Practice Exam 1
Choose four (4) of the following questions and answer them in short essay format. All questions are worth equal marks. (12.5 marks each)
QUESTION 1 (12.5 marks)
Discuss the key factors in the international environment that managers of emerging global organisations look to as threats to their international operations. Provide examples as appropriate.
International Environment is the management of business operations conducted in more than one country and usually outside of the organisations normal environment (out of the country).
Legal-Political Environment: Political systems the organisation may be unfamiliar with; dealing with the government. - Political stability - Quotas, tariffs and taxes - Law and regulation
Economic Environment: Economic conditions in which the organisation operates in - Consumer Market - Exchange rates - Economic development (Developing country? Depression?)
Sociocultural Environment: Common behaviour and way of thinking among the consumers. - Religion - Time orientation - Beliefs and values(Hofstede) - Language
QUESTION 2 (12.5 marks)
What are Porter’s competitive forces in an organisation’s environment? Explain them and provide examples to illustrate your answer.
Threat of new entrants: - Capital requirements and economic of scale are potential barriers - Easier to enter mail order business than automobile due to high capital cost - Technology made it easier for new entrants to enter market. -
Threat of existing rivalry: - Coke VS Pepsi, Toyota VS Honda - Influenced by the other four forces and cost-product differentiation
Threat of substitute products: - Affected by cost changes or trends - Internet open new ways to meet customer needs - Low cost airline tickets VS travel agencies
Bargaining power of buyers: - Few buyer, many suppliers. Goods are standardised. (High buyer power) - Buyer gets
QUESTION 1 (12.5 marks)
Discuss the key factors in the international environment that managers of emerging global organisations look to as threats to their international operations. Provide examples as appropriate.
International Environment is the management of business operations conducted in more than one country and usually outside of the organisations normal environment (out of the country).
Legal-Political Environment: Political systems the organisation may be unfamiliar with; dealing with the government. - Political stability - Quotas, tariffs and taxes - Law and regulation
Economic Environment: Economic conditions in which the organisation operates in - Consumer Market - Exchange rates - Economic development (Developing country? Depression?)
Sociocultural Environment: Common behaviour and way of thinking among the consumers. - Religion - Time orientation - Beliefs and values(Hofstede) - Language
QUESTION 2 (12.5 marks)
What are Porter’s competitive forces in an organisation’s environment? Explain them and provide examples to illustrate your answer.
Threat of new entrants: - Capital requirements and economic of scale are potential barriers - Easier to enter mail order business than automobile due to high capital cost - Technology made it easier for new entrants to enter market. -
Threat of existing rivalry: - Coke VS Pepsi, Toyota VS Honda - Influenced by the other four forces and cost-product differentiation
Threat of substitute products: - Affected by cost changes or trends - Internet open new ways to meet customer needs - Low cost airline tickets VS travel agencies
Bargaining power of buyers: - Few buyer, many suppliers. Goods are standardised. (High buyer power) - Buyer gets