W1-2-60-1-6

JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

UNIVERSITY EXAMINATIONS 2014/2015
SECOND YEAR FIRST SEMESTER EXAMINATION FOR THE DEGREE OF
MASTER OF BUSINESS ADMINSTRATION

HCBA 3213: GLOBAL STRATEGIC MANAGEMENT

DATE: DECEMBER, 2014 TIME: 3 HOURS

INSTRUCTIONS: Answer Questions ONE (Compulsory) and TWO other Questions.

Question One

Case study

After months of fiercely resisting any deal Cadbury agreed on Tuesday to an improved takeover
offer from Kraft foods, worth $ 19 b. For kraft the deal offer a chance to expand its foot print in
emerging markets and in higher growth sectors like oum and candy. “It transforms the portfolio,
accelerates long-term growth and delivers highly attractive returns,” Trene B. Rosenfield, Krafts
chairlady and chief executive said in a statement. Cadbury for its part will benefit from the
supply claim of a career company, said Jon Cox, a food and beverage analyst and Kepter capital
management in Zwich. But the prospect of a takeover of Cadbury, the 186 years old British
company, especially by an American multinational like kraft sent shudders throughout Britain
and prompted a wave of public protests. The mail on Sunday, one of the biggest Selling British
newspapers, ran a “keep Cadbury British”

Multinational, “Mr. Cox said, “but that is finance.” Prime minister Gordon Brown said his
government was “determined that the levels of investment that take place in Cadbury in the UK
are maintained” and that “at a time when people are worried about their jobs, that jobs in
Cadbury are secure.”

During a conference kraft reiterated that the company “would keep a strong presence in Britain
and would be a net importer” of jobs in the country. The move will also continue the business
over the last decade. While mergers involving food companies dippest somewhat last fear,
preliminary data from the food institute, a, trade organization showed 58 acquisitions in 2013
versus 130 in 2012, analyst expect deal maxing to pick up again as companies seek greater sealte
and presence in developing countries
a) Discuss disadvantages of foreign direct investment (FDI). [10 marks]

b) Discuss unforeseen global political events. [10 marks]

c)
i. What’s environmental scanning? [2 marks]
ii. Discuss benefits of global trade. [8 marks]

Question Two

Forces of globalization can be both reactive or proactive. Discuss. [15 marks]

Question Three

a) What limits an international expansion? [5 marks]

b) Explain clearly how world order has changed global trade. [10 marks]

Question Four

a) What are the factors that prompt international business concerns to invest in foreign
countries? Discuss giving suitable examples. [10 marks]

b) Explain clearly your understanding of the term a “a political risk” as used in global
strategic management. [5 marks]

Question Five

a) Explain any two global entry strategic modes. [10 marks]

b) Discuss application of absolute advantage theory by Adam Smith in Global trade.

[5 marks]