Question Paper International Management - II (MB3H1IB) : October 200

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!ection " : Basic #oncepts (30 Mar$s)

This section consists of questions with serial number 1 - 30. Answer all questions. Each question carries one mark. Maximum time for answering Section A is 30 Minutes.

1% Since 1 !3" a #floating$ exchange s%stem has been the norm in most of the countries. A floating exchange <Answer> s%stem is goo& because '. 't allows go(ernments to a&&ress their )alance of *a%ments +)o*, -roblems b% ha(ing flexible exchange rates. ''. 't allows go(ernments to change the exchange (alue in tune with ex-ort -olicies. '''. The go(ernment nee&s to manage its )alance of *a%ments +)o*, situation. +a, +b, +c, +&, +e, .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e )oth +'', an& +''', abo(e All +'," +'', an& +''', abo(e.

2% *ricing &ecisions cannot be ma&e in isolation because -ricing affects other marketing &ecision (ariables an& <Answer> &etermines '. The customer/s -erce-tion of (alue. ''. The le(el of moti(ation of interme&iaries. '''. *romotional s-en&ing an& strateg%. +a, +b, +c, +&, +e, .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e )oth +'', an& +''', abo(e All +'," +'', an& +''', abo(e.

3% The sensiti(it% of firms/ cash flows to changes in exchange rates is calle& ex-osure. 0hich of the following <Answer> is1are true with res-ect to translation ex-osure2 '. ''. '''. '3. +a, +b, +c, +&, +e, 't arises on the basis of accounting for transactions between tra&ing com-anies. The hol&ing com-an% in a countr% nee&s to inclu&e the accounts of its subsi&iar% in its balance sheet. There is ex-osure" when transactions are recor&e& at the historical rates. 't in(ol(es a sub4ecti(e -ro4ection of future cash flows. .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e )oth +'', an& +''', abo(e All +'," +''," +''', an& +'3, abo(e.

&% 'f 5ewlett *ackar& +5*, an& Microsoft were to agree to -artner together to -urchase !06 of the largest com-uter <Answer> manufacturer an& &istributor in 7orea" it woul& be an exam-le of which of the following entr% mo&e2 +a, +b, +c, +&, +e, *ortfolio in(estment 8oint (enture Mixe& (enture 9ranchising :icensing.

'% A&am Smith -ro-ose& the ;Theor% of Absolute A&(antage/. 0hich of the following is1are the assum-tion+s, of <Answer> this theor%2 '. The trans-ortation costs in(ol(e& in selling a commo&it% in a countr% other than the one in which it is 1

-ro&uce& are either non-existent or insignificant. ''. *rices are com-arable across countries. '''. Two countries woul& tra&e e(en when one countr% has absolute a&(antage in all -ro&ucts or another countr% &oes not ha(e absolute a&(antage in an% -ro&ucts. +a, +b, +c, +&, +e, .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e )oth +'', an& +''', abo(e All +'," +'', an& +''', abo(e.

(% 'n(estment banking is a banking acti(it% s-eciali<ing in the formation of ca-ital. 0hich of the following is not <Answer> an acti(it% execute& b% an in(estment banker in 'nternational banking ser(ices2 +a, +b, +c, +&, +e, *ro4ect a&(isor% 9inancial restructuring Mergers an& acquisitions 'm-ro(ement in econom% =aising 9inance.

)% 'nternational Monetar% 9un& +'M9, -ro(i&es long-term financial assistance facilit% to the countries with a more <Answer> -rotracte& )alance of *a%ments +)o*, -roblem with roots in the structure of the econom% is referre& to as +a, +b, +c, +&, +e, Exten&e& fun& facilit% Su--lemental reser(e facilit% >om-ensator% finance facilit% Emergenc% finance facilit% :ow fun& facilit%.

% The -ro&uct mix is the set of all the -ro&ucts that an organi<ation offers to its customers. 't has certain <Answer> characteristic features like -ro&uct wi&th" length" &e-th an& consistenc%. 0hich of the following is1are true with res-ect to these characteristics2 '. The wi&th of the -ro&uct mix is the total number of items in that mix. ''. The length of the -ro&uct mix is the total number of -ro&uct lines a com-an% carries. '''. The &e-th of a -ro&uct mix is the assortment of si<es" colors an& (ariations offere& for each -ro&uct in the -ro&uct line. '3. *ro&uct mix consistenc% refers to the closeness exhibite& b% the -ro&ucts lines in -ro&uction requirements" &istribution" en& usage etc. +a, +b, +c, +&, +e, .nl% +', abo(e .nl% +'', abo(e )oth +''', an& +'3, abo(e +''," +''', an& +'3, abo(e All +'," +''," +''', an& +'3, abo(e.

*% The 'nternational >entre for Settlement of 'n(estment ?is-utes +'>S'?, -ro(i&es facilities for the conciliation <Answer> an& arbitration of &is-utes between member countries an& in(estors who are nationals of other member countries. A-art from this" 0hich of the following is1are the a&&itional facilit% rules it a&minister" certain -rocee&ings be%on& the -ur(iew of the con(ention2 '. >onciliation an& arbitration -rocee&ings where either the state -art% or the 5ome State of the foreign national is not a member of '>S'?. ''. 0here a &is-ute is not an in(estment &is-ute an& relates to transactions that &istinguish it from or&inar% commercial transactions. '''. '>S'? also &oes certain #fact fin&ing -rocee&ings$ for an% state or foreign national" who ma% want an enquir% #to examine an& re-ort on facts$. +a, +b, +c, +&, +e, .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e )oth +'', an& +''', abo(e All +'," +'', an& +''', abo(e.

10% 9or& a&(ertises com-an%/s name -rominentl% along with the -ro&ucts. 0hich bran&ing strateg% &oes this refer <Answer> to2 @

+a, +b, +c, +&, +e,

>om-an% name an& in&i(i&ual -ro&uct name Se-arate famil% names for all -ro&ucts )lanket name for all -ro&ucts 'n&i(i&ual bran& names ;Ao-name/ unbran&e& merchan&ise.

11% 'n which of the following international strateg%" &oes the to- management of the -arent com-an% take full control <Answer> of the subsi&iar% with the hel- of so-histicate& management information s%stems an& cor-orate staff" who are s-ecialists in the fiel&2 +a, +b, +c, +&, +e, >oor&inate& fe&eration A&ministrati(e control 'nternational mentalit% >entrali<e& hub .-erational control.

12% A newl% intro&uce& 'ntel microchi- cost aroun& B1000 -er chi-. .nl% a few segments in the market can affor& <Answer> such ex-ensi(e chi-s. These chi-s -ower the highest qualit% *ersonal >om-uters +*>s, an& ser(ers in the market" bought b% the most eager customers. 0hen the sales of this tren&setter segment start &eclining" an& com-etitors make efforts to intro&uce com-eting -ro&ucts" the com-an% re&uces the -rice to make the chiaffor&able to the next segmentC earl% a&o-ters. The -rices finall% come &own to B@00 -er chi-. The chi- at this -rice is meant to ser(e the mass-market nee&s. At this -rice again" the chi- is a re(enue s-inner. 'n this light" which of the following best &escribes the 'ntel/s -ricing strateg%2 +a, +b, +c, +&, +e, Market -enetration Market hol&ing Market skimming Market &e(elo-ment *ro&uct &e(elo-ment.

13% >ontract manufacturing is one of the low control 1 share& ownershi- mo&es use& b% com-anies to enter into <Answer> international markets. 0hich of the following is1are the &isa&(antage+s, of contract manufacturing entr% mo&e2 '. ''. '''. '3. +a, +b, +c, +&, +e, There is a -otential &anger that contract manufacturer ma% become a future com-etitor. :ow labor cost countries usuall% ha(e low labor -ro&ucti(it%. The qualit% of the -ro&uct cannot be assure&. This mo&e of entr% &eman&s greater commitment of resources. .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e +'," +'', an& +''', abo(e All +'," +''," +''', an& +'3, abo(e.

1&% )lue &etergent is the market lea&er of &etergents an& is in the maturit% stage of its life c%cle. There are man% <Answer> com-etitors in the market that challenge )lueDs lea&ershi-. 0ith res-ect to maturit% stage of -ro&uct life c%cle which of the following statements is most likel% true about )lueDs -ricing2 +a, +b, +c, +&, +e, As a market lea&er" )lue &oes not nee& to worr% about -rice )lue shoul& not re&uce the -rice in or&er to rea- -rofits )lue must -rice its -ro&ucts lower than the other bran&s to maintain its lea&ershi)lue can increase its -rice since it is in the maturit% stage )lue shoul& maintain a high -rice to maintain a high qualit% image.

1'% 'nformation sources in international market research can be classifie& into internal an& external sources. 0hich <Answer> of the following is not an internal information source2 +a, +b, +c, +&, +e, Sales re-orts >ommittee re-orts 'n(entor% recor&s 9inancial an& management accounting recor&s ?ata on 'nternet.

1(% 'nformation relate& to integrati(e networks like -h%sical structures" retail an& &istribution networks" a(ailabilit% <Answer> an& costs associate& with these networks is known as

+a, +b, +c, +&, +e,

*olitical &ata 9oreign exchange &ata 'nfrastructure &ata Marketing &ata :egal an& regulator% &ata.

1)% *rimar% &ata is generate& for the first time b% the researcher. 't is not eas% to obtain &ata from -rimar% sources in <Answer> international markets. 0hich of the following is1are the -roblem+s, face& b% an international researcher while collecting -rimar% &ata2 '. ''. '''. '3. +a, +b, +c, +&, +e, =esearchers face -roblems in &efining the sam-le. =esearchers ha(e &ifficulties in &efining the ob4ecti(e of the research being con&ucte&. ?ifferent countries ha(e &ifferent languages so questionnaire has to be translate& into the nati(e language. 'n man% countries researchers &o not fin& establishe& marketing research institutions an& ma% ha(e to &e-en& on tem-orar% sources. .nl% +', abo(e )oth +', an& +'', abo(e +'," +'', an& +''', abo(e +'," +''', an& +'3, abo(e All +'," +''," +''', an& +'3, abo(e.
<Answer>

1 % 0hich of the following is not true with res-ect to the ex-erience cur(e2 +a, +b, +c, +&, +e, 't sa%s that as the total accumulate& ex-erience of a firm in the in&ustr% increases" it incurs less costs for -ro&ucing a -ro&uct 0hen a firm increases -ro&uction" its fixe& costs &o not change because an increase in -ro&uction brings &own cost -er unit 'm-ro(ing material an& resource management hel-s achie(e economies of scale in the long run 'm-ro(ing su--lier relationshi- hel-s com-anies achie(e economies of scale in the long run >ustomi<ing the -ro&ucts hel- com-anies achie(e economies of scale in the long run.

1*% The &irector of marketing &e-artment at 5omeMa&e +which manufactures an& sells home im-ro(ements <Answer> +furnishings, like furniture" &ecorati(es etc., com-an% has 4ust com-lete& &emogra-hic research on the total market for home im-ro(ement su--lies. 0hich of the following &emogra-hic &ata woul& be his best choice for &e(elo-ing market segmentation strateg%2 '. ''. '''. '3. +a, +b, +c, +&, +e, 'ncome le(el &ata about home im-ro(ement bu%ers. :ifest%les of home im-ro(ement bu%ers. 5ome im-ro(ement usage -atterns among bu%ers. 3alues of home im-ro(ement bu%ers. .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e +'," +'', an& +''', abo(e All +'," +''," +''', an& +'3, abo(e.
<Answer>

20% 0hich of the following is not a characteristic of goo& online communities with regar& to global markets2 +a, +b, +c, +&, +e, Management -hiloso-h% ?uration Membershi- criteria Share& context Mo&eration.

21% After setting the criteria for the target market" global target market strateg% has to be selecte&. En&ifferentiate& <Answer> global marketing strateg% is one of them. 0hich of the following is1are true with res-ect to un&ifferentiate& global marketing strateg%2 '. Marketers ser(e the market b% &e(elo-ing a uni(ersal marketing mix strateg% that ser(es the nee&s of most of the customers" ignoring the nee&s of a few. ''. This strateg% gi(es short-term cost sa(ings. '''. Esuall%" new firms with limite& resources o-t for this strateg%. '3. 't ma% not work in mature markets where the nee&s of the customers are more &i(erse.

+a, +b, +c, +&, +e,

.nl% +', abo(e .nl% +'', abo(e +'," +'', an& +'3, abo(e +'," +'', an& +''', abo(e All +'," +''," +''', an& +'3, abo(e.
<Answer>

22% As organi<ations grow globall%" the% fin& it &ifficult to manage their wi&es-rea& o-erations. 0hich of the following is1are not true with regar& to formal control metho&s2 '. ''. '''. '3. +a, +b, +c, +&, +e, >om-anies a&o-t formal control metho&s for e(aluation. 't is base& on s-ecific -lans an& targets that are to be achie(e&. 't &oes not use metho&s as bu&geting or -lanning. 't requires face-to-face communication between hea&quarters staff an& subsi&iaries staff. .nl% +'', abo(e )oth +', an& +'', abo(e )oth +''', an& +'3, abo(e +'," +''', an& +'3, abo(e +''," +''', an& +'3, abo(e.

23% Akbar wante& to -urchase a Merce&es-)en< car in most of his a&ult life. 5e &i& extensi(e research on &ifferent <Answer> Merce&es-)en< car mo&els. 9inall%" at the age of G0" he achie(e& the income le(el to be able to -urchase one. The Merce&es is an exam-le of a+n,C +a, +b, +c, +&, +e, S-ecialt% -ro&uct >onsumer -ro&uct >on(enience -ro&uct )usiness -ro&uct Ensought -ro&uct.

2&% Transfer -ricing is an issue of ma4or concern for com-anies o-erating internationall%. 0hich of the following <Answer> is1are true with regar& to transfer -ricing2 '. ''. 't is also referre& to as intra-com-an% -ricing. 't &etermines the success of the organi<ation b% influencing the -erformance of the subsi&iar%" the executi(e com-ensation" an& the taxes -ai&. '''. The ob4ecti(e of transfer -ricing +from the -oint of (iew of the firm, is to ensure subsi&iar% efficienc%. +a, +b, +c, +&, +e, .nl% +', abo(e .nl% +'', abo(e )oth +', an& +'', abo(e )oth +'', an& +''', abo(e All +'," +'', an& +''', abo(e.

2'% At the Sun&ae Sam-ler" customers -lace their or&ers" watch their ice-cream sun&aes being -re-are&" an& then <Answer> quickl% eat the sun&aes in the store before the ice cream melts. This is an exam-le of which of the following characteristic of ser(ices2 +a, +b, +c, +&, +e, 'nse-arabilit% 'ntangibilit% 5eterogeneit% *erishabilit% ?e-en&enc%.

2(% There are (arious constraints in the &esigning of international channels so that the% fit the com-an%/s ob4ecti(es. <Answer> 0hich of the following is not a characteristic relating to customers constraint in &istribution channels in &ifferent countries2 +a, +b, +c, +&, +e, ?egree of stan&ar&i<ation 'ncome Sho--ing habits Heogra-hical &istribution =eaction to &ifferent selling metho&s.

2)% A bran& is a com-an%/s strategic asset. 0hich of the following is1are the as-ect+s, that ha(e to be taken into <Answer> consi&eration while &eci&ing a bran& name for the global market2 G

'. ''. '''. '3. +a, +b, +c, +&, +e,

The bran& name shoul& not ha(e an% negati(e connotation. 't shoul& &ifferentiate the -ro&uct from other similar -ro&ucts. The name must in&icate the -ro&uct/s ma4or benefits. 't must not be com-atible with other -ro&ucts in the -ro&uct line. .nl% +', abo(e .nl% +'', abo(e +'," +'', an& +'3, abo(e +'," +'', an& +''', abo(e All +'," +''," +''', an& +'3, abo(e.

2 % *ublicit% is an im-ortant (ariable of the -romotional mix. 0hich of the following is not true with res-ect to <Answer> -ublicit%2 +a, +b, +c, +&, +e, 't is -rimaril% informati(e 't &oes not i&entif% the s-onsor an& mostl% is free 't is more ob4ecti(e that an a&(ertisement 'nformation -ro(i&e& as a -art of -ublicit% is re-etiti(e 't is more sub&ue& in tone com-are& to an a&(ertisement.

2*% Son%" a ma4or electronic goo&s +T3s" walkman etc., manufacturing an& selling com-an%" intro&uce& ;walkman/<Answer> in the market. Soon after it launche& the -ro&uct in the market" man% other electronic goo&s manufacturing com-anies launche& the similar -ro&ucts. +i.e. with similar tra&emark an& &esign etc.,. This form of bran& -irac% is an exam-le of +a, +b, +c, +&, +e, >ounterfeiting *assing off =e(erse engineering .utright -irac% Absolute -irac%.

30% The Heneral Agreement on Tra&e an& Ser(ices +HATS, is a (oluntar% agreement &esigne& to facilitate tra&e in <Answer> ser(ices. 0hich of the following ser(ice sectors are not co(ere& b% HATS2 +a, +b, +c, +&, +e, E&ucation business >onstruction an& engineering ?istribution Air trans-ort 9inancial. +,- O. !+#/IO, "

!ection B : #aselets ('0 Mar$s)

This section consists of questions with serial number 1 I !. Answer all questions. Marks are in&icate& against each question. ?etaile& ex-lanations shoul& form -art of %our answer. ?o not s-en& more than 110 - 1@0 minutes on Section ).

#aselet 1
0ea1 t2e caselet care3ull4 an1 ans5er t2e 3ollo5ing 6uestions:
<Answer> 1% 0hich of the following wa%s of marketing is better for :e(i Strauss J >om-an% I &e(elo-ing a website to sell their 4eans online an& -ro(i&e all fulfillment ser(ices or through retailers or a combination of both2 8ustif% %our answer. ( ( marks, <Answer> 2% Ex-lain the (arious as-ects that :e(i has to consi&er while &esigning 'nternet strateg% as an effecti(e marketing tool to sell its 4eans. ( ) marks, 3% :e(i is fin&ing it increasingl% har& to charge &ifferent -rices in &ifferent markets. + ! marks, <Answer>

Ex-lain the necessit% for :e(i to maintain &ifferent -rices for &ifferent markets. :e(i Strauss J >om-an% a--roache& a website &e(elo-ment consultant to assist it in &e(elo-ing a website for Euro-e. To e-tail or not to e-tail is a question facing man% tra&itional com-anies in to&a%Ds ra-i&l% e(ol(ing #Aew Econom%.$ The answer is not the foregone conclusion it once was. )% @000 o(er 1F0 so-calle& &ot-com com-anies ha& gone out of business. E(en tra&itional retailers such as 0al-Mart" 8>*enne%" an& others that rushe& to embrace e-commerce an& launch websites when the 'nternet first took off later with&rew an& relaunche&. Although ex-erts insist business-to-consumer e-tailing is here to sta% +an& ma% one &a% -ro(e -rofitable," some com-anies ha(e -la%e& it more cautiousl% until 'nternet -enetration attains critical mass an& consumer beha(ior becomes easier to -re&ict. 'n the Enite& States" :e(i ran a six-month ex-eriment of selling the G01 bran& of 4eans (ia its E.S. website an& -ro(i&ing all the fulfillment ser(ices in-house. 5owe(er" it close& the site when channel friction &e(elo-e& with retailers such as Mac%Ds an& 8>*enne%" who &i& not like :e(iDs 0eb com-etition. :e(i has a&o-te& a #wait an& see$ a--roach to the 'nternet. 't re(am-e& all its websites" an& in Euro-e it has concentrate& on making the site more -ro&uct focuse&. The com-an% now wants to consi&er the -ossibilit% of a full-scale -ush into e-commerce in Euro-e on its relaunche& website" www.eu.le(i.com. The final &ecision to sell online has not been reache&" but the 4eans retailer &oes want to consi&er the best a--roach. 't is also testing a setu- for selling online in the Enite& States through e-tailers such as 8>-enne%.com an& Mac%s.com. :e(i ho-es to create a fool-roof e-commerce strateg%" which coul& either be to go &irect" sell through establishe& e-tailers" or to combine the two a--roaches. :e(i has ha& -roblems maintaining sales. Some of the -roblems can be attribute& to changes in market beha(ior. Loung consumers" who regar& :e(i/s as 4eans for their -arents or e(en gran&-arents" are bu%ing more st%lish 4eans ma&e b% the Ha-" Tomm% 5ilfiger" *olo =al-h :auren" an& a host of newcomers such as Mu&& an& 8A>.. At the same time" lower--rice& bran&s sol& b% 0al-Mart an& Sears are eating into :e(i/s sales. 8>*enne% has built its Ari<ona bran& into a B1 billion business in less than ten %ears b% -romoting high st%le -lus *enne%/s (alue. Euro-ean sales ha(e also suffere& another -roblem--arallel im-orts. :e(i Strauss likes to assure its customers that its G01 4eans in *aris" 9rance" are the same as in *aris" Texas. 0ell" not exactl% the sameC" 9rench Sols cost more than twice as much as American ones. The com-an% is suing @F Euro-ean retailers" inclu&ing Tesco" a )ritish su-ermarket chain" for selling chea- :e(i 4eans im-orte& from unofficial sources outsi&e the Euro-ean Enion. >om-anies such as :e(i are fin&ing it increasingl% har& to charge &ifferent -rices in &ifferent markets. EE legislation outlaws -arallel im-orts of chea- bran&e& goo&s" such as 4eans or >?s" from outsi&e the EE" although it isn/t &ifficult to skirt the law. Shar- tra&ers can easil% bu% -ro&ucts where the% are chea- an& resell them where the% are &ear. Since -arallel tra&ing is legal between countries within the EE/s single market" &ifferential -ricing for :e(i 4eans among countries will ha(e to be a&&resse& because selling on the 'nternet makes it eas% for someone in 9rance to bu% 4eans in Englan& if the -rice is less. :e(i is intereste& in what some consi&er the next big e-commerce wa(eC custombuilt -ro&ucts for markets of one. The mass market #one si<e fits all$ a--roach is a withering anachronism" an& :e(i is consi&ering incor-orating in its website the ca-acit% to custom buil& an& &eli(er 4eans an& ?ockers in units of one. 9or se(eral %ears :e(i has ha& a han&ful of brick-an&-mortar stores that allow customers to create the 4eans the% want b% -icking from six colors" three basic mo&els" fi(e &ifferent leg o-enings" an& two t%-es of fl%. The customer/s waist" butt" an& inseam are measure& an& a -lain -air of test-&ri(e 4eans is trie& on to make sure the fit is satisfactor% before the or&er is -unche& into a 0eb base& terminal linke& to the stitching machines in the factor%. Two to three weeks later the 4eans arri(e in the mail. :e(i is consi&ering -utting that ca-abilit% on the 0eb. >ustomers woul& go to a !

retail store" get measure&" store the measurements on the 0eb" an& then use those measurements when or&ering (ia the 0eb. 0hether %ou want slim-fit" bagg% or engineere&" flare& or boot-cut" low-rise" waist or no waist" cotton" stretch cotton" or coate& cotton" &r%-stone" &istresse&" &econstructe&" &irt%" or o(er-&%e& 4eans" :e(i can &eli(er. An& -erha-s shorten the turnaroun& time from two weeks to FM hours. At this time" :e(i has not ma&e a &efinite &ecision on whether to sell through websites an& -ro(i&e all fulfillment ser(ices" acce-t or&ers o(er the 'nternet an& &irect all sales to -artici-ating retail stores" or some combination. +,- O. #"!+7+/ 1

#aselet 2
0ea1 t2e caselet care3ull4 an1 ans5er t2e 3ollo5ing 6uestions: &% 3i&esh Sanchar Aigam :t&. +3SA:," a go(ernment owne& 'n&ian telecom com-an% became a -art of the Tata Hrou-. 0hat efforts &i& Tata un&ertake to make 3SA: a global lea&er in wholesale (oice2 '% #)u%ing com-anies is eas% enough" integrating o-erations an& le(eraging the -ro4ecte& s%nergies is an extremel% &ifficult an& challenging task.$ Ex-lain. .nce u-on a time" there was a go(ernment-owne& 'n&ian telecom com-an% calle& 3i&esh Sanchar Aigam :t&" +3SA:,. Then" it became a -art of the Tata Hrou- on 13 9ebruar% @00@. 9i(e %ears later" itDs still an 'n&ian com-an%" but it is the worl&Ds largest -la%er in wholesale (oice" carr%ing nearl% @0 billion minutes of traffic annuall%" has o-erations in 30 countries" an& is able to offer (oice &ata an& mobile (alue-a&&e& ser(ices in @F0 countries an& territories. Aroun& @G -er cent of its em-lo%ees are locate& o(erseas an& nearl% K0 -er cent of its re(enue comes from abroa&" making 3SA: 'n&iaDs first telecom MA>. 3SA: managing &irector an& >E. A. Srinath bagge& Telecom AsiaDs D>E. of the LearD awar& an& 3SA: was chosen as the worl&Ds best wholesale carrier at the 0orl& >ommunications Awar&s" :on&on as well as the best wholesale carrier in Asia *acific. Ama<ing as it ma% be" it is not a result of a fair% go&mother wa(ing a magic wan&. )ehin& the magic is goo& ol& elbow greaseN long term grou- strateg%" taking a&(antage of market o--ortunities" regulator% changes an& technological breakthroughs" making the right &ecisions at the right time an& I most im-ortant of all I the concerte& an& &e&icate& efforts of its -eo-le to succee& in the face of a&(ersit%. >ustomer focus an& rein(ention are the &efining changes that ha(e marke& this makeo(er. 3SA:Ds transformation from a slee-% *SE to an aggressi(el% ex-an&ing global communications com-an% hol&s se(eral lessons for the new outwar&-boun& 'n&ia 'nc. )eing -art of the Tata Hrou- has -la%e& a ma4or role. Srinath ex-lains" O0orking un&er the umbrella of the Tata Hrou- has been (er% beneficial. All our acquisitions ha(e been ma&e -ossible onl% with the acti(e assistance of the grou-. 0e ha(e an un&erl%ing set of beliefs" (alues an& culture that sets us a-art from other cor-orates. ' am able to &raw u-on the resources of other grou- com-anies. ' ha(e T>S to helme with 'TN ' ha(e TTS: to hel- me with &omestic wireless networks.O 0hen the Tata Hrou- took o(er 3SA: on 13 9ebruar% @00@" it ha& a mono-ol% on international long &istance (oice in 'n&ia I which accounte& for nearl% 0 -er cent of its re(enue I an& was a lea&ing 'nternet ser(ices -ro(i&er +'S*, in 'n&ia. )ut the ':? mono-ol% was to en& on 1 A-ril @00@" in less than two months. 0ith its -rinci-al source of re(enue un&er imme&iate threat" &i(ersification an& rein(ention were a question of necessit%" rather than an ins-ire& stroke of genius. The com-an% ha& been &ealing -re&ominantl% with telecom com-anies as a mono-ol% an& therefore ha& limite& customer an& market focus. So one of the first tasks was to bring in sales an& marketing ex-erts from other Tata Hrou- com-anies an& elsewhere" who coul& buil& the marketing skills an& machiner%" brick b% brick. M
<Answer>

+ M marks,
<Answer>

+ ! marks,

)eefing u- the infrastructure in terms of strengthening the core -rocesses followe&. O0e ran a s-ecial -rogramme calle& D>onfluenceD at the Tata Management Training >entre +TMT>, for the to- F0 officers of the senior management team"O Srinath recalls. Simultaneousl%" the com-an% launche& a -artici-ati(e organisation restructuring exercise" first at the hea&quarters an& then at the regional an& branch offices" where the em-lo%ees themsel(es took on -art of the res-onsibilit% of i&entif%ing -eo-le for s-ecific -ositions. The sil(er lining was the calibre of the -eo-le in 3SA:N the skills of man% of the technical -eo-le were among the best in the worl& an& that ma&e things easier. The com-an% ha& the reach" the connecti(it%" an& the technical ca-abilit%. 't knew its customers an& su--liers. )ut the mono-ol% was to en& almost imme&iatel%. )esi&es" in an% case" ':? -rices" ke-t artificiall% high b% mono-ol% economics an& to crosssubsi&ise local call tariffs for so long" were falling fast. 3SA: ha& to look be%on& its existing businesses in &ea& earnest" an& fin& new o--ortunities for its sur(i(al an& growth. The com-an% starte& looking for new businesses" such as Aational :ong&istance +A:?," enter-rise &ata an& internet tele-hon% ser(ices. Mobilit% was not an o-tion as other com-anies in the Hrou- were alrea&% in the mobile market. 3SA: acquire& the business of Hem-lex +ES, in 8ul% @003" ?ishnet?S: from Sterling 'nfotech for =s.@!0 crore in march @00F" T%co Hlobal Aetwork +THA, in mi&-@00G an&" >ana&a-base& Teleglobe for B@3 million in @00K. 't imme&iatel% turne& 3SA: into the thir&-largest carrier of (oice minutes in the worl&. These acquisitions transforme& 3SA:. THA ga(e 3SA: -henomenal connecti(it%" almost unique in the worl&. Teleglobe brought a huge network that ma&e 3SA:Ds business trul% global. As >haukar -oints out" O't is reasonabl% eas% to create har& assets" but it is (er% &ifficult to create soft assets. The acquire& knowle&ge of -eo-le in sa%" G0 com-anies an& 100 geogra-hies" is (er% &ifficult to generate. 't takes a long time to collect" an& requires lots of (erification" testing an& correction. Hetting it rea&%ma&e is a massi(e a&(antage.O )ut the histor% of mergers an& acquisitions +MJAs, is not alwa%s a ha--% one. )u%ing com-anies is eas% enoughN integrating o-erations an& le(eraging the -ro4ecte& s%nergies is an extremel% &ifficult an& challenging task. An&" when the MJAs s-an &ifferent continents" language an& culture are a&&itional s-anners in the works. )ut 3SA: has ha& a smoother ri&e than most others" thanks to the at%-ical angle it a--roaches the issue. O0e &i& not look at challenges as &eterrents an& ne(er thought of them as insurmountable"O >haukar sa%s" a&&ingC O*roblems are not something unex-ecte& in an MJA. )ut o(ercoming them is what the fun an& ha--iness in meeting a challenge an& achie(ement orientation is all about.O The acquisitions ha(e also enable& 3SA: to buil& a significant -resence in the enter-rise business in 'n&ia an& arm it with the wherewithal to take the same ser(ices to the global market. Sa%s Srinath" O3SA: has transforme& itself from an international long &istance (oice com-an% in 'n&ia to a telecom multi-ser(ices MA>.O 9ittingl%" 3SA: shoul& close its fifth %ear with close to =s. "000 crore in re(enue going b% the -monthl% re-orte& -erformance" the highest for the com-an% in its histor%. Turno(er went &own from about =s.!"000 crore to about =s.3"G00 crore after 3SA: lost its mono-ol%" but now" as a -rou& Srinath sa%s" O0e are getting back to the -re--ri(atisation re(enue le(els.O +,- O. #"!+7+/ 2

#aselet 3
0ea1 t2e caselet care3ull4 an1 ans5er t2e 3ollo5ing 6uestions:
<Answer> (% Anal%<e the Samsung/s bran& buil&ing initiati(es in the global consumer electronics market. + M marks, )% Samsung ma&e so man% efforts to buil& global bran&. Ex-lain the a&(antages of + ! marks, <Answer>

creating global bran&s for the com-anies like Samsung. Samsung was establishe& in 1 K as the flagshi- com-an% of Samsung >or-oration. 't was the thir& largest -la%er in the 7orean electronics market after :uck% Hol&star +:H, an& ?aewoo. Samsung achie(e& fast growth through ex-orts" which constitute& aroun& !06 of its total -ro&uction. Most of the ex-orts were to the ESA on .riginal Equi-ment Manufacturer +.EM, basis. 't su--lie& com-onents for high tech in&ustries in the ESA. 'n the earl% 1 !0s" Samsung &eci&e& to (enture into the tele(ision market an& in 1 !@ it starte& -ro&uction of black J white tele(ision sets for the local market. After its success in the tele(ision market Samsung set u- its home a--liances -lant in 1 !3. )% 1 !F it starte& manufacturing refrigerators an& washing machines. 'n 1 3" as a first ste- in its globali<ation &ri(e" Samsung acquire& a new cor-orate i&entit%. 't change& its logo an& that of the grou-. 'n the new logo" the wor&s Samsung Electronics were written in white color on a blue color backgroun& to re-resent stabilit%" reliabilit% an& warmth. The wor&s Samsung Electronics were written in English so that the% woul& be eas% to rea& an& remember worl&wi&e. The logo was sha-e& elli-tical re-resenting a mo(ing worl& - s%mboli<ing a&(ancement an& change. The first an& last letters DSD an& DH"D broke out of o(al sha-e -artiall% in or&er to connect the interior with the exterior. Accor&ing to com-an% sources" this &esign re-resente& the com-an%Ds wish to connect itself with the worl& an& ser(e societ% as a whole. To change its bran& image" Samsung &eci&e& to associate itself with global s-ort e(ents. 'n 1 M" when Seoul hoste& the .l%m-ics" Samsung became the official s-onsor of the wireless technolog% to the games. This mo(e hel-e& it to boost its image worl&wi&e. ?ue to its bran& buil&ing acti(ities across the worl&" Samsung re-orte& a net -rofit of @. G trillion won in @001 on total re(enues of 3@.F trillion won. 'n 8ul% @001" Samsung entere& into a marketing alliance with A.: Time 0arner to work together on A.:T3 set-to- box with the Ti3o recor&ing ser(ice. 'n return" Samsung -ro&ucts woul& be -romote& in A.: Time 0arnerDs marketing initiati(es. ?ue to this alliance. Samsung -ro&ucts were -romote& in *eo-le" Entertainment 0eekl% an& S-orts 'llustrate& of A.: Time 0arnerDs maga<ines. 'n earl% @003" Samsung announce& that it woul&-concentrate on ES an& Euro-ean markets" where its bran& was consi&ere& weak in -ro&uct categories other than mobile -hone han&sets. 7im Sai&" O.ur bran& is weaker in Euro-e an& the E.S." but in cell -hones weDre -rett% strong. 'n those regions weDll be e(en more focuse&. 0ireless an& &igital T3 are the two areas weDll focus on in Euro-e an& the E. S.O Samsung em-hasi<e& on bran& buil&ing when entering new markets. 0hen entering 'n&ia" one of the worl&Ds largest markets" Samsung reali<e& that its -ro&ucts were unknown in 'n&ian markets. 'n 'n&ia" like elsewhere in the worl&" 8a-anese goo&s were consi&ere& to be of better qualit% than 7orean goo&s. To -ro4ect itself as a high technolog% com-an%" Samsung un&ertook a two-month cor-orate cam-aign" which highlighte& the com-an%Ds strengths in semicon&uctors" colour -icture tubes" colour tele(isions an& mobile -hone han&sets. 'n a&&ition to strengthening the Samsung bran& in s-ecific markets" the com-an% also launche& global a&(ertisement cam-aigns to enhance its bran& image worl&wi&e. 'n 1 !" Samsung launche& its first cor-orate a&(ertising cam-aign - Aobel *ri<e Series. This a& was aire& in nine languages across Euro-e" the Mi&&le East" South America an& >'S countries. The a&(ertisement showe& a man +re-resenting a Aobel *ri<e :aureate, -assing from one scene to another. As the man -asses through &ifferent scenes" Samsung -ro&ucts transform into more a&(ance& mo&els. Accor&ing to com-an% sources" the i&ea was to con(e% the message that Samsung uses Aobel *ri<e :aureatesD i&eas for making its -ro&ucts. Samsung also signe& an agreement with the Aobel *ri<e foun&ation to s-onsor the Aobel *ri<e Series -rogram" worl&wi&e. The -rogram was &e(elo-e& b% the Aobel 9oun&ation. Swe&en to s-rea& achie(ements of the Aobel *ri<e :aureates. 10

'nitiall%" SamsungDs a&(ertising acti(ities were &ecentrali<e&. The com-an% em-lo%e& (arious a& agencies to &esign cam-aigns for its -ro&ucts. 5owe(er" in 1 " 7im forfeite& SamsungDs agreements with aroun& GG a&(ertising firms an& signe& a BF00 million contract with a ES base& a& agenc%" 9oote" >one J )el&ing +9>),. 9>) create& global cam-aigns for the com-an% +featuring mo&els carr%ing the com-an%Ds ga&gets," which highlighte& the su-erior technolog% of Samsung -ro&ucts. 'n 1 " Samsung un(eile& a new cam-aign in the ES with a new slogan I ;Samsung ?'H'TallN E(er%oneDs in(ite& - on the e(e of its 30th anni(ersar%. Samsung re&esigne& its logo to con(e% its ob4ecti(eC making life fille& with con(enience" abun&ance an& en4o%ment through inno(ati(e &igital -ro&ucts. The new slogan" Samsung ?igitAll" ex-resse& the com-an%Ds aim of -ro(i&ing &igital -ro&ucts ;9or all generations" 9or all customers an& 9or all -ro&ucts./ 'n A-ril @001" Samsung launche& its new bran& cam-aign" which was create& b% True Aorth >ommunicationsD 9>) 0orl&wi&e. This cam-aign was aire& in aroun& 30 countries with a bu&get of BF00 million. As -art of the bran& cam-aign" the com-an% a&(ertise& an 30-secon& T3 s-ots on (arious channels such as >AA" 351" ES*A" TAT an& A)> &uring A)A games. The first a&(ertisement in the series - DAnthem/ -was set in E.7. The a&(ertisement showe& &ifferent Samsung -ro&ucts - flat screen T3 monitor" M*3 *la%er" watch -hone being use& b% -eo-le from &ifferent ethnic backgroun&s. The (oice o(er wasC OThere is a worl& where %ou see" hear an& feel things like ne(er before" where &esign awakens all %our senses. This is the worl& of Samsung an& e(er%oneDs in(ite&.O At the en& of the commercial the com-an%Ds tagline ;?igitAll" E(er%oneDs in(ite&/ a--eare& The D?igitAllD cam-aign was launche& across all countries where the com-an% ha& a -resence an& across all -ro&uct lines. The cam-aign in(ol(e& the s-onsorshi- of e(ents at global an& regional le(els. =e-orte&l% aroun& 30 -eo-le from SamsungDs Seoul an& Aorth America offices worke& with 9>) on the cam-aign. 'n @001" Samsung a&&e& the wor& D0.0D to its marketing cam-aigns to show the a&miration of consumers for its inno(ati(e but affor&able -ro&ucts. 't was re-orte& that SamsungDs @001 global bran& cam-aign increase& consumer awareness about Samsung from M3.!6 in @000 to 1.@6 in @001" an& in the ES" bran& awareness an& -reference for Samsung increase& from GK.F6 to !F.16 for the same -erio&. 'n A-ril @00@" Samsung a&o-te& 'nternet marketing to reach high--rofile consumers. 't concentrate& on increasing bran& awareness" web traffic" an& gi(e -ro&uct information with e(er% a&(ertisement. 't bought a& s-ace on more than G0 websites such as 9ortimc.com" 9orbcs.com an& )usiness0eek.com. At same time" Samsung continue& to a&(ertise in the -rint an& tele(ision. +,- O. #"!+7+/ 3 +,- O. !+#/IO, B

!ection # : "pplie1 /2eor4 (20 Mar$s)

% This section consists of questions with serial number M - . Answer all questions. Marks are in&icate& against each question. ?o not s-en& more than @G -30 minutes on Section >.
<Answer>

*%

The 'nternational Monetar% 9un& +'M9, was concei(e& of b% members of the unite& nations at the )retton 0oo&s >onference" Aew 5am-shire" E.S.A." in 8ul% 1 FF" an& was establishe& the following %ear. Ex-lain the main o-erations -erforme& b% 'M9. + 10 marks, )efore selecting a s-ecific channel for &istribution of -ro&ucts or ser(ices in + 10 marks, international markets" a firm e(aluates channel alternati(es on the basis of (arious criteria. 'n this light" ex-lain the criteria for e(aluating channel 11

<Answer>

alternati(es.

+,- O. !+#/IO, # +,- O. Q8+!/IO, P"P+0

1@

!uggeste1 "ns5ers International Management - II (MB3H1IB) : October 200

!ection " : Basic #oncepts
"ns5er 1% > 0eason A floating s%stem is goo& because it allows go(ernments to a&&ress their balance of < TOP > -a%ments -roblems b% ha(ing flexible exchange rates. 't also allows go(ernments to change the exchange (alue in tune with ex-ort -olicies. 'n the fixe& exchange rate s%stem the go(ernment nee&s to manage its balance of -a%ments +)o*, situation. *ricing &ecisions cannot be ma&e in isolation because -ricing affects other marketing < TOP > &ecision (ariables an& &etermines 3% > The customer/s -erce-tion of (alue. The le(el of moti(ation of interme&iaries. *romotional s-en&ing an& strateg%.

2% E

Translation ex-osure arises on the basis of accounting for transactions between tra&ing < TOP > com-anies. The hol&ing com-an% in a countr% nee&s to inclu&e the accounts of its subsi&iar% in its balance sheet. 'f transactions are to be recor&e& at the historical rates i.e. the rate at which assets were first acquire& or transferre&" there is no ex-osure. Economic ex-osure is &ifficult to assess as it in(ol(es a sub4ecti(e -ro4ection of future cash flows. 5ewlett *ackar& +5*, an& Microsoft woul& be entering into a 4oint (enture in their < TOP > -urchase of the 7orean firm. A 4oint (enture occurs when two or more com-anies share ownershi- of a &irect in(estment. Absolute a&(antage theor% assumes that the trans-ortation costs in(ol(e& in selling a < TOP > commo&it% in a countr% other than the one in which it is -ro&uce& are either nonexistent or insignificant. Another assum-tion the theor% makes is that -rices are com-arable across countries. Accor&ing to the theor% of com-arati(e a&(antage two countries woul& tra&e e(en when one countr% has absolute a&(antage in all -ro&ucts or another countr% &oes not ha(e absolute a&(antage in an% -ro&ucts.
< TOP 'm-ro(ement in econom% is one of the facilitating factors for 'nternational retailing. > =aising finance" *ro4ect a&(isor%" 9inancial restructuring an& Mergers an& Acquisitions all are acti(ities -erforme& b% an in(estment banker in 'nternational banking.

&% )

'% >

(% ?

)% A %> *% E

Exten&e& fun& facilit% is use& b% countries with a more -rotracte& balance-of--a%ments < TOP > -roblem with roots in the structure of the econom% an& hence is long term. The wi&th of the -ro&uct mix is the total number of -ro&uct lines a com-an% carries. < TOP > The length of the -ro&uct mix is the total number of items in that mix. The international centre for settlement of in(estment &is-utes +'>S'?, has certain < TOP > a&&itional facilit% rules to a&minister certain -rocee&ings which ma% fall outsi&e the -ur(iew of the con(ention" namel%C >onciliation an& arbitration -rocee&ings where either the state -art% or the home state of the foreign national is not a member of '>S'?. 0here a &is-ute is not an in(estment &is-ute an& relates to transactions that &istinguish it from or&inar% commercial transactions. '>S'? also &oes certain #fact fin&ing -rocee&ings$ for an% state or foreign national" who ma% want an enquir% #to examine an& re-ort on facts$.

10%A 11%)

>om-an% name an& in&i(i&ual -ro&uct nameC 9or& a&o-ts this bran&ing strateg%. 't < TOP > a&(ertises com-an%/s name -rominentl% along with the -ro&ucts. 'n a&ministrati(e control strateg% the to- management of the -arent com-an% takes full < TOP > control of the subsi&iar% with the hel- of so-histicate& management information s%stems an& cor-orate staff" who are s-ecialists in the fiel&. Market SkimmingC 9irms intro&uce their -ro&ucts in the market -lace b% charging a 13
< TOP

12%>

high -rice. The% charge a high -rice for the uniqueness of their -ro&ucts. As the com-etition grows" the% lower their -rice. This strateg% is a--ro-riate when the -ro&uct is trul% inno(ati(e. 13%? ?isa&(antages of contract manufacturing entr% mo&e 1&%> There is a -otential &anger that contract manufacturer ma% become a future com-etitor. :ow labor cost countries usuall% ha(e low labor -ro&ucti(it%. The qualit% of the -ro&uct cannot be assure&.

>

< TOP >

'n the maturit% stage" sales increase at a &ecreasing rate. *rice com-etition intensifies" < TOP > an& -rofits &ecline. So" )lue must -rice its -ro&ucts lower than the other bran&s to maintain its lea&ershi-. ?ata on 'nternet is an external information source in international market research. < TOP > =emaining all are internal information sources. 'nformation relate& to integrati(e networks like -h%sical structures" retail an& &istribution networks" a(ailabilit%" an& costs associate& with them is known as infrastructure &ata. The -roblems face& b% an international researcher while collecting &ata =esearchers face -roblems in &efining the sam-le. ?ifferent countries ha(e &ifferent languages so questionnaire has to be translate& into the nati(e language. 'n man% countries researchers &o not fin& establishe& marketing research institutions an& ma% ha(e to &e-en& on tem-orar% sources that ma% not be reall% reliable.
< TOP >

1'%E 1(%>

1)%?

1 %E

The ex-erience cur(e suggests that as the total accumulate& ex-erience of a firm in the < TOP > in&ustr% increases" it incurs less costs for -ro&ucing a -ro&uct. The ex-erience cur(e hel-s a com-an% re&uce costs &ue to (olume effects as well as learning effects. Accor&ing to the (olume effect" when a firm increases -ro&uction" its fixe& costs &o not change because an increase in -ro&uction brings &own the cost -er unit. Accor&ing to the learning effect" im-ro(ing material an& resource management" su--lier relationshi-s" an& stan&ar&i<ing -ro&ucts hel- a com-an% achie(e economies of scale in the long run. 5ere" the onl% &emogra-hic (ariable is age. So +a, is the answer.
< TOP >

1*%A 20%A 21%>

.nline communities generall% share the following characteristicsC Share& context" < TOP > membershi- criteria" si<e" &uration" mo&eration" an& outcomes. En&er un&ifferentiate& global marketing strateg%" marketers ser(e the market b% < TOP > &e(elo-ing a uni(ersal marketing mix strateg% that ser(es the nee&s of most of the customers" ignoring the nee&s of a few. Through this strateg% gi(es short-term cost sa(ings" it ma% not work in mature markets where the nee&s of the customers are more &i(erse. Aew firms with limite& resources o-t for concentrate& global marketing strateg%. >om-anies a&o-t formal control metho&s for e(aluation. 't is base& on s-ecific -lans < TOP > an& targets that are to be achie(e&. Statements +', an& +'', are true regar&ing formal control metho&s. Statements +''', an& +'3, are not true since informal control metho&s &o not use ob4ecti(e metho&s such as bu&geting or -lanning an& also it requires face-toface communication between hea&quarters staff an& subsi&iaries staff. The fact that Akbar &i& not consi&er another bran& shows that the car was a s-ecialt% < TOP > -ro&uct. 5e was aware of what he wante& an& woul& not acce-t a substitute for this -ro&uct. Transfer -ricing is an issue of ma4or concern for com-anies o-erating internationall%. < TOP > The following are true with regar& to transfer -ricing Transfer -ricing is also referre& to as intracom-an% -ricing. Transfer -ricing &etermines the success of the organi<ation b% influencing the -erformance of the subsi&iar%" the executi(e com-ensation" an& the taxes -ai&. 1F

22%>

23%A

2&%>

 2'%? 2(%A

The ob4ecti(e of transfer -ricing +from the -oint of (iew of the firm, is to ensure cor-oration-wi&e efficienc%.
< TOP > < TOP >

Ser(ices cannot be store& for future consum-tion. >onstraints relating to customersC The number of customers Heogra-hical &istribution 'ncome Sho--ing habits =eaction to &ifferent metho&s

2)%?

The following are the as-ects that ha(e to be taken into consi&eration while &eci&ing on < TOP > a bran& name for the global marketC The bran& name shoul& not ha(e an% negati(e connotation. 't shoul& not &ifferentiate the -ro&uct from other similar -ro&ucts. The name must in&icate the -ro&uct/s ma4or benefits. 't must be com-atible with other -ro&ucts in the -ro&uct line.
< TOP > < TOP >

2 %? 2*%)

'nformation -ro(i&e& as a -art of -ublicit% is not re-etiti(e. 'n -assing of -irac%" -ro&ucts are mo&ifie&" an& tra&e marks are a&a-te&. The -irate& -ro&uct is similar in a--earance" -honetic qualit% or meaning +of its name, to the original -ro&uct.

30%?

Air trans-ort ser(ices exclu&e& b% HATS I These ser(ices are controlle& b% a countr%/s < TOP > air traffic rights are not co(ere& b% HATS.

1G

!ection B : #aselets
1% 'n the Enite& States" :e(i ran a six-month ex-eriment of selling the G01 bran& of 4eans (ia its < TOP > E.S. website an& -ro(i&ing all the fulfillment ser(ices in-house. 5owe(er" it close& the site when channel friction &e(elo-e& with retailers such as Mac%Ds an& 8>*enne%" who &i& not like :e(iDs 0eb com-etition. :e(i has a&o-te& a Owait an& seeO a--roach to the 'nternet. 't re(am-e& all its websites" an& in Euro-e it has concentrate& on making the site more -ro&uct focuse&. The com-an% now wants to consi&er the -ossibilit% of a full-scale -ush into e-commerce in Euro-e on its relaunche& website" www.eu.le(i.com. The internet is a global network of man% networks connecting millions an& millions of com-uters together. >urrentl%" almost 30 million com-uters aroun& the globe are connecte& to the internet. To&a% the internet is an integral -art of business" of our en(ironment" an& e(en of our -ersonal li(es. Some -eo-le in rural areas are unable to -urchase goo&s online. 9or these t%-e of -eo-le &irect selling through retailes is beneficial. 't is better to maintain both online an& &irect selling +through retailers,. 'f it maintains both channel to sell 4eans there is more chanse to ca-ture the wi&e market area. Through internet marketing customer can or&er goo&s &irectl% to manufactures an& this ultimatel% re&uce the channel length. 'f the channel length is (er% small the -rofit margin to the com-an% is (er% high. This is exact o--osite in case of goo& marketing through retailers. 5ere the -rofit margin is (er% less for com-anies. >om-anies shoul& not full% &e-en& on either internet marketing or &irect marketing +through retailers,. >om-anies are now incor-orating 'nternet marketing strategies in their o(erall marketing -lan < TOP > to be able to take a&(antage of the o--ortunities that e-business has to offer. 0hile &esigning a strateg%" :e(i must consi&er that. 1. The 'nternet can be use& to re&uce marketing costs. 't shoul& not be (iewe& as 4ust another a&(ertising me&ium. 't can hel- business b% streamlining o-erations" re&ucing costs" forging customer relations" an& generating re(enues. E-business can create (alue for organi<ations if the% continuousl% use new technolog% to im-ro(e u-on their marketing s%stem an& if customer ex-ectations are continuousl% met. The 'nternet can be use& to buil& long-term relationshi-s with customers. @. The 'nternet can be integrate& into an organi<ationDs marketing an& communication -lan an& can be use& to buil& bran&s. 'f it is use& in combination with other &istribution an& me&ia channels" it can contribute significantl% in bran& buil&ing. 3. >on(entional marketing channel -artners must be a--reciate&. 0ith the 'nternet" it can &irectl% reach the consumer. )ut it shoul& not isolate other channel -artners. 't must tr% to use the 'nternet to buil& business for himself an& for his &istributors. F. 0ith the e(olution of the 'nternet" the customer has become more knowle&geable. 't must recogni<e the fact that most consumers can com-are -rices of -ro&ucts from (arious com-anies within minutes on the 'nternet. Therefore" it can either com-ete on -rice or con(ince the user of su-erior qualit%" but un&er all circumstances" it must aim to &eli(er what it -romise&. G. To use the 'nternet -otential to the o-timum" organi<ational hea&s must un&erstan& an& belie(e in its ca-abilit% an& the uses to which it can be -ut. .nl% then will the% be able to creati(el% ta- its -otential. 't is also im-ortant for them to i&entif% the -ro&ucts an& ser(ices an& the facets of the organi<ation that the% want highlighte& on the 'nternet. >om-anies such as :e(i are fin&ing it increasingl% har& to charge &ifferent -rices in &ifferent < TOP > markets. EE legislation outlaws -arallel im-orts of chea- bran&e& goo&s" such as 4eans or >?s" from outsi&e the EE" although it isn/t &ifficult to skirt the law. Shar- tra&ers can easil% bu% -ro&ucts where the% are chea- an& resell them where the% are &ear. Since -arallel tra&ing is legal between countries within the EE/s single market" &ifferential -ricing for :e(i 4eans among countries will ha(e to be a&&resse& because selling on the 'rtternet makes it eas% for someone in 9rance to bu% 4eans in Englan& if the -rice is less. *ricing refers to the (alue &etermination -rocess for a goo& or ser(ice" an& encom-asses the &etermination of interest rates for loans" charges for rentals" fee for ser(ices" an& -rices for goo&s. *ricing &ecisions are &ifficult to make e(en when a com-an% o-erates onl% in a 1K

2%

3%

&omestic market" an& the &ifficult% is still greater in international markets. Multi-le currencies" tra&e barriers" a&&itional cost consi&erations" an& longer &isribution channels make -rice &etermination more com-lex in international markets. Hlobali<ation of business has -ut increase& -ressure on the -ricing s%stems of com-anies which enter international markets. These com-anies ha(e to a&o-t their -ricing structures as the% gra&uate from being -urel% &omestic -la%ers to ex-orters" an& then to o(erseas manufacturers. The earlier -ricing structures use& b% them ma% no longer be a--ro-riate in the com-lex international en(ironment characterise& b% high com-etition" more global -la%ers" ra-i& changes in the technolog%" an& high s-ee& communication between markets. *ricing &ecisions cannot be ma&e in isolation because -ricing affects other marketing &ecision (ariables an& &eterminesC The consumer/s -erce-tion of (alue. The le(el of moti(ation of interme&iaries. *romotional s-en&ing an& strateg%. &% +33orts ma1e b4 /ata 9roup to ma$e :!,7 a global lea1er in 52olesale ;oice < TOP > .nce u-on a time" there was a go(ernment-owne& 'n&ian telecom com-an% calle& 3i&esh Sanchar Aigam :t& +3SA:,. Then" it became a -art of the Tata Hrou-. 9i(e %ears later" itDs still an 'n&ian com-an%" but it is the worl&Ds largest -la%er in wholesale (oice" carr%ing nearl% @0 billion minutes of traffic annuall%" has o-erations in 30 countries" an& is able to offer (oice &ata an& mobile (alue-a&&e& ser(ices in @F0 countries an& territories. 3SA: after became one of the com-anies un&er Tata grou- it acquire& so ma% firms both insi&e an& outsi&e the countr%. Tata grou- hel-e& 3SA: while acquiring the firms. Mergers an& acquisitions are not a sim-le task. 3SA: was a go(ernment-owne& com-an% an& its o-erations were limite& to 'n&ia onl%. 't &i& not acquire an% firm before it was merge& with Tata Hrou-. 3SA:" as a slee-ing -ublic sector unit it was not customer-oriente&. Tata grou- change& the entire culture of 3SA: an& i&entifie& the customer focus an& ma&e 3SA: a customeroriente& firm. Technolog% is one of the im-ortant as-ects to -ro(i&e better ser(ice to the customer with a lesser cost. 0ith the hel- of Tata grou- 3SA: a&o-te& latest technologies to -ro(i&e better ser(ices to the customers. 0ith the hel- of Tata grou- 3SA: i&entifie& more o--ortunities both insi&e an& outsi&e the countr%. 3SA: utili<e& those o--ortunities an& became a global -la%er in wholesale (oice. Tata grou- has so man% firms un&er its cor-orate umbrella like T>S" TTS: etc. T>: hel-s 3SA: with information technolog%" TTS: hel-s 3SA: with &omestic wireless network etc. Tata grou- encourage& long term grou- strateg% an& ma&e 3SA: to take right &ecisions at the right time. )eefing u- the infrastructure in terms of strengthening the core -rocesses followe&. Tata ran a s-ecial -rogramme calle& D>onfluenceD at the Tata Management Training >entre +TMT>, for the to- F0 officers of the senior management team. Tata launche& a -artici-ati(e organisation restructuring exercise" first at the hea&quarters an& then at the regional an& branch offices of 3SA:" where the em-lo%ees themsel(es took on -art of the res-onsibilit% of i&entif%ing -eo-le for s-ecific -ositions. 0ith the acti(e assistance of the Tata Hrou- 3SA: acquire& the business of Hem-lex +ES, in 8ul% @003" ?ishnet ?S: from Sterling 'nfotech for =s @!0 crore in march @00F" T%co Hlobal Aetwork +THA, in mi&-@00G an&" >ana&a-base& Teleglobe for B@3 million in @00K. 't imme&iatel% turne& 3SA: into the thir&-largest carrier of (oice minutes in the worl&. The acquisitions ha(e also enable& 3SA: to buil& a significant -resence in the enter-rise business in 'n&ia an& arm it with the wherewithal to take the same ser(ices to the global market. )u%ing com-anies is eas% enoughN integrating o-erations an& le(eraging the -ro4ecte& < TOP > s%nergies is an extremel% &ifficult an& challenging task. A merger can ha--en when two com-anies &eci&e to combine into one entit% or when one com-an% bu%s another. An acquisition alwa%s in(ol(es the -urchase of one com-an% b% another. The functions of s%nerg% 1!

'%

allow for the enhance& cost efficienc% of a new entit% ma&e from two smaller ones - s%nerg% is the logic behin& mergers an& acquisitions. Merger woul& gi(e a com-an% the o--ortunit% to ex-an& b% establishing their -resence in a host countr%. )% this com-anies able to a&o-t technolog% from the other business rather than s-en&ing the time an& mone% to &e(elo- it themsel(es. 'n the long run" this woul& cut costs an& im-ro(e -ro&ucti(it%. .ne ma4or -roblem that ma% be incurre& is cultural &ifferences between the two businesses. This ma% lea& to tension" conflict" an& stresses between the organi<ations" namel% its em-lo%ees" lessening the chances of a smooth merger. Man% times teams are &esigne& to &eal with an% -ossible conflicts that ma% arise as a result of the &ifferences in customs" (alues" an& norms. Mergers can cause &ee- o-erational an& -s%chological turmoil which can &istract the -eo-le who ha(e to make them work. Mergers can fail for man% reasons inclu&ing a lack of management foresight" the inabilit% to o(ercome -ractical challenges an& loss of re(enue momentum from a neglect of &a%-to-&a% o-erations. There will be goo& o-erating an& market s%nerg% between the bu%er an& seller" an& the newl% merge& com-anies will un&erstan& the im-ortance of sharing each others ca-ital" markets" an& technolog%. (% 'n 1 3" as a first ste- in its globali<ation &ri(e" Samsung acquire& a new cor-orate i&entit%. 't < TOP > change& its logo an& that of the grou-. 'n the new logo" the wor&s Samsung Electronics were written in white color on a blue color backgroun& to re-resent stabilit%" reliabilit% an& warmth. The wor&s Samsung Electronics were written in English so that the% woul& be eas% to rea& an& remember worl&wi&e. 'n 1 M" when Seoul hoste& the .l%m-ics" Samsung became the official s-onsor of the wireless technolog% to the games. This mo(e hel-e& it boost its image worl&wi&e. 0hen entering 'n&ia Samsung reali<e& that its -ro&ucts were unknown in 'n&ian markets. To -ro4ect itself as a high technolog% com-an%" Samsung un&ertook a two-month cor-orate cam-aign" which highlighte& the com-an%Ds strengths in semicon&uctors" colour -icture tubes" colour tele(isions an& mobile -hone han&sets. 'n 1 !" Samsung launche& its first cor-orate a&(ertising cam-aign - Aobel *ri<e Series. This a& was aire& in nine languages across Euro-e" the Mi&&le East" South America an& >'S countries. The a&(ertisement showe& a man +re-resenting a Aobel *ri<e :aureate, -assing from one scene to another. As the man -asses through &ifferent scenes" Samsung -ro&ucts transform into more a&(ance& mo&els. Accor&ing to com-an% sources" the i&ea was to con(e% the message that Samsung uses Aobel Samsung also signe& an agreement with the Aobel *ri<e foun&ation to s-onsor the Aobel *ri<e Series -rogram" worl&wi&e. The com-an% em-lo%e& (arious a& agencies to &esign cam-aigns for its -ro&ucts. 'n 1 " 7im forfeite& SamsungDs agreements with aroun& GG a&(ertising firms an& signe& a BF00 million contract with a ES base& a& agenc%" 9oote" >one J )el&ing +9>),. 9>) create& global cam-aigns for the com-an% +featuring mo&els carr%ing the com-an%Ds ga&gets," which highlighte& the su-erior technolog% of Samsung -ro&ucts. 'n 1 " Samsung un(eile& a new cam-aign in the ES with a new slogan I ;Samsung DIGITall; Everyone's invited - on the e(e of its 30 th anni(ersar%. Samsung re&esigne& its logo to con(e% its ob4ecti(eC making life fille& with con(enience" abun&ance an& en4o%ment through inno(ati(e &igital -ro&ucts. 'n A-ril @001" Samsung launche& its new bran& cam-aign" which was create& b% True Aorth >ommunications 9>) 0orl&wi&e. This cam-aign was aire& in aroun& 30 countries with a bu&get of BF00 million. As -art of the bran& cam-aign" the com-an% a&(ertise& an 30-secon& T3 s-ots on (arious channels such as >AA" 351" ES*A" TAT an& A)> &uring A)A games. 'n @001" Samsung a&&e& the wor& D0.0D to its marketing cam-aigns to show the a&miration of consumers for its inno(ati(e but affor&able -ro&ucts.

'n A-ril @00@" Samsung a&o-te& 'nternet marketing to reach high--rofile consumers. 't concentrate& on increasing bran& awareness" web traffic" an& gi(e -ro&uct information with e(er% a&(ertisement. 0esult o3 t2ese initiati;es: ?ue to its bran& buil&ing acti(ities across the worl&" Samsung re-orte& a net -rofit of @. G 1M

trillion won in @001 on total re(enues of 3@.F trillion won. 't was re-orte& that SamsungDs @001 global bran& cam-aign increase& consumer awareness about Samsung from M3.!6 in @000 to 1.@6 in @001" an& in the ES" bran& awareness an& -reference for Samsung increase& from GK.F6 to !F.16 for the same -erio&. Aow the bran& name Samsung known to all most all -eo-le in the worl&. )% A global bran&s offer significant a&(antages. .ne such a&(antage is economies of scale. Take < TOP > for exam-le" creating an a&(ertising cam-aign for Samsung. 't is far less costl% to create a single global a&(ertising cam-aign than creating in&i(i&ual cam-aigns for &ifferent countries. 't is far more con(enient to &e(elo- -rograms such as -ackaging" a website" a -romotion" or a s-onsorshi- for a single cam-aign. 9urther" &e(elo-ing these -rograms un&er a single cam-aign is cost effecti(e because ex-enses an& in(estments are s-rea& o(er multi-le countries. The economies of scale +hat result from a single cam-aign are critical when the s-onsorshi-s are at global le(el such as +lie .l%m-ics. A single cam-aign also results in enhance& effecti(eness as better resources are &e-lo%e& to -romote organi<ational goals. Samsung has so man% a& agencies to &o its a&(ertising work. Efficiencies also result &ue to cross-market ex-osure. Hlobal bran&s get more ex-osure &ue to me&ia co(erage. Also global bran&s are easier to manage than a set of &ifferent national bran&s that har&l% ha(e an% commonalit%. .ften the main challenge for an international bran& manager is to create clear" well-articulate& bran& i&entit%" an& then ensure that that it &ri(es all bran&buil&ing acti(ities. 't is less &ifficult to manage a global bran&. 9or exam-le. 3isaDs O0orl&wi&e acce-tanceO cam-aign -ro(e& to be easier to manage than &o<ens of countr%-s-ecific cam-aigns. The ke% to the creation of a global bran& is creating a -osition that works in all markets. >om-anies can also -osition their bran&s as the best in the categor%" or the u-scale choice. This wa% the% can cross the national boun&aries easil%.

!ection #: "pplie1 /2eor4

% 'n or&er" to achie(e its -ur-ose" the 'M9 -erforms three main o-erations Sur(eillance 9inancial Assistance < TOP >

Technical Assistance !ur;eillance in(ol(es the monitoring of economic an& financial &e(elo-ments" an& the -ro(ision of -olic% a&(ice" aime& es-eciall% at crisis -re(ention. 'n to&a%Ds global econom%" when" the economic an& financial -olicies of one countr% affect a lot of other countries" it becomes es-eciall% im-ortant to closel% monitor economic &e(elo-ments an& changes in the -olicies of countries worl&wi&e. The 'M9 kee-s a close watch on the exchange rates" monetar% an& fiscal -olicies of member countries. Sur(eillance also co(ers structural -olicies such as international tra&e labor market issues" -ower sector reforms" financial an& institutional issues such as central bank in&e-en&ence" financial sector reforms" cor-orate go(ernance" an& -olic% trans-arenc% an& accountabilit%. This is &one -articularl% in the wake of financial crises an& in the context of member countries un&ergoing transitions from -lanne& to market economies. )ase& on its sur(eillance" the 'M9 then assesses the risks an& (ulnerabilities to which the countr% ma% be ex-ose& &ue to its changing -olicies. .inancial "ssistance The 'M9 -ro(i&es loans to countries facing balance of -a%ments &ifficulties" to -ro(i&e tem-orar% financing in or&er to restore con&itions for sustainable economic growth. 'M9 loans are not aime& at s-ecific -ro4ectsN howe(er loans are -ro(i&e& for -o(ert% re&uction" for which certain con&itions are lai& out. .nce" a countr% meets the con&itions in or&er to get a loan" a Oletter of intentO is &rafte& an& -resente& before the Executi(e )oar& for a--ro(al. .n a--ro(al" the loans are release& in -hase& installments. The 'M9 has (arious loans or OfacilitiesO to suit its (arie& member nations. :ow income countries" aiming to remo(e -o(ert% ma% borrow at concessional interest rates through the *o(ert% =e&uction an& Hrowth 9acilit% +*=H9,. To correct a short term balance of -a%ment -roblem" a countr% ma% borrow from the Stan&- )% Arrangement +S)A,. Exten&e& 9un& 9acilit% +E99, is use& b% countries with a more -rotracte& balance-of-a%ments -roblem with roots in the structure of the econom% an& hence is long term. Su--lemental =eser(e 9acilit% +S=9, is (er% short-term financing -ro(i&e& on a large scale. ?uring the 1 0s" some emerging market economies face& a su&&en loss of 1

market confi&ence" lea&ing to outflow of ca-ital from the countries. The 'M9" with its S=9 facilit% ste--e& in to -ro(i&e finance to these countries on a large scale. The borrowing countries ha(e to return the loan in two to two an& a half %ears. >om-ensator% 9inancing 9acilit% +>99, is to assist countries ex-eriencing either a su&&en shortfall in ex-ort earnings or an increase in the cost of cereal im-orts cause& b% fluctuating worl& commo&it% -rices. Emergenc% assistance. The 'M9 -ro(i&es emergenc% assistance to countries that ha(e ex-erience& a natural &isaster or are emerging from conflict. Each member nation maintains a certain OquotaO of reser(es" in the form of gol& or its own currenc% with the 'M9. /ec2nical "ssistance: The 'M9 -ro(i&es countries with technical assistance an& training in its areas of ex-ertise such as 9iscal *olicies Monetar% an& Exchange Matters :egal 'ssues Statistical ?ata >ollection an& Anal%sis

Training The ob4ecti(e of 'M9 technical assistance" as &escribe& in its Articles of Agreement" Ois to contribute to the &e(elo-ment of the -ro&ucti(e resources of member countries b% enhancing the effecti(eness of economic -olic% an& financial -olic%$. The 'M9 -ro(i&es su--ort to member nations through staff missions of limite&1exten&e& &uration" training courses" seminars" worksho-s" an& Oon-lineO a&(ice an& su--ort from its hea&quarters in 0ashington" ?.>. Since &eman& for technical assistance from 'M9 is more than what can be fulfille&N 'M9 gi(es -riorit% in atten&ing to low income countries first" an& -ro(i&es them assistance in their main -olic% areas like crisis -re(ention" &ebt re&uction an& -o(ert% re&uction. 'n March @003" Sub-Saharan Africa was the biggest beneficiar% of 'M9 technical assistance. 'n a&&ition to the abo(e acti(ities" the 'M9 also buil&s u- a &atabase of economic &ata" research an& statisticsN the moti(e is to un&erstan& the effect of -olicies better in or&er to be able to -ro(i&e better assistance to member nations. 't also -ublishes a number of bulletins" -erio&icals an& sur(e% re-orts making its research an& sur(e%s a(ailable to all. *% +;aluating #2annel "lternati;es )efore selecting a s-ecific channel for &istribution of -ro&ucts or ser(ices in international markets" a firm e(aluates c2annel alternati(es on the basis of three criteria economic" control an& a&a-tation. +conomic criteria 0hile e(aluating channel alternati(es" the first question a firm nee&s to ask is. which channel member can -ro&uce more sales2 Although the com-an%Ds sales force might be better equi--e& an& traine& to sell the com-an%Ds -ro&ucts" it is -ossible that a s-eciali<e& sales agenc% might be able to sell more. The reason can be the customersD willingness to &eal with sales re-resentati(es &ealing in se(eral bran&s of the same -ro&uct rather than a s-eciali<e& sales re-resentati(e &ealing in a single bran&. )% gi(ing commissions to s-eciali<e& agencies" the com-an% can increase sales. The next question to be aske& is what are the relati(e costs in(ol(e& in selling &ifferent amounts through the two interme&iaries2 The fixe& costs incurre& in using a sales agenc% are lower than those for &e(elo-ing a com-an%Ds sales force. 5owe(er" these costs go u- as sales increase" owing to higher commissions -ai& out. 9rom the gra-h" it is e(i&ent that selling costs are the same for both channels at the le(el +Se,. Therefore" we can infer from the gra-h that for sales (olume that is below Se" it is better to use a sales agenc% an& for sales (olume abo(e Se it is belter to use the com-an%Ds sales force. 'n other wor&s" com-anies shoul& use an external sales force when the sales (olume is lower. #ontrol criteria Esuall%" firms are not self-sufficient. The% nee& to &e-en& on the ser(ices of external agencies. 5owe(er" the more the &e-en&ence" the less it can control strategic -lanning. Therefore" while selecting an interme&iar%" a com-an% has to strike a balance between the nee& to control im-ortant functions an& to get market share with external agenciesD hel@0 < TOP >

at a gi(en ex-en&iture le(el. Thus" control becomes a ma4or issue while e(aluating a channel alternati(e. "1apti;e criteria The last criterion in e(aluating channel alternati(es is the a&a-ti(e nature of the relationshi- between manufacturer an& &istributor. There shoul& be agree& commitment le(els from both si&es before business begins. 'f the channel member is committe&" then he or she will tr% to maintain the relationshi- with the manufacturer. >hannel members who o-erate in a turbulent atmos-here will tr% to structure the channel so that the% can a&a-t to changes b% altering channel strateg%.
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