IBA Study Guide - PDF

Question 1 International Strategy and Organization Points 12 1.0 Describe the four forms of the international enterprise (put in the below mentioned term/numbers into the table) (7 Points) Format: Drag and Drop (1) Responsiveness; (2) efficiency; (3...

Question 1 International Strategy and Organization Points 12 1.0 Describe the four forms of the international enterprise (put in the below mentioned term/numbers into the table) (7 Points) Format: Drag and Drop (1) Responsiveness; (2) efficiency; (3) transfer of learning. (4) loose federation of enterprises; (5) tightly centralized. (6) strategic areas are centralized, others are decentralized. (7) ethnocentric approach., (8) polycentric approach (9) geocentric approach (10) product structure; (11) matrix structure. (you might fill in 2 terms in one field) Global International Multinational Transnational Enterprise Enterprise Enterprise Enterprise Strategic Competency Structure Appropriate Global HR Approach Organizational Structure Correct Answer: Global International Multinational Transnational Enterprise Enterprise Enterprise Enterprise Strategic 2 3 1 1,2,3 Competency Structure 5 6 4 4,6 Appropriate 7 8/9 8 9 Global HR Approach Organizational 11 10 Structure Question 2 Exchange Rates & Government Intervention Points 9 Format: Multiple Choice Q 2.1 : Which of the following statements describes best the International Fisher Hypothesis (1P.) Nominal Interest Rate = Real Interest Rate + Inflation Rate Difference in nominal interest rates supported by two nations’ currencies will cause an equal but opposite change in their spot exchange rates Difference in real interest rates supported by two nations’ currencies will cause an equal change in their spot exchange rates Difference in nominal interest rates supported by two nations’ currencies will cause an equal change in their spot exchange rates Q 2.2 If the British pound interest rates were consistently below EURO interest rates, then for the International Fisher effect to hold: (1 Points) the real value of the British pound would remain constant most of the time; the value of the British pound would tend to depreciate against the EURO; the value of the British pound against the dollar would appreciate in some periods and depreciate in others, but on average, there would be a zero rate of appreciation. the value of the British pound would tend to appreciate against the EURO; FORMAT: Drag and Drop Q 2.3 List six reasons why governments intervene in trade. (3 Points) 1. 2. 3. 4. 5. 6. TERMS: Correct: To protect jobs, To preserve the national security, To respond to “unfair” trade, To gain influence over smaller nations, To protect infant industries, To pursue strategic trade policy, to protect country’s unique culture Wrong: To reduce the liability of foreignness, To reduce the country of origin effect, to join the WTO, to meet general content requirements, Q 2.4 List 4 methods of trade promotion by governments (2 Points) 1. 2. 3. 4. Terms: Correct: Subsidies, Export Financing, Free Trade Zones, Special Government Agencies, Wrong: Tariffs, Quotas, Embargoes, FDI, Local Content Requirements, Administrative delays, Currency Control, Q 2.5 Liability of Foreignness (1 P.) FORMAT: Multiple Choice The term “liability of foreignness” (LOF) describes … …the costs that firms operating outside their home countries experience above those incurred by local firms..  … the costs that firms operating outside their host countries experience above those incurred by home firms.. … the costs that firms operating inside their home country experience above those incurred by other firms. … the costs for products and services from host country firms Q 2.6 Country of Origin Effect (1. P) FORMAT: Multiple Choice The country-of-origin effect is …a psychological effect describing how consumers' attitudes, perceptions and purchasing decisions are influenced by products' country of origin labeling, which may refer to where: a brand is based, a product is designed or manufactured, or other forms of value-creation aligned to a country. …an economic effect describing where companies source their raw materials. … no economic phenomenon … …a physiological effect describing how consumers' purchasing behavior is influenced by products' branding, which indicates a countries GDP. Question 3 Frameworks/”MiniMBA” Points 11 Q3.1 Generic Business Strategies (3 P.) Format: Fill in the missing words Michael Porter suggested four "generic" business strategies that could be adopted in order to _________________. The four strategies relate to the extent to which the scope of a businesses' activities are _________________ and the extent to which a business seeks to differentiate its _________________. a) conduct international business b) gain competitive advantage c) do corporate social responsibility d) small versus big e) narrow versus broad f) products over competitors g) goods over services h) customer over competitors i) international trade over domestic trade Correct Answer: Michael Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The four strategies relate to the extent to which the scope of a businesses' activities are narrow versus broad and the extent to which a business seeks to differentiate its products over competitors. Q3.2 Four "generic" business strategies (8P.) Format: Drag drop Ordne folgende Begriffe den Achsen und den Kästchen zu: (nicht alle Begriffe sind zuzuordnen) Degree of Product Differentiation Scope of Business Activities Differentiation Focus Differentiation Cost Focus Cost Leadership Narrow Broad International Business Domestic Business Goods Services High Low Question 4 Case Studies Corporate Social Responsibility Points 11 4a) Which of the following cases discussed in class is particular about (1P) Format: Multiple Choice L’Oreal Huaneng Power Fiji Water Tchibo Chiquita Four Seasons Hotels IKEA DOVE 4b) Carrols Pyramid of CSR (4 Points) Economic responsibility (lowest) Liability of Foreignness Business Responsibility Country of Origin Effect Responsibility Revenue Responsibility Ethical Responsibility (second highest) Philanthropic Responsibility (highest) FDI Responsibility Legal Responsibility (second from bottom) Stakeholder Management 4c) What evidence has the company in the CSR case study produced to substantiate its marketing slogan “every drop is green”? What could the company do to gain environmental credibility? (6 Points) Format: Free Text Question …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… ………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… Question 5 Entry Modes - Strategic Alliances Points 11 5.1 Name the four major motives for entering foreign markets and give an example for each of the motives. (4 Points) FORMAT: Matching question Distractors (left hand side): Liability of Foreignness, Country of Origin Effect, Balancing a Trade Surplus/Trade Deficit, Exporting, M&A 5.2 Position the seven entry modes into the following graph (7 Points) FOMRAT - Lplus: Drag and Drop  Geht das, die Begriffe einfach in das Diagramm zu bewegen, ohne Vorgaben? Terms to be filled in: Exporting, Licencing, Franchising, Turn Key Projects, Wholly Owned Subsidiary, Management Contracts, Joint Ventures, Portfolio Investment (Distractor) Question 6 Regional Integration Points 17 On Nov. 14, 2020 the RCEP was signed. FORMAT: Multiple Choice Q5.1 What does RCEP stands for ? (1P) Regional and Central European Partnership Regional Comprehensive Economic Partnership Russian and Central European Partnership Regional Contract on Energy and Petroleum Q5.2 Who are the partners in RCEP: (2P) EU member states, ASEAN members states, Japan, USA, China, India, South Korea African Union Member States, Australia, Q5.3 Who will most probably gain from the partnership (2P) EU member states, ASEAN members states, USA, China, India, Australia, Japan, African Union Member States, South Korea Q5.4 As what kind of regional integration can RCEP be classified ? (1P) Free Trade Agreement, Foreign Trade Agreement, Customs Union, Common Market, Economic Union, Political Union Q 5.5 What levels of regional integration exist? What are their characteristics? (11 P.) FOMRAT: Drag and drop Characteristic (4P) Level of Integration (5P) Example (2P) Start: lowest, end: highest + = + = + = + = Answer: Characteristic Operator Level of Integration Example (2P) (4P) (5P) Free Trade USMCA Agreement + Remove all barriers to = Customs Union MERCOSUR trade between nations + Establish common = Common Market trade policy against non members + Movement of labor and = Economic Union EU capital between members + Coordinate economic = Political Union USA policies, harmonize tax, monetary and fiscal policies and create common currency Terms to be filled in: Distractors: Foreign Trade Agreement, remove borders in general Correct: Free Trade Agreement, Customs, Union, Economic Union, Political Union, USMCA, MERCOSUR, EU, USA, Remove all barriers to trade between nations, Establish common trade policy against non-members, Establish common trade policy against non-members, Coordinate economic policies, harmonize tax, monetary and fiscal policies and create common currency Question 7 Trade Theory Points 10 Suppose there are two countries, U.S.A. and France. Both have a wine making industry and a bike industry. In the U.S, it takes 8 days to produce 1 bottle of wine and 5 days to make a bike. In France, a worker can produce a bottle of wine in 2 day or a bike in 7 day. Kein Problem, geht klar! Q 7.1. Fill out the following table by showing the number of input(s) required in order to produce one bike or one bottle of wine (output). (6 Points) Country Wine Bike U.S.A. France Q 7.2 Which country has an absolute advantage? (2 Points) For wine, …………………….. has an absolute advantage over …………………………. For bikes, …………………… has an absolute advantage over …………………………. Q 7.3 Is this also an example of comparative advantage? Why? (2 Points)  Yes  No Because ………………………………………………………… Question 8 Value Chain Analysis Points 7 Q 8.1 Porter’s Value Chain I (2P.) FORMAT: Drag and Drop /Fill out Text “Porter’s value chain is a ________ approach to examining the development of__________.” Terms to be filled in: systematic, unsystematic, creative, entrepreneurial, resources, revenues, gains and losses, services, products, customer behaviour, sales Correct answer: “The value chain is a systematic approach to examining the development of competitive advantage.” Q 8.2 Porter’s Value Chain II (5 P.) FORMAT: Drag and Drop Terms to be filled in Correct Terms: Supportive Activities Primary Activities Firm Infrastructure HR Management Technology Development Procurement Inbound Logistics, Operation Outbound Logistics, Marketing and Sales, After Sales Services Distractors: Executive Board, Pricing, Collaboration, Products, Services, Performance, Organization, Margin Question 9 OLI & FDI Points 10 Q9.1. What does FDI stands for? (2 Point) FORMAT: Multiple Choice Foreign Direct Investment Foreign and Domestic Innovation Further Development Innovation Future Direct Incentives FOMRAT: Fill in Text A company investing in a company in foreign country with a stake of less than 10% is doing a ………… Select: Portfolio Investment Merger & Acquisition Foreign Direct Investment None of the above Q 9.2 According to Dunning’s OLI Framework (O-/L-/I-Advantages) a firm’s foreign investment decisions are driven by: ………. (3 P.) FOMRAT: Multiple Choice Correct: Ownership Advantages, Location Advantages Internalization Advantages Distracting: Internationalization Advantages Industry Advantages Outsourcing Advantages Opportunity Advantages Local Customer Advantages Low-Cost Advantages Own-Country Advantages Q 9.3 The OLI Framework as Decision Tree (5 P. - ½ point per term) FORMAT: Drag and Drop Terms to drag and drop: O-Advantages I Advantages L-Advantages No international activity Produce at home and Export FDI Contractual Arrangements Decision types to drag and drop: Internationalization, Location, Internalization Correct answer Question 10 Points 15 Q10.1 China Is Now the World’s Largest Economy (William Wilson / October 09, 2014) (2 P.) “…..the International Monetary Fund announced China has surpassed the United States as the world’s largest economy. There are two basic methodologies in measuring a nation’s gross national product: …” Measure 1:_______________________________ Measure 2:_______________________________ Alternatives to choose from : GDP – Gross Domestic Product GDP – General Domestic Product GDP – General Dominating Product PPP – Purchasing Power Parity PPP- Product Placement Parity PPP – Planned Product Process HCI – Human Computer Interaction HDI – Human Development Index HPI – Human Power Inc. Burgernomics Q 10.2 Which one takes the difference in price levels between countries into account ? (1P.) Measure 1 □ or Measure 2) □ Q 10.3 Is China’s growth good or bad for the world? For whom ….? (4 P.) good bad depends a) International Investors □ □ □ _ b) International Exporters □ □ □ c) International Consumers □ □ □ _ d) World Power Balance □ □ □ _ Q 10.4 Are these statements true or false? Please check the corresponding box (7P.). No. Question True False 1 Each national business environment is composed of unique cultural, X political, legal, and economical characteristics that define business activities. 2 SWOT stands for Special Weapons or Tactics? X 3 The acronym PEST is used to describe a framework for the analysis of X macro-environmental factors. 4 Representative Democracies strives to provide some or all of the X following freedoms: F. of Expression, Periodic elections, Full Civil and Property Rights, Minority Rights, Non-political Bureaucracies 5 The Norwegian currency is the Euro X 6 Frankfurt is the capital of Germany X 7 The Chiquita case describes tariff-quotas as a method to restrict X imports. 8 The International Product Life Cycle theory tries to explain X international trade. Q 10.5 What do the following acronyms stand for? Please write the full name in the second column. Each 0.5 points = 3 points EU European Union EFTA European Free Trade Association GATT General Agreement on Trade and Tariffs WTO World Trade Organization ASEAN Association of South-East Asian Nations OECD Organization for Economic Cooperation & Development What are the two drivers of Internationalization ?  Internet and Falling trade barriers due to WTO What determines the success and failure of firms around the globe? Institutional Based View Resource Based View What are formal institutions What are informal institutions What are the five dimensions of Hofstedes Cultural Framework ? What does VRIO (framework) stands for? 5.1. Draw the Product Diffusion Curve (with the axes and other details). Briefly explain the main purpose of using this curve / what does this curve show? (6 Points) 5.2. Draw the Product Life Cycle (with the axes and other details). Briefly explain the main purpose of using this curve / what does this curve show? (6 Points) What does the given graphic represent or vice versa MC or Which graphic belong to the concept Or more then one graphic Which graphics belong to which concepts 5.3. What is the main difference between the two frameworks? (2 Points)