International Business Essay Questions And Answers

Final Examination XXXX INTERNATIONAL BUSINESS ( BUSI2025 ) Writing Time: 2 hours Total Marks on Paper: 60 marks Weighting of Exam: 30% Permitted Materials: Approved foreign language dictionaries Instructions Instructions on the online take-home exam are available on Wattle. Page 1 of 6 – International Business – (BUSI2025) PART A – MULTIPLE CHOICE QUESTIONS (20 MARKS) In the actual exam, you must answer ALL 20 questions (1 mark each) Below is a sample of 10 questions for your trial. Identify the choice that best completes the statement or answers the question. 1. Firms choose FDI over exporting in order to A. B. C. D. Avoid high transportation costs Protect technological know-how Avoid trade barriers Both A and C 2. The oldest economic argument for government intervention into international trade is: A. B. C. D. Protecting the environment Protecting infant industries Protecting human rights Protecting jobs 3. A(n) __________________ is a form of regional economic integration in which there are no barriers to trade between member countries, a common external trade policy, and the free movement of the factors of production. A. B. C. D. Free Trade Area Economic Union Customs Union Common Market 4. In societies where trust is high, ________. A. people tend to be more future-oriented B. business costs are typically lower C. people tend to be more fatalistic D. family businesses are dominant 5. ___________ refers to the attempt to collect foreign currency receivables early when a foreign currency is expected to depreciate and pay foreign currency payables before they are due when a currency is expected to appreciate A. B. C. D. Lead strategy Currency distribution strategy Market forward strategy Lag strategy Page 2 of 6 – International Business – (BUSI2025) 6. Turnkey projects: A. Are attractive because a firm can avoid the costs of establishing local manufacturing operations B. Represent the least risky foreign market entry mode C. Are unattractive because proprietary or intangible assets might be lost D. Can be less risky than conventional FDI 7. Which of the following has NOT been a major force increasing globalisation in recent decades? A. liberalization of cross-border trade B. increase in and expansion of technology C. growing pressure from consumers D. decreasing prices of natural resources 8. According to Michael Porter’s national competitive advantage theory, the degree to which a nation is likely to achieve international success in a certain industry is a function of the combined impact of all of the following attributes that shape the environment in which local firms compete, EXCEPT: A. B. C. D. Significant trade with high-income countries Resource availability Local demand conditions Related and supporting industries 9. The free trade theories of specialization primarily assume that ________. A. domestic resources are unable to move from the production of one good to another B. countries have objectives other than economic efficiency C. resources are immobile internationally D. specialization triggers unemployment 10. An international strategy A. Allows TNCs to adopt a worldwide area division structure B. Is the optimal approach under low pressure for cost reduction and high pressure for local responsiveness C. Require a complex process of coordination and cooperation in an environment of shared decision making D. Becomes less viable when competitors emerge Page 3 of 6 – International Business – (BUSI2025) PART B – SHORT ANSWER QUESTIONS (20 MARKS) Please answer the following FOUR questions (all questions are 5 marks each). 1. What are the positive and negative impacts of Foreign Direct Investment on the home and host countries? 2. What is globalisation? What risks do firms encounter from the globalisation of markets and the globalisation of production today? 3. Describe the different types of regional economic integration and give an example of each type. 4. Using examples, explain how a country’s political system can influence how foreign firms conduct business in that country Page 4 of 6 – International Business – (BUSI2025) PART C – ESSAY QUESTIONS (20 MARKS) You must answer BOTH questions (10 marks each). You should write to the maximum of 1.5 pages only for each essay. American Restaurants Eating It Up In Gulf Countries Source: Wall Street Journal, 9th January 2014 The Persian Gulf is emerging as a major new frontier for foreign restaurant chains targeting its growing populations, recovering economies, modern infrastructure and low corporate tax rates. Dozens of restaurants from the U.S. – a flight of at least 12 hours away – have made first forays into the energy-rich region over the past few years, and more are set to come. While the list of global chains already present in the market is nearly exhaustive, many companies still see opportunity as consumers become more sophisticated, health-conscious and want more variety. Denny’s, the ubiquitous diner chain headquartered in South Carolina, said this week that it would open 30 new restaurants in nine Middle Eastern countries in the next decade. Jamba Juice, a Californian healthy shake place, also said this week that it was making an entry into the Middle East through a franchise agreement with Landmark Group, a Dubai-based conglomerate. “The resident population is growing and more expats are coming into the region,” said Kieran Mallon, the chief operating officer of Landmark’s food and beverage division. “Moreover, there is a healthy tourist influx, which brings millions of people into the region from across the world. The scale of the infrastructure projects being planned, with retail and tourism at its core, make the region attractive. Also, it is becoming easier to set up businesses in the region as compared to the rest of the world.” Landmark plans to open about 80 Jamba Juice locations in the region over the next decade, starting with the U.A.E. and then taking on Saudi Arabia, Qatar, Kuwait, Bahrain and Oman. The chain is trying in part to capitalize on growing health consciousness in a region already flooded with fast-food restaurants and plagued by some of the world’s highest diabetes rates. “There is a growing awareness about leading a balanced lifestyle in the region and we see an increasing demand for healthier, nutritive food and beverage options,” Mr. Mallon said. “This trend makes us more confident about Jamba Juice’s potential in the region.” Some attempts to expand in the Gulf haven’t gone off perfectly: Taco Bell, for example, opened a restaurant in Dubai Mall in 2008 only to close it a few years later. But recent entrants to the region – healthy or not – appear to have largely been successful. Page 5 of 6 – International Business – (BUSI2025) Recent arrivals to the Middle East include Ketchup, an old-timey Americana restaurant backed by actor Ashton Kutcher that set up in Dubai’s Downtown area last year, and the Dallas-based Mooyah, a burger chain that said this week that it would launch in Bahrain after opening in the U.A.E. last year. The Orlando-based Longhorn Steakhouse opened its first Middle Eastern location last September in Riyadh, while New York’s Italian chain Serafina touched down in Dubai last October. What are the opportunities and challenges for foreign food chains in the Middle Eastern markets? (10 marks) Discuss the advantages and disadvantages of the franchising strategy that American food brands have adopted in the Middle East. (10marks) ___________________________________________________________________________ Page 6 of 6 – International Business – (BUSI2025) BUSI2025 International Business Answers to the Practice Exam Multiple Choice Questions 1. D 2. B 3. D 4. B 5. A 6. A 7. D 8. A 9. C 10. D

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