Seat No.: Enrolment No.

GUJARAT TECHNOLOGICAL UNIVERSITY

MBA – SEMESTER 3 – EXAMINATION – WINTER 2015

Subject Code: 2830006 Date: 02/12/2015

Subject Name: International Business
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
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Q.1 Answer the following multiple choice questions.
(a) 1. ……………is application of knowledge which redefine the
boundaries of global business
A. Cultural Values B. Society
C. Technology D. Economy
Capitalistic, communistic and Mixed are the types of

2. A. Economic System B. Social System

C. Political System D Cultural
System
Which is not an Indian Multinational Company?
3. A. Unilever B. Asian Paints
C. Piramal D. Wipro
…..is only a legal agreement and it is not an institution, but…….is a permanent
institution.
4.
A. GATT, WTO B. WTO, GATT
C. WTO, IMF D. IMF, GATT
is the first step in the internationalization process.
A. License B. Foreign
5.
Investment
C. Sales D. Export
MNC Stands for
A. Multi National Cooperation B. Multi National
6. Corporation
C. Multi National Company D. Multi National
Collaboration
Q.1 (b) Briefly explain the following terms 04
1. Ethnocentrism
2. Transnational Corporation
3. Counter Trade
4. Globalization

Q.1 (c) Differentiate between GATT and WTO? 04

Q.2 (a) Discuss the significance and drivers of international business. 07

(b) What is Regional Economic Integration explain with its all possible levels? 07
OR

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 (b) What is NAFTA? What are its objectives and Major Contributions? 07

Q.3 (a) Explain International business environment in the terms of Cultural and 07
Demographic Environment.
(b) What are the factors affecting Government Influence on Trade and 07
Investment? Explain with suitable examples.

OR
Q.3 (a) “All nations have their own constitutions”. Discuss the statement in the 07
light of Political and Legal Business Environment.

(b) What are the factors affecting Exchange rates. Explain with suitable 07
Examples.

Q.4 (a) What is Exporting and how it can be done in International Market? 07

(b) What is Multinational Corporations? Why do developing countries allow 07

MNCs to operate in their countries?

OR
Q.4 (a) Why is organizational structure important? What form of organizational 07
structure is best suited to a custom made product produced in a stable
environment and a mass product produced in an unstable?

(b) What factors influence the decision regarding location of production facilities? 07
What complexities and trade-offs might be involved?

Q.5 Case Study: Hilfiger Strategies 14

The early success of the Hilfiger brand was largely due to two men, the
U.S. designer Tommy Hilfiger and the Indian textile magnate Mohan
Murjani. Sales success came quickly for the Hilfiger brand, but Murjani
International faced financial problems. Mohan Murjani had many other
brand names to manage and found it difficult to separate them. Tommy
Hilfiger made some changes: moved their headquarters to Hong Kong went
public on the New York Stock Exchange in 1982in 2006, the Apax Partner
Fund in London, that took the company private again and moved the
headquarters from Hong Kong to the Netherlands. The expansion into
Europe has been due largely to expansion problems in the United States,
where clothing sales in general have growing at less than five percent per
year, much slower than in some foreign markets.
Promotion and Branding:
• Hilfiger’s promotion and branding have been so intertwined that it is
almost impossible to separate them. At the beginning, Murjani saw
two primary needs:
convince stores to stock a new brand
convince customers to want them
Product and Price:
• From the start, Hilfiger clothes have been casual and of good quality.
Hilfiger line is very distinctive
• Hilfiger has encountered some negative reactions abroad to its image
of being a U.S. brand
• Europeans tend to see France and Italy as the centers of up-scale
fashions. Hilfiger has adjusted to European preferences by increasing

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 production costs
Distribution:
• Hilfiger operates in three primary areas sectors:
wholesale
retail
licensing
• Hilfiger’s retail sector is carried out in two types of situations:
Hilfiger uses licensing to expand its line
Hilfiger’s licenses for production and sales in markets it
cannot yet enter independently, such as Japan, the
Middle East and South America
The Future:
• Future growth for Hilfiger depends both of expansion
internationally and re-vamping slow growth in the United States
Questions:
1. What factors have led to higher prices in Europe than in the United
States for Hilfiger merchandise? What problems might Hilfiger
encounter by having higher prices in Europe than in the United
States?
2. What strategies would you recommend for clothing companies
outside France and Italy to overcome the positive images of “made in
France” and “made in Italy?” What might Hilfiger do?

OR
Q.5 Case Study: International Airline 14
Most of the world’s major airlines are in or have announced they will join
an alliance whereby they combine routes, sales, airline terminal services,
and frequent-flier programs. Many airlines hold ownership in other
airlines.
Regulatory Factors:
Governments can further protect their airlines by regulating the
following:
Which foreign carriers have landing rights
Which airports and aircraft the carriers can use
Frequency of flights
Whether foreign carriers can fly beyond the country
Over flight privileges Fares they can charge
Factors influence governments’ protection of their airlines:
Countries believe they can save money by maintaining small air
forces and relying on domestic airlines in times of unusual air
transport needs
In the past, airlines were heavily subsidized to carry mail
overseas, now it’s not so, because mail subsidies no longer are
very important internationally
Public opinion favors spending “at home,” especially for
government-paid travel
Airlines are a source of national pride, and aircraft symbolize a
country’s sovereignty and technical competence
Countries have worried about protecting their airspace for
security reasons
Cost factors:
• Certain airlines dominate certain international airports and they
share costs, such as baggage handlers and baggage handling
equipment, with other airlines to spread costs
• Airlines sometimes make market agreements to fly on alternate
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 days when traffic on a route is low
• The high cost of maintenance and reservations systems has led to
joint ventures between airlines
Competitive Factors:
A number of airlines have established marketing agreements to
complement their route structures. A problem with these marketing
agreements is that the connections from one airline to another show up
as separate route codes in reservations systems
Management of Alliance:
A problem in the proliferation of alliances is that relationships are
intertwined among so many airlines, it’s difficult to determine whether
companies are competing, cooperating, or colluding.
Questions:
1. Discuss a question raised by the manager of route strategy of
American Airlines: Why should an airline not be able to establish
service anywhere in the world simply by demonstrating that it can and
will comply with the local labor and business laws of the host
country?
2. What will be the consequences if a few large airlines or networks
come to dominate global air service?

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