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International Business
April 2023 Examination
Q1. Globalization has not only brought people closer but also it has led to the integration of ideas, cultures and values.” In the light of this statement, explain the advantages and disadvantages of globalization. (10 Marks)
Ans 1.
Introduction
Globalization is a business method in which understanding, ideas, goods, and records spread globally. Furthermore, this term is meant to be used in an economical business context that drives the incorporated business market through free waft services, free trade values, and supporting the resources in business. The employees or labour market is the essential issue of business that helps maximize organizations’ benefits and return to drive the common good. Moreover, globalization is also using the convergence of economic and cultural systems to promote the necessary
Q2. “The major objectives of sourcing globally are to lower production costs and to maintain the required quality standards of products and services”. In the light of above statement explains the reasons, benefits, and challenges of Global sourcing.
Ans 2.
Introduction
Global outsourcing based on international marketing is intermediate to the suppliers and product demand that propagated the firm’s performance development in business. From the competitive analysis, it argued that international and lean focus on the buyer is beneficial, especially for providers and buyer demand. Furthermore, global sourcing is described as a common business phenomenon to analyze the extent of corporations’ calls. International sourcing is used to evaluate ok performance. The alternative approach and internal
Q3. Gillette Targets Emerging Markets
As it entered the twenty-first century, Gillette faced a difficult choice. Should it continue targeting emerging markets or not? Its strategy to move aggressively into markets in the developing world and the former Soviet bloc had been hailed as a success only a few years before. Recent poor earnings, however, had management considering whether this choice had been a wise one.
The Boston-based firm was founded in 1895 and is still best known for its original products, razors and razor blades. By the end of the twentieth century, Gillette had grown into a global corporation that marketed. Its products in 200 countries and employed 44,000 people worldwide. About 1.2 billion people use Gillette products every day. Its sales are about equally distributed among the United States (30 per cent), Western Europe (35 per cent), and the rest of the world (35 per cent).
As markets matured in developing countries, Gillette sought growth through product diversification, moving into lines such as home permanents, disposable lighters, ballpoint pens, and batteries. In the mid-1990s, Gillette targeted several key emerging markets for growth. Among them were Russia, China, India and Poland.
Russia was already a success story. Gillette had formed a Russian joint venture in St.Petersburg and within 3 years Russia had become Gillette’s third-largest blade market.
Gillette’s move into the Czech Republic had prospered as well and in 1995 Gillette bought Astra, a 10caI; privately-owned razor blade company.
Astra gave Gillette expanded brand presence in the Czech market. Astra’s relatively strong position in export markets in East Europe, Africa and Southeast Asia proved a boon to Gillette in those markets as well. Just as in other markets in the developing world, 70 per cent of East European blade .consumers used the older, lower-tech double-edge blade. In more developed markets, consumers appreciated product innovation, and the shaving market had moved to more high-tech systems such as Gillette’s Sensor.)
Then disaster struck. A financial crisis that began in Thailand quickly spread across Asia. Many wary investors responded by pulling money out of other emerging markets as well as depressing economies across the globe. Bad economies meant slower sales for Gillette, especially in Asia, Russia and Latin America. In Russia, wholesalers could not afford to buy Gillette products. Consequently, these products disappeared from retail stores and Gillette’s Russian sales plummeted 80 per cent in a single month.
Gillette found it could not meet its projected annual profit growth of 15-20 per cent. The price of Gillette shares tumbled 36 percent in 6 months. To save money, Gillette planned to close 14 factories and layoff 10 per cent of its workforce.
Despite its recent lousy experience in developing countries and the former Soviet bloc, Gillette was still moving ahead with plant expansion plans in Russia and Argentina that would total $64 million. Some even suggested that this was an excellent time to expand in the emerging markets by buying up smaller competitors that had been hurt even worse by the crises. Meanwhile, back in the developed world, another sizeable global consumer products firm, Unilever, announced that it would be entering the razor market.
a. Why do companies such as Gillette target emerging markets? Do you agree with this strategy? (5 Marks)
Ans 3a.
Introduction
The emerging marketplace in business refers to the experience of sizeable adjustments within the financial system and its growth. Moreover, the rising market is transitioning the section to expand better adjustments in business and mitigate the challenges. This section will discuss the Gillette markets and their goal. The talk at the strategy of this market can be discussed by
b. What are the dangers to Gillette of targeting emerging markets? (5 Marks)
Ans 3a.
Introduction
Emerging markets and financial systems are analyzed in business to affect the business outlook to highlight trade tensions and global policy. The rising marketplace of Gillette will face several troubles primarily based on market development. The aggressive danger for massive businesses consists
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