International Business Environment-1A


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Question 1: By giving the appropriate examples explain how Chinese, American and Turkish Markets are different from each other.
Question 2: Is international marketing research generally more complex task than Domestic marketing research? Discuss with reference to problems regarding collection, analysis and interpretation of data from foreign markets.
Question 3: Critically examine the Japanese style of management and distinguish it from Indian style of Management. Also explain how their importance in International Negotiations by giving relevant examples.
Question 4: What are the sources of commercial intelligence available to exporters in India? How far can a firm arrange for its own sources of commercial intelligence?
Question 5: How would you proceed to shortlist possible markets for your products? Explain in detail. Also explain the various methods through which you can export your products.
Question 6: Describe the impact of foreign trade on the economic development of a country. Illustrate your answer with examples from India.
Question 7a: What are the specific advantages that a firm can derive by going “international”?
Question 7b: Why is the task of the international marketer more difficult than that of the domestic marketer?
Question 8: What factors should Indian Exporters consider in assessing demand for a product in foreign markets? How are they different from assessing domestic demand?

Read the following Case Study of “Export Promotion” and answer the Questions given at the end. (Marks: 10)India’s tea exports rose to 46.74 million kg. during the first quarter of the current financial year from 35.47 million kg. in the previous comparable period. Export earnings from this item aggregated Rs. 81.61 crore during April – June, 1981 against Rs. 68.03 crore in the corresponding period last year. Thus, although in terms of quantity our tea exports have looked up this year, the unit value realization dropped from Rs. 19.8 per kg. to Rs. 17.46 per kg. The drop in unit value realization is attributed to the slackness in the international tea market due to the global over-supply in the commodity. Since 1975, world tea production has gone up by 41 percent whereas increase in consumption by the tea-improving countries has been only of the order of 9 percent. Naturally, the prospects of a revival in international tea prices are dim, atleast in the immediate future. The recommendations made by the recent national tea meet to ‘revitalise’ the tea industry in the country have to be viewed in this context. The national meet on tea, organized by the Union Commerce Ministry, was held in the first week of August to take a close look at the various problems confronting the tea industry. The meeting which was attended by the representatives of Central Government, tea producing States, Planters’ associations and small growers, has recommended a package of fiscal reliefs – both atthe Central and State levels. The package includes, among other things, a substantial reduction in excise duty on tea, refund of indirect taxes paid on tea exports, simplification of drawback procedures, substantial reduction or removal of the excise duty on packet tea until further review, suspension of sales tax on auction tens concessional credit and a significant cut in the agricultural income-tax and other local taxes by the respective State Governments. It was also recommended that the State Government should consider grant of exemption from rural employment cess to all export sales of tea and teas used for packeting by the producers themselves. According to the available information these recommendations are being considered by the Centre and States concerned for implementation. The basic problem that confronts the tea industry in the international sphere is one of depressed prices. More and more black tea is coming into the international markets from several new producing-exporting countries leading to over-supply and lower price realisation. And the tea producing nations are realizing that without demand and supply, the cannot get a better price for their produce. Viewed against this background, it is doubtful that the massive relief’s being sought on tea exports will really be helpful. Excise duty drawback on export, if granted, may compound the decline in unit values. This may temporarily improve our competitive position and increase the quantum of exports. But at the same time this may firm up domestic price to some extent and lead to further slackening of internal consumption, which has already been affected by the high prices of sugar and mild. Yet another factor needs consideration before attempting to step up the quantum of exports by making tea cheaper through concessions. This is the discouraging trend in production so far this year. During January – June 1981, estimated tea production at 173.7 million kg is down by as much as 27.4 million kg over the same period of last year. If this trend continues in the remaining months of the year, the resultant lower output itself may push up internal tea prices to some extent. Moreover, most of the tea growers, who do not export directly and who deserve government help the most, are unlikely to benefit from excise rebate or fiscal concessions to tea exports. Instead, these would benefit substantially the FERA companies who export their produce for sale in the London auctions and export under forward contract and private sale. The other likely beneficiaries would be exporters of blended tea and foreign buyer purchasing tea from public auctions in India. What is needed, therefore, is a selective and judicious approach towards the whole issue of fiscal incentives for tea exports. Because of lower production cost some of our competitors have an edge over us in export markets and incentives may be necessary to an extent for offsetting this price disadvantage. Similarly, assistance for exports of non-traditional items such as tea bags and packet teas would be advantageous for establishing markets for these high value-added items whose share in our overall tea exports is small at present.

Q1: Analyse the arguments for and against granting additional assistance to tea exports.
Q2: What in you opinion should be the ideal package of assistance for the tea industry against the given perspective?

Assignment – C

Q1: Which of the following can be renewed indefinitely?
a) Patent
b) Trademark
c) Copyright
d) all of the above

Q2: This kind of risk applies to a host government’s future acts that might restrict a subsidiary’s payment to the parent firm.
a) general instability risk
b) ownership/control risk
c) operation risk
d) transfer risk

Q3: ___________ was considered to be the main source of wealth by the mercantilists.
a) Diamonds
b) Gold
c) Money
d) People

Q4: This is not a characteristic of “centrally planned economies.”
a) a communist philosophy
b) an active government role in economic planning
c) bureaucratic political/economic systems
d) market-oriented economy

Q5: Trade theories assume that trade is:
a) unilateral
b) bilateral
c) multilateral
d) Can’t say

Q6: Which of the following events changed the economic relations and co-operation of nations worldwide
a) World War I
b) World War II
c) World War III
d) Gulf War

Q7: Which of these is not an organisation formed after the Bretton Woods Conference.
a) IMF
b) WTO
d) None of the above

Q8: Sweden has adopted this economic system.
a) capitalism
b) socialism
c) communism
d) modified communism

Q9: The currency of this organisation is SDRs.
a) IMF
b) WTO
d) None of the above

Q10: The following organisation provides conditional loans to countries with BoP difficulties.
a) IMF
b) WTO

Q11: An economic union requires:
a) uniform tariff rates among member countries
b) uniform tariffs against outsiders
c) removal of restrictions on movement of factors of production
d) harmonization of the national economic policies

Q12: When did India seek loan/ s from IMF?
a) 1966
b) 1991
c) Both a and b
d) 1972

Q13: Which institutions have been criticised because it is felt that they promote interests of developed countries?
a) IMF & WTO
b) IMF & World Bank
c) World Bank and WTO

a) IMF
b) World Bank
d) WTO

Q15: This is not a nontariff barrier.
a) documentation
b) quota
c) product inspection
d) countervailing duties

Q16: Globalisation is studied under several themes. Which of the following is not one of them?
a) Political
b) Economic
c) Cultural
d) Natural

Q17: Developed countries are
a) largest recipients and largest sources of FDI
b) largest recipients and moderate sources of FDI
c) moderate recipients and largest sources of FDI
d) moderate recipients and moderate sources of FDI

Q18: Which of these helps in measuring economic growth of a nation?
a) GDP growth rate
b) Population
c) Human Development Index
d) Lifestyle development index

Q19: Which of these have voting rights based on economic size of the nation?
a) IMF
d) WTO

Q20: The principle of relative advantage states that a country should produce a product with the ________ comparative advantage.
a) least
b) greatest
c) equal
d) somewhat higher

Q21: Which of the following does not represent BRIC nations?
a) Brussels
b) Russia
c) India
d) China

Q22: Which of these is an example of preferential trade area?

Q23: This type of intellectual property refers to know-how
a) patent
b) trademark
c) copyright
d) trade secret

Q24: Which of these is not a type of regional economic co-operation/ trade bloc?
c) EU

Q25: According to the principle of absolute advantage, a country should import a commodity that can be only produced at a _________ cost than can other nations.
a) Higher
b) lower
c) same
d) cost is irrelevant

Q26: How many countries are members of NAFTA?
a) 2
b) 3
c) 5
d) 8

Q27: Balance of payments is
a) Difference between value of imports and exports
b) Difference between volume of imports and exports of services
c) Difference between volume of imports and exports
d) Difference between value of imports and exports of services

Q28: IMF engages in deficit financing when ________ of a country is negative.
a) Government Debt
b) Revenue
c) Balance of payments
d) Balance of trade

Q29: The main aim of this economic system is social welfare and equality of all.
a) Capitalism
b) Socialism
c) Democracy
d) Totalitarian

Q30: This kind of quota is the most restrictive.
a) absolute quota
b) tariff quota
c) voluntary quota
d) VER

Q31: Which of the agreements monitors and regulates trade in services?
Q32: Which country is considered to offer highest risk to intellectul property?
a) US
b) EU
c) India
d) China

Q33: Which index is considered to be an informal substitute of PPP?
a) Big Mac
b) Big Apple
c) Big Nano
d) Big Donald

Q34: Which of these is true about dumping?
a) Anti-dumping duties may apply
b) It is not legal
c) It offers economic benefit to organisation engaged in dumping
d) All of the above

Q35: Many members of the European Union members have adopted a single currency (i.e, the euro) in order to form this kind of economic cooperation.
a) free trade area
b) customs union
c) common market
d) economic union

Q36: This type of economic system is followed by Japan?
a) Capitalism
b) Socialism
c) Market socialist
d) Market capitalist

Q37: Which of these is not a hard currency?
a) Euro
b) Yen
c) US $
d) Yuan

Q38: ___________ is the difference between total imports and exports of goods
a) Balance of trade
b) Balance of payments
c) Balance of revenue
d) Balance of volume trade

Q39: ____________ is the agreement which monitors implementation of intellectual property rights in WTO member nations

Q40: This type of trade barriers is easiest to deal with.
a) Tariffs
b) nontariff barriers
c) private barriers
d) international barriers


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