that enables smaller cars to be just as safe as larger ones. During its first winter (1999) on the road, there were reports of several accidents. In response, the company developed “Trust Plus,” a software package that will cut power if the wheels start to slip. As for the price, it originally sold for $10,500.After a period of disappointing sales in Italy and France, the price was reduced to $9,300. Although the buyer’s of smart car have high incomes, or already own two cars, they are concerned about the price-value relationship.
a. Describe the market potential for the smart car and discuss whether it is an international or global product. (10 marks)
b. “Swatch car is a unique success story.” Explain this statement. (10 marks)
c. Describe the company’s competitive strategy for its continued success in business. (8marks)
d. How should the company position smart car in the markets it operates from? (8 marks)
e. What implications would the price reduction strategy have on the company’s customers? (4 marks)
Question Two
Understanding the concept of international business management is very crucial for success in international markets. As an international business manager, discuss this statement and describe the special problems that are encountered in foreign markets not experienced at home. (20 marks)
Question Three
“Successful international business strategy requires a thorough understanding of the unique values that will be a source of competition advantage to the firm.”
a. As an international business manager, identify Michael Porters five forces of competition and explain how each of them will be of relevance for foreign business. (10 marks)
b. Explain why Porters strategy framework may fail to adequately address the dynamics of 21st century. (10 marks)
Question Four
All managers conducting business outside their home countries must carefully study the government structure in the target countries and analyze the salient issues arising from the political environment.
a. Define political risk and explain why its analysis is of utmost importance to firms operating in a foreign market. (12 marks)
b. Describe the legal aspects governing international business clearly outlining their implications across borders.(8 marks)
Question Five
The international marketing mix is the parameter used to make decisions that centre on the customers in the foreign target markets in order to create perceived value to the customer and profitability to the firm.
a. Discuss the different alternative strategies international business managers can use in determining an advertising agency in the international market(8 marks)
b. “Regardless of the marketing factors involved and the company’s orientation to market pricing, every price must be set with the cost considerations in mind.” Discuss. (12 marks)
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