DEVRY BUSN 427 Final Exam

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DEVRY BUSN 427 Final Exam

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• TCO 1) Which are factors that move the world
  toward more globalization?
• (TCO 2) What is the difference between communists
  and social democrats?
• (TCO 3) What is probably more important than
  culture in explaining the differences in economic
  growth between countries?
• (TCO 3) Which theory deals with competitive
  advantage for countries?
• (TCO 4) FDI tends to flow
• (TCO 5) Which of the following is not a member of
  the Asia-Pacific Economic Cooperative?
• (TCO 6) What common good is used in most nations
  to create an index for measuring purchase power
  parity in various nations?
• (TCO 8) What are the various types of
  countertrade available?
• (TCO 8) In distribution strategy, what are the
  four main differences between countries?

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• (TCO 3) When McDonalds initially entered China,
  it was confident that its success in other parts
  of the world would facilitate its success in
  China, but they quickly found out that the
  relationships and connections implied by guanxi
  are an essential to business success in China. 
  McDonalds lost an attractive store location near
  Tiananmen Square to a Hong Kong developer who,
  thanks to relationships and connections developed
  over the years, was able to persuade city
  officials to overlook the lease McDonalds held
  for the property. Explain the concept of
  guanxi. Why is it so important to businesses
  operating in China? How did McDonalds lack of
  guanxi raise its costs of doing business in
  China?
• (TCO 3) In 2006, two Chinese journalists reported
  that the working conditions at Hongfujin
  Precision Industries where Apples iPods are
  produced were substandard. According to the
  report, not only were workers at the plant poorly
  paid, but they were also forced to work overtime.
  Apple immediately responded to the allegations
  and audited the factory in question. However,
  managers at the factory filed a defamation
  lawsuit against the two journalists. Despite the
  fact that Apples audit did indeed show
  substandard working conditions at the factory,
  Hongfujin did not withdraw the lawsuit.
  Eventually the Reporters Without Borders group
  took up the case for the two reporters and the
  lawsuit was dropped.Should Apple be
  responsible for ensuring that its suppliers are
  safeguarding the basic rights and dignity of its
  employees? How can Apple be sure that its
  suppliers do not employ sweatshop labor?
• (TCO 3) Exports are largely responsible for
  Chinas recent rapid economic growth. The
  country, capitalizing on its cheap labor force,
  has focused on converting raw materials into
  products that are exported to developed countries
  such as the United States. In 2008, Chinas trade
  surplus was a record 280 billion, and its
  holdings of foreign exchange reserves were over
  1.95 trillion. Some critics have suggested that
  China is following a neomercantilist policy.

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• Are the claims that China is following a
  neomercantilist policy valid? Why or why not?
• (TCO 4) For years, Japan has been relatively
  closed to significant foreign direct investment,
  but more recently the government has changed its
  policy and actually now encourages inward
  investment. Wal-Mart, taking advantage of this
  shift in policy, acquired a large Japanese
  retailer in 2002. Wal-Marts initial venture into
  Japan has been challenging and has forced the
  company to change its approach to better compete
  with local retailers and meet the needs of
  Japanese consumers. Why did Japan change its
  position on inward foreign direct investment? How
  will Wal-Marts investment benefit Japan?
• (TCO 7) Which of the following are true about the
  International Monetary Fund?
• (TCO 5) Concerning European Unions progress
  toward creating a single financial market, the
  quest started in 1999 was to have been completed
  by 2005, however, progress has been slowed by
  various factors related to the tradition of each
  member country operating autonomously. By 2007,
  significant progress had been made. Some 41
  measures designed to create a single market were
  in place and others were in the pipeline. The
  current issue facing the EU revolves around the
  enforcement of the rules that have been
  established as law. Some experts believe that it
  will be at least another decade before the
  benefits of the new rules become apparent.
  Discussion of this feature can begin with the
  following questions.What are the benefits of
  creating a single financial market in the
  European Union for companies? Does it make sense
  for consumers?
• (TCO 6) In the 1980s, Caterpillar was negatively
  affected by a strong dollar and lost significant
  market share to Japanese competitor Komatsu. The
  situation prompted Caterpillar to revise its
  global strategy and by the 2000s, the company was
  in a much better position to deal with volatile
  currency values. More recently, a strong dollar
  has actually helped boost Caterpillars bottom
  line.

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• In the 1980s, a stronger dollar hurt
  Caterpillars competitive position, but in 2008 a
  stronger dollar did not seem to have the same
  effect. What had changed?
• (TCO 7) After joining the European Union in 2004,
  Latvia established a currency board system that
  pegged the value of its currency to the euro.
  This system came under significant pressure when
  the effects of the financial crisis that began in
  the United States in 2008 spilled over into the
  country. Latvia was eventually forced to ask the
  International Monetary Fund and the European
  Union for assistance in order to get its
  financial system and economy back on track. As
  part of the assistance package, Latvia was
  required to make significant changes in its
  economic policy.Why did the initial effort by
  Latvias government to stabilize the countrys
  currency fail? Was the government attempting to
  stop a banking crisis or a foreign debt crisis?
• (TCO 8) Vellus Products is a small company that
  produces personal care products for dogs. Vellus
  Products initially began exporting when a
  Taiwanese business placed an order for its dog
  shampoo. Since then, Vellus Products has expanded
  its export business and today, international
  sales account for about half its total sales.
  Vellus Products now sells in 28 countries around
  the world. Can other small companies learn from
  the experiences of Vellus Products? Reflect on
  the tips of Vellus Products founder Sharon
  Doherty for beginning the export process.
• (TCO 8) By 2012, India is expected to export half
  a million vehicles a year. South Koreas Hyundai
  is leading the charge, exporting over one third
  of its Indian production. Suzuki and Nissan have
  both entered the Indian market more recently.
  Both companies see the Indian market as an
  important component in their future production
  and marketing strategies. Why did Hyundai and
  other global automakers choose India as a
  production location? What makes India attractive
  to auto producers?

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• (TCO 8) Microsoft is meeting the challenges of
  expanding into the potentially lucrative Indian
  market, a market where currently most people
  cannot afford a computer nor the Microsoft
  programs to run it. Microsoft has changed its
  highly standardized approach to markets to
  develop products specifically designed to meet
  the needs of the Indian market. In addition, the
  company has established local R D operations
  that it hopes will generate new products for the
  market.How does Microsoft vary the marketing mix
  of its existing product offerings to gain
  traction with Indian customers? What else has
  Microsoft done to make headway in India?
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