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AMITY UNIVERSITY (Distance Learning Program) INTERNATIONAL BUSINESS ENVIRONMENT (ADL- !

) ASSI"NMENT - A #i$e Ana%&tica% '(estions Tota% Mar)s* +, Q.1 What factors should Indian Exporters consider in assessing demand for a product in foreign markets? How are they different from assessing domestic demand? here are se!eral ways to gauge the o!erseas mar)et -otentia% of products and ser!ices.

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#actors one s.o(%/ )no0* A1 2(stomer3s -(rc.asing 4e.a$ior "onsider the following things while assessing the purchasing #eha!ior of the customers you target$ What is the demand of the type of products %you are dealing in& in the market? Who and why will the customers #uy your products? How many competitors would you face in the target market? How would you get the customers #uy your products? How can you sell and promote your products in the target market? What should #e the price of your products? B1 Mar)et iss(es "ultural difference often turns to a #e ma'or hurdle while dealing with customers in a foreign land. (roducts which are regarded as #asic commodity in your country may not #e !iewed in the same way in another country. )r* promotional acti!ities you use in the domestic market may hurt cultural taste if used in an o!erseas market. "onsider these issues carefully #efore taking any decision in your export #usiness. Are you a#le to speak the language of your potential customers? It helps to esta#lish mutual confidence. If you cannot speak the local language* you may need the help of professional translators and marketing agencies. 21 Legis%ation In an o!erseas market* you are certainly going to face plethora of legal issues which are different from that of you country. +ou ha!e to a#ide #y the rules and regulations of the country and ad'ust you products and operations so that they comply with the local laws. "onsider the following legal issues #efore starting you export #usiness in a foreign land$ Export legislation of that country. "ertifications you re,uire to do #usiness in that country. -ocal standards you ha!e to maintain. (atent and trademark issues. esting re,uirements and product lia#ility.

Ana%&5ing t.e Target 2o(ntr& an/ 2(stomers A1 Ana%&5ing t.e co(ntr& "onsider the following factors while researching the target country in export #usiness$ . What is the si/e of the market you are going to explore? . What is the political situation in the target country? Is it sta#le? . What is the economic condition of the target country? B1 Ana%&5ing target c(stomers . Who would #e your customers? 0egment them according to their si/e* location* region* age* gender* life style* etc. . What are the factors which influences their purchasing decisions? Ask yourself three #asic ,uestions$ who your customers are* what they #uy* and why they #uy. . How much your customers are ready to pay for your products? 1etermine your pricing according to it. Researc.ing o$erseas sector an/ -otentia% com-etition A1 Deman/ If the type of product you are dealing in is not in demand in the target market* it is !ery risky to start your export #usiness in that country. ry to find out what is the reason #ehind that lack of demand. +ou may need to tailor your product or ser!ices to make them demanding in the target market. )r you may find that the market is already o!ersupplied. B1 2om-etition Analy/ing the competition you are going to face in the target market is also !ery important to a!oid potential risk in export #usiness. "onsider the following factors while researching your competitors$

Who are the competitors? What are the strengths and weaknesses of your competitors? How the competitors promote and market their products? How your competitors price their products? What type of customer care ser!ices the competitors pro!ide to their customers? Why customers #uy from those competitors?

21 Pricing While assessing the potentiality of an o!erseas market* carefully consider economic climate of that country* whether the customers are willing to pay or not and how much they are willing to pay. 1etermine the price of your products only after considering all these issues. D1 Mar)et entr&* "hoose carefully the way you want sell and distri#ute your products. here are two main ways$ direct export and indirect export. he first way in!ol!es selling directly to a foreign firm. In this case* you ha!e to find out #uyers #y yourself and arrange e!erything related to shipping your products o!erseas. 2ut direct exporting is no the only way to do

export #usiness. If you cannot manage all the re,uirements for direct exporting* try the ways for indirect export #usiness through export a trading companies or distri#utors. Di66erent 6rom assessing /omestic /eman/* )ne of the most important ways is to assess the product3s success in domestic markets. If a company succeeds at selling in a domestic market* there is a good chance that it will also #e successful in markets a#road* where!er similar needs and conditions exist. In markets that differ significantly from the domestic market* some products may ha!e limited potential. hose differences may #e climate and en!ironmental factors* social and cultural factors* local a!aila#ility of raw materials or product alternati!es* lower wage costs* lower purchasing power* the a!aila#ility of 6oreign e7c.ange %hard currencies like the dollar* the 2ritish pound* and the 4apanese yen&* go!ernment import controls* and many other factors. Q.5 a. Ans a What are the specific ad!antages that a firm can deri!e #y going 6international7? Increased 0ales and (rofits. 0elling goods and ser!ices to a market the company ne!er had #efore #oost sales and increases re!enues. Additional foreign sales o!er the long term* once export de!elopment costs ha!e #een co!ered* increase o!erall profita#ility. Enhance 1omestic "ompetiti!eness. 8ost companies #ecome competiti!e in the domestic market #efore they !enture in the international arena. 2eing competiti!e in the domestic market helps companies to ac,uire some strategies that can help them in the international arena. 9ain 9lo#al 8arket 0hares. 2y going international companies will participate in the glo#al market and gain a piece of their share from the huge international marketplace. 1i!ersification. 0elling to multiple markets allows companies to di!ersify their #usiness and spread their risk. "ompanies will not #e tied to the changes of the #usiness cycle of domestic market or of one specific country. -ower (er :nit "osts. "apturing an additional foreign market will usually expand production to meet foreign demand. Increased production can often lower per unit costs and lead to greater use of existing capacities. "ompensate for 0easonal 1emands. "ompanies whose products or ser!ices are only used at certain seasons domestically may #e a#le to sell their products or ser!ices in foreign markets during different seasons. "reate (otential for "ompany Expansion. "ompanies who !enture into the exporting #usiness usually ha!e to ha!e a presence or representation in the foreign market. his might re,uire additional personnel and thus lead to expansion. 0ell Excess (roduction "apacity. "ompanies who ha!e excess production for any reason can pro#a#ly sell their products in a foreign market and not #e forced to gi!e deep discounts or e!en dispose of their excess production.

9ain ;ew <nowledge and Experience. 9oing international can yield !alua#le ideas and information a#out new technologies* new marketing techni,ues and foreign competitors. he gains can help a company3s domestic as well as foreign #usinesses. Expand -ife "ycle of (roduct. 8any products go through !arious cycles namely introduction* growth* maturity and declining stage that is the end of their usefulness in a specific market. )nce the product reaches the final stage* maturity in a gi!en market* the same product can #e introduced in a different market where the product was ne!er marketed #efore. #. Why is the task of the international marketer more difficult that of the domestic marketer? Ans #. International 8arketing presents a more complex task than domestic marketing #ecause of the uncontrolla#le international marketing en!ironment and their heterogeneity. Hence* though the #asic marketing decisions to #e made are similar in international and domestic marketing* making international marketing decision is generally more challenging. In international marketing* a company has to make* #roadly fi!e strategic decisions. 1. International marketing decision= he first decision a company has to make* is whether to take up international marketing or not. his decision is #ased on a serious consideration of a num#er of important factors* such as the present and future o!erseas opportunities* present and future domestic market opportunities* the resources of the company in terms of skills* experience* production and marketing capa#ilities and finance* company o#'ecti!es etc. 5. 8arket 0election 1ecision= )nce it has #een decided to do international marketing* the next important step is the selection of the most appropriate market. >or this purpose* a thorough study of potentials of the !arious o!erseas markets and their respecti!e marketing en!ironment is essential. "ompany resources and o#'ecti!es may not permit a company to do #usiness in all the o!erseas markets. >urther* some markets are not potentially good* and it may #e suicidal to waste company resources in such markets. A proper selection of the o!erseas markets therefore is !ery important. ?. Entry and )perating 1ecisions= )nce the market selection decision has #een made* the next important task is to determine the appropriate mode of entering the foreign market such as export* contract manufacturing* direct manufacturing plant etc. on the #asis of this decision* proper arrangements must #e made to continue the acti!ities of marketing. @. 8arketing 8ix 1ecision= As in the domestic marketing* the success highly depends upon the applica#ility of proper 8arketing 8ix* in International marketing alsoA 8arketing 8ix plays a ma'or role. he elements of marketing mix B product* promotion* price and physical distri#ution should #e suita#ly designed so that they may #e adapted to the characteristics of the o!erseas market. Q.? A.? 1escri#e the impact of foreign trade on the economic de!elopment of a country. Illustrate your answer with examples from India. >oreign trade is the reflection of economic relationships among the indi!idual economies and represents the part of the country foreign relationships* which include trade exchange of a part of the production. In the simplifies #alance understanding* it is usually presupposed that the o#'ect of this exchange is such a part of the production* which exceeds the home consumers demand and thus is the o#'ect of export* or* !ice !ersa* that part of the home demand which is not

satisfied #y the home production and thus has to #e co!ered #y import. In reality* the whole process is* howe!er* su#stantially more complicated* as the whole series of reasons %price* trade* political etc.& lead often to exporting e!en those products which might ha!e #een realised in the home market* regarding the purchasa#le demand* and on the other hand* import includes in most commodity groups also the products competing with the home production and thus securing a wider assortment of supply. >oreign trade is historically the oldest and still important part of the external economic relationships. heir impact on the economic de!elopment of the indi!idual countries has deepened considera#ly namely during the whole period after the WW5* in the last decades the international trade de!elopment #elongs among the most dynamic elements of the world economy de!elopment. At that* it represents not only the dynamic de!elopment on the ,uantitati!e le!el* #ut also* from the !iewpoint of the structural changes of the indi!idual countries* also the complex international trade flows. In harmony with the conclusions of the classical* neo$classical as well as modern foreign trade theories* it can #e stated that at present foreign trade #elongs to the decisi!e factors influencing economic growth of #oth the indi!idual countries as well as the world economy. )#'ecti!es of the >oreign rade (olicy of India $ rade propels economic growth and national de!elopment. he primary purpose is not the mere earning of foreign exchange* #ut the stimulation of greater economic acti!ity. he >oreign rade (olicy of India is #ased on two ma'or o#'ecti!es* they are B 1. o dou#le the percentage share of glo#al merchandise trade within the next fi!e years. 5. o act as an effecti!e instrument of economic growth #y gi!ing a thrust to employment generation. o #ecome a ma'or player in world trade* a comprehensi!e approach needs to #e taken through the >oreign rade (olicy of India. Increment of exports is of utmost importance* India will ha!e to facilitate imports which are re,uired for the growth Indian economy. Cationality and consistency among trade and other economic policies is important for maximi/ing the contri#ution of such policies to de!elopment. hus* while incorporating the new >oreign rade (olicy of India* the past policies should also #e integrated to allow de!elopmental scope of India3s foreign trade. his is the main mantra of the >oreign rade (olicy of India. Q.@ How would you proceed to shortlist possi#le markets for your products? Explain in detail. Also explain the !arious methods through which you can export your products. 8arket is comprised of three distinct #uyer types=

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Potentia% 2(stomers (eople who ha!e pro#lems your product could sol!e* #ut are not shopping for solutions. E$a%(ators (eople who know they ha!e a pro#lem and are acti!ely shopping* may ha!e asked you for a proposal* #ut ha!e not #ought anything from you. 2(stomers (eople who ha!e pro#lems your distincti!e competence sol!es* ha!e shopped and engaged with you #y purchasing your solution. As you can see* focusing on the total market* #eginning with potential customers* represents the greatest opportunity. And* youDll recei!e some of the #est unresol!ed pro#lems from this group %with some additional information from the E!aluators group&. Why not current customers? +our existing customers do play a role in finding unresol!ed pro#lems* #ut they ha!e already defined you for what they percei!e you can and cannot pro!ide and therefore will filter their comments and concerns in relation to this experience. >ew steps to undertake= 1. 5. ?. @. F. G. Inter!iew your market with an open mind

reat #uyers like market experts Cemem#er* you are asking and listening ;) 0E--I;9E 8eet #uyers on their own turf %whene!er possi#le& 1on3t talk a#out your company * products or ser!ices* 'ust listen Aling team mem#er and performance o#'ecti!es to understanding unresol!ed market pro#lems H. :se open ended ,uestions

:nderstand 2uyer (ersonas uned in organi/ations understand the #est way to de!elop and launch products or ser!ices that resonate is to identify the unresol!ed pro#lems of a particular group of peopleA a #uyer persona. A persona is a short #iography of the typical customerA not 'ust a 'o# description #ut a person description. It typically notes the #uyer3s #ackground* daily acti!ities* and how they deal with their current set of pro#lems. he more experience you ha!e in your market* the more o#!ious the personas #ecome. 2y grouping #uyers into distinct groups* #y understanding the pro#lems these groups ha!e and how you can sol!e them* and then documenting e!erything you know a#out each #uyer persona* your hard work to create 'ust the right message #ecomes much easier. 8ethods through which you can export your products=

"o%/en R(%e* In order to #e successful in exporting one must fully research its markets. ;o one should e!er try to tackle e!ery market at once. 8any enthusiastic persons #itten #y the export #ug* fail #ecause they #ite off more than they can chew. )!erseas design and product re,uirements must #e carefully considered. Always sell as close to the market as possi#le. he fewer intermediaries one has the #etter* #ecause e!ery intermediary needs some percentage for his share in his #usiness* which means less profit for the exporter and higher prices for the customer. All goods for export must #e efficiently produced. hey must #e produced with due regard to the needs of export markets. It is no use trying to sell windows which open outwards in a country where* traditionally* windows open inwards. Se%% E7-erience* If a person cannot easily export his goods* may #e he can sell his experience. Alternati!ely* he can concentrate on supplying goods and materials to exportersD who already ha!e esta#lished an export trade. He can concentrate on making what are termed Down #randD products* much demanded #y #uyers in o!erseas markets which ha!e the manufacturing know$how or facilities. Se%%ing in E7-ort* In todayDs competiti!e world* e!eryone has to #e sold. he customer always has a choice of suppliers. 0elling is an honora#le profession* and you ha!e to #e an expert salesman. On-Time De%i$eries* -ate deli!eries are not always an exporters fault. 1ock strikes* go$ slows* etc. occur almost e!erywhere in the world. If one enters into export for the first time* he must ensure of fast and efficient deli!ery of the promised consignment. 2omm(nication* "ommunication internal and external must #e comprehensi!e and immediate. 9ood communication is !ital in export. When you are in dou#t* pick up the phone or email for immediate clarification. Testing Pro/(ct* he risk of failure in export markets can #e minimi/ed #y intelligent use of research. 2efore committing to a large$scale operation o!erseas* try out on a small scale. :se the a sample test* and any mistakes can then #e corrected without much harm ha!ing #een done. While the test campaign may appear to cost more initially* remem#er that some of the cost will #e repaid #y sales* so that test marketing often turns out to #e cheaper. A--roac.* If possi#le some indication of the attitudes towards the product should #e esta#lished* like any sales operation. E!en if the product is successful* to o#tain reactions from the customer. Q.F What are the sources of commercial intelligence a!aila#le to exporters in India? How far can a firm arrange for its own sources of commercial intelligence?

A.F he 1irectorate 9eneral of "ommercial Intelligence I 0tatistics %19"II0& is the nodal agency of the 9o!ernment of India responsi#le for collection* compilation and dissemination of rade 0tatistics and !arious types of "ommercial Information. )!er the years* 19"II0 has #een making utmost effort to release the rade 1ata in time and to create relia#le and detailed data$#ase to facilitate the formulation* implementation and modification of IndiaDs rade (olicy and (lanning in the field of Export (romotion and efficient Import 8anagement. 19"II0 made a significant progress in releasing the pro!isional >oreign rade 1ata of aggregate Exports and Imports and also ma'or "ommodityJ"ountry and (ortwise data. (resently* the (ress Celease and Quick Estimates of (rincipal "ommodities for Exports and Imports are prepared within 5F days from the close of the reference month. hese are !ery useful for making o!erall assessment of IndiaDs >oreign rade in ad!ance #y the 9o!ernment and to study the

impact of !arious trade policies. A 2rochure titled as K>oreign rade 0tatistics of India %(rincipal "ommodities I "ountries&K containing pro!isional data is released thereafter. he detailed statistics at L$digit le!el of I "%H0& are #eing pu#lished with much reduced time$lag than in the past with the continuous efforts to make it more timely. As part of its regular acti!ities* 19"II0 collects* preser!es* analyses and disseminates !arious types of commercial information re,uired #y importers* exporters* traders as well as o!erseas #uyers. 1irectory of Indian Exporters pu#lished #y 19"II0 is a !alua#le document for the foreign #uyers. he Indian rade 4ournal* a weekly pu#lication #rought #y 19"II0* is a repository of material of commercial interest as well as a ma'or channel for flow of information on tenders at the ;ational and International le!el. 19"II0 also helps in the settlement of "ommercial 1isputes and maintains a "ommercial -i#rary* which ser!es a !ast clientele. he 1irectorate #rings out a num#er of other pu#lications mainly on Inland and "oastal rade 0tatistics* Ce!enue 0tatistics* 0hipping and Air$cargo 0tatistics etc.* which are utili/ed #y the go!ernment departments as well as #y the trading communities and researchers DATA 2APTURE he 1aily rade Ceturns %1 Cs&* which form the source document for generation of >oreign rade 1ata* are recei!ed from ma'or customs houses through 0"(" M0A and F15 k#ps leased line in Electronic 1ata Interface%E1I& I ;on E1I form. he data from minor ports are recei!ed through EmailJ>loppies. A monitoring$cum$feed #ack system has #een in operation in order to impro!e the ,uality and co!erage of such data recei!ed from custom houses. he data relating to ma'or customs houses recei!ed through M0A J-eased line together with those recei!ed through EmailJfloppies co!er a#out LN to LFO of IndiaDs total >oreign trade. he rest of the data are recei!ed in the form of 8anual 1 Cs* which come from places such as -and "ustoms 0tations* Inland "ontainer 1epot % I"1s&* Export (rocessing Pone%E(P& and medium I minor sea and airport custom units he "ommercial Intelligence 2ranches are e,uipped with the whole gamut of trade information* ranging from foreign exportersD and importersD addresses to the scope of trade in !arious commodities* from information relating to IndiaDs trade relations with its ma'or partners to current international trade en!ironment. he information is gleaned from sources as !aried as inputs recei!ed from Indian em#assies and High commissions and materials culled from we#sites of ;ational and International )rgani/ations. hus armed* the 2ranches assist and encourage the entrepreneurs in their trade endea!ors. It is #eyond de#ate that the main hurdle faced #y Indian exporters is in the field of marketing. 8any manufacturer$exporters producing ,uality goods fail to make profits #ecause they do not ha!e necessary information regarding o!erseas #uyers. It is here that the "ommercial Intelligence 2ranches of 19"II0 step in and #ridge the information gap #y pro!iding names and addresses of foreign importers to the Indian exporters who lack the wherewithal to o!erseas market intelligence on their own. he up$to$date data on o!erseas importers are* at present* #eing stored in 80 Access data#ases. he data#ases are constantly updated #y sending special ,ueries in respect of selected items and countries as per the re,uirements of Indian exporters. "ountry$wise and commodity$wise trade information* indicating existing and potential markets for different items in countries of the world o!er is pro!ided to the #est of the 2ranchesD a#ility. his helps the potential Indian exporters to identify their target o!erseas markets and also to choose the most suita#le exporta#le items. he "ommercial Intelligence 2ranches do not only confine themsel!es to answering written ,ueries #ut desk information is also pro!ided regularly to !isitors on !arious aspects related to trade Intelligence. his sa!es time and the informal interaction helps

in #uilding exportersD and importersD confidence. 8oreo!er* "ountry (rofiles are #eing prepared* which deals in general information of the countries* present economic indicators in #rief and analyse their trade performance with specific reference to trade with India. he country (rofiles are #eing pu#lished in the newly launched 'ournal called QMAA;I4+AD. hese (rofiles offer the reader a clear idea of the economic conditions of the countries re!iewed* the trends shown #y their recent trade data* with an accent on IndiaDs trade with the countries. he discerning readers will #e a#le to make reasona#le con'ectures on future trade performance of these countries. )wn sources of commercial intelligence= he officer of a firm can stimulate within the firm the use of many techni,ues* like old data and information from others officer of the firm and firm itself can usefully explore the companyDs attitude to its own products. >irms fre,uently use the data of other company3s and the officer will then will #e #est a#le to suggest and arrange for the most appropriate use of the information. ASSI"NMENT - A T.ree Ana%&tica% '(estions Tota% Mar)s* +, Q.1 "ritically examine the 4apanese style of management and distinguish it from Indian style of 8anagement. Also explain how their importance in International ;egotiations #y gi!ing rele!ant examples.

A.1 8anagement #eing a culturally determined discipline exhi#its fla!ours peculiar to the genius of the people* inspite of its uni!ersal scientific structure. hus we ha!e American 8anagement* European 8anagement* 4apanese 8anagement etc. he o!erall concern of management is creating !alue for stakeholders money and time. And of them customer is the king. his re,uires technology and design inno!ations on an ongoing #asis. Worker moti!ation also is important. here has to #e an in!estment$ capital friendly entrepreneurial en!ironment. India* as it is poised on the high road to economic #oom* has to learn to integrate the modern management !alues and practices with its age old integral world!iews and human o#'ecti!es. En!ironment* family* spirituality* ethics and social 'ustice are important sur!i!al !alues that humanity pursues and management science cannot and shoud not ignore those !alues in its wealth creating acti!ities. Indian 8anagement is in the crossroads. It can remain rooted in its present orthodox paternalistic mode* #reeding corruption and inefficiency* and perpetuating po!erty or take #old steps to open the economy to market competition* indi!idual enterprise and to the challenges of glo#al standards. ;o dou#t it will #e a painful process. 9rowing up is always a painful experience. his does not mean that go!ernment has to go passi!e and remain a moot o#ser!er. he state must play critical role in ensuring infrastrucure #uilding* social 'ustice* law and order* indi!idual freedom and a#o!e all reaching e!ery citi/en with food* health care and education. What is re,uired is a partnership #etween go!ernment and pri!ate initiati!e. 0ixty percent of Indians are a#'ectly poor* li!ing #elow the po!erty line* whose daily income will #e less than fifty rupees. Another thirty percent may #e called the middle class* with a percapita monthly income of FNNN$HNNN rupees. he rest ten percent of Indians are super rich. 9o!ermentDs focus should #e on the #ottom sixty percent poor. 9o!ernment must

ensure that the disposa#le income of the middle class grows and that the rich finds it profita#e to in!est in India. his re,uires #road tripartisan class consensus in IndiaDs political culture and economic thinking. Indi!idual thinkers* think tanks* media and grass root workers ha!e to 'oin hands to create such a dialoguing and focussed society. his is what is meant #y the phrase Dtowards an Indian management styleD 1uring a discussion in 1RGR #etween 0hishido oshio* then chairman of ;ikko Cesearch "enter* and 8imura +ohei* former president of 8itsu#ishi "orporation* when 8imura was asked whether a 4apanese$style general trading company was possi#le in the :nited 0tates* he said= K2ecause management in the :nited 0tates tends too much toward the short term*K it would not #e possi#le.FR (lanning in 4apanese companies often re,uires a long time from conception to implementation* so that a company of this kind may not conform to the interests of shareholders who expect high di!idends ,uickly. 0hishido remarked* considering the essential nature of capitalism* that Kthe capitalist selects the manager* and unless he increases profits ,uickly* he will #e fired. In 4apan* howe!er* capitalism has no capitalists. ;o#ody imagines the president of 8itsu#ishi "orporation has #een selected #y its shareholders. 8any companies speak of their social responsi#ilities* #ut not of the responsi#ilities to their shareholders. (ersonally* I donDt think this is a good thingA on the other hand* one could say precisely #ecause this is the way it is in 4apan* 4apanese companies ha!e achie!ed prosperity and increases in producti!ityK %0hishido 1RHN= 1R@$RF&. Another insight into the 4apanese style of management is pro!ided #y an incident in!ol!ing an employee of a commercial firm who* suspected of graft* committed suicide and left a note saying the company was Kimmortal.K A company president indifferent to shareholders and a sacrifice of oneDs life for the #enefit and prestige of oneDs employer seem especially indicati!e of a particular 4apanese management culture. In 4apan* the num#er of shares held #y indi!idual stockholders is extremely small* and for each listed company* an a!erage of 1N institutional shareholders* mainly #anking institutions* hold the o!erwhelming ma'ority of its stocks. It is common for companies to hold each otherDs stocks. >or this reason* 4apanese capitalism is often referred to as Ktrust capitalismK or Kno$capitalistK management capitalism. In 4apanese culture* a person may not speak ill of the dead* and so if a !erification of the facts re!eals a dishonor* its disclosure would #e em#arrassing. (erhaps the person committed suicide simply #ecause he was tired of li!ing. If so* suicide is an allurement toward which anyone li!ing in a highly industriali/ed society may tend to #e tempted* and it is a disease inherent in modern ci!ili/ation. 4apanese management is characteri/ed #y lifetime employment* a seniority wage system* !ague 'o# classifications %which means an unspecified range of responsi#ilities and power& and groupism. It is generally true that workers select their employers* not their occupations. And this corresponds well with the practice of regular recruitment of new graduates and the training of new employees in the particular #usiness practices within each enterprise. 2ecause the system and indi!idual 'o#s in one enterprise are incompati#le with those of others* there is a tendency created in employees to settle in one company* which 'ustifies the immense educational in!estment made #y the enterprises.

Q.5 A.5

Is international marketing research generally more complex task than 1omestic marketing research? 1iscuss with reference to pro#lems regarding collection* analysis and interpretation of data from foreign markets. here are !arious differences #etween domestic marketing and international marketing. 1ue to a language #arrier it is more difficult to o#tain and interpret research data in international marketing. (romotional messages needs to consider numerous cultural differences #etween different countries. his includes the differences in languages* expressions* ha#its* gestures* ideologies and more. International marketing research plays an important role in the identification and de!elopment of a company3s strategies for internationali/ation. It ena#les a #usiness to identify* e!aluate and compare potential foreign market opportunities and de!elop a marketing plan. Cesearch also pro!ides a company with foreign market intelligence to help it anticipate e!ents* take appropriate action* and prepare for glo#al changes. )nce you ha!e identified countries that warrant detailed in!estigation* you now need to use resources that gi!e you a more detailed assessment of the industry market potential. At this stage* these resources should gi!e you an indication of the demand and supply patterns* ena#le e!aluation of regulations and standards* and identify the #est market potential for specific products. >ree and fee$#ased ser!ices will come in handy at this stage. We# sites #elonging to foreign trade associations* em#assies and trade missions will get you started on foreign regulations and re,uirements* most often for free. 1oing international research is more difficult than doing purely domestic research. (artly #ecause of this* little empirical research has #een done in se!eral areas of International 2usiness and 8anagement and !arious myths ha!e #een created.

he first is the myth of high expatriate failure rates* created #y massi!e %8is& ,uotations of how referencing errors undermine our academic credi#ility. he I4HC8 article has generated considera#le interest and some GN I0I citations* while the 5NN5 4)2 article is now included in many (h1 courses and is starting to gather citations. A final article in this series %with "laus "hristensen& suggests a#andoning the concept of expatriate failure. Another myth is the presumed homogeneity of Europe. 8any researchers uncritically generali/e findings from domestic research as applying worldwide or generalise a#out Europe from research in a single European country. Cesearch in International HC8 I 0taffing (olicies and HQ$0u#sidiary Celationships in 8;"s showed that large differences exist #etween European countries in the area of staffing policies* control mechanisms* international strategy and performance and e!en response rates to sur!eys. In the area of entry mode studies the <ogut I 0ingh %1RLL& index of cultural distance has reached an almost mythical status. A !ery detailed and critical re!iew of research in this area %pu#lished in Ad!ances in International 8anagement& shows that there is little or no e!idence for the proposed relationship #etween cultural distance and entry mode choice. Cesearch in this field seems to #e characterised #y a reductionist approach to culture and an almost complete disregard for #oth sample idiosyncrasies and research conducted in related areas.

Q.? A.?

2y gi!ing the appropriate examples explain how "hinese* American and urkish 8arkets are different from each other. :0 firms working in "hina are more concerned a#out regulatory and policy issues than a#out pushing "hina to re!alue its currency* the head of the American "ham#er of "ommerce said in 2ei'ing on 8onday. American #usinesses are encountering new o#stacles to market access as "hina3s growing economy leads them to expand deeper into inland pro!inces* Am"ham (resident "hristian 8urck told reporters. Washington has #een pressing "hina to allow its currency to appreciate and trade more flexi#ly* with politicians and la#or groups #laming the under!alued yuan for the large :0 trade deficit with "hina and the loss of :0 manufacturing 'o#s. 6A single$minded focus on the yuan is a mistake*7 8urck said* citing access for financial ser!ices* progress toward a market economy and domestic industrial policies as important concerns for :0 #usiness operating in "hina. (olicy makers in 2ei'ing worry that allowing too much of an appreciation in the yuan will make "hinese exports uncompetiti!e* hurting a sector that dri!es growth and 'o#s in "hina. Half of mem#er companies sur!eyed #y Am"ham said a "hinese economic slowdown ranked as one of the top three risks in upcoming years* while ?N percent cited rising la#or costs in "hina* Am"ham said in its annual white paper. 0ome 1F percent !iewed yuan appreciation as a risk. >oreign in!estors ha!e pre!iously experienced steadily widening opportunity and market access in "hina* especially as "hina 'oined the World rade )rgani/ation and opened new sectors to in!estment and competition. hat trend is now #umping up against inconsistent applications of regulations* concerns o!er registering and protecting intellectual property and indigenous inno!ation rules. 6;ow* when we look from the !antage point of 5NNR and 5N1N* and look toward the future* we feel less certainty that trend will continue*7 8urck said. "hina3s measures to sta!e off the glo#al economic crisis #y channeling stimulus funding through state #anks to state$#acked sectors has contri#uted to foreign firms3 perceptions of increased o#stacles. 6 hat represents a slowing in the process of mo!ing forward to a market economy*7 he said. Econom& o6 T(r)e& is largely de!eloped. he country is among the worldDs leading producers of agricultural productsA textilesA motor !ehicles* ships and other transportation e,uipmentA construction materialsA consumer electronics and home appliances. In recent years* urkey had a rapidly growing pri!ate sector* yet the state still plays a ma'or role in industry* #anking* transport* and communications. -ike many economies* urkey has #een affected #y the financial crisis of 5NNHB5N1N. urkey has the worldDs 1Fth largest 91($((( and 1Hth largest ;ominal 91(.SGT he country is a founding mem#er of the )E"1 %1RG1& and the 9$5N ma'or economies %1RRR&. 0ince 1ecem#er ?1* 1RRF* urkey is also a part of the E: "ustoms :nion.

he "IA classifies urkey as a de!eloped country. urkey is often classified as a newly industriali/ed country #y economists and political scientistsA while 8errill -ynch* the World 2ank and he Economist maga/ine descri#e urkey as an emerging market economy. Econom& o6 t.e Peo-%e3s Re-(4%ic o6 2.ina is the third largest in the world* after the :nited 0tates and 4apan with a nominal 91( of :0U@.R1 trillion when measured in exchange$rate terms. It is the second largest in the world after that of the :.0. with a 91( of UL.HH trillion when measured on a purchasing power parity %(((& #asis. "hina is the fastest$growing ma'or economy in the world* and has had the fastest growing ma'or economy for the past ?N years with an a!erage annual 91( growth rate of o!er 1NO. he countryDs per capita income is at U?*GHH %nominal* RHth&* and UG*FGH %(((* RLth& in 5NNR* according to the I8>. "hina is the second largest trading nation in the world and the largest exporter and second largest importer of goods. he econom& o6 t.e Unite/ States is the 0or%/3s %argest nomina% econom&. Its nominal 91( was estimated at U1@.5 trillion in 5NNR* which is a#out three times that of the worldDs second largest national economy* 4apan. Its 91( #y ((( is almost twice that of the second largest* "hina. he :.0. economy maintains a !ery high le!el of output per person %91( per capita* U@G*@@5 in 5NNR* ranked at around num#er ten in the world&. Historically* the :.0. economy has maintained a sta#le o!erall 91( growth rate* a low unemployment rate* and high le!els of research and capital in!estment funded #y #oth national and* #ecause of decreasing sa!ing rates* increasingly #y foreign in!estors. In 5NNG* consumer spending made up HN percent of the :nited 0tates 9ross 1omestic (roduct.S15T 0ince the 1RGNDs* the :nited 0tates economy a#sor#ed sa!ings from the rest of the world. he phenomenon is su#'ect to discussion among economists. -ike other de!eloped countries* the :nited 0tates faces retiring #a#y #oomers who ha!e already #egun withdrawing from their 0ocial 0ecurity accountsA howe!er* the American population is young and growing when compared to Europe or 4apan. he :nited 0tates pu#lic de#t is in excess of U15 trillion and continues to grow at a rate of a#out U?.L? #illion each day

2ASE STUDY 2ARRE#OUR he hypermarket concept is usually defined as an outlet retailing #oth food and non$ food products from a sales area of at least 5*FNN s,. 8eters with extensi!e car parking. It was 8aicel >ournier and -ouis 1effrorey who opened the first European hypermarket 'ust outside (aris. It was an instant success and largely as a result "arrefour has grown into one of the largest grocery retailers in Europe with sales exceeding from 11H #illion in 1RR5. he #asic strategy of "arrefour* which has remained largely unaltered o!er the past ?N years* was summed up in the Annual Ceport= 6"arrefour* a single o#'ecti!eA offer ,uality products and ser!ices to consumers at lowest prices and con!enience of choice in large well stocked* well managed stores.7 here are three elements to this o#'ecti!e. 1. 5. ?. 1iscounting "arrefour has #een nominated as the leading discounter* not only in >rance* #ut also in 2ra/il. 8ulti speciali/ation. "arrefour is a specialist in e!ery product line whether it is in #utchery* #akery or delicatessen. Empowerment of staff. It is at the store le!el at which decisions are made.

;ot only has the hypermarket concept$changed little o!er the past ?N years* the #asic approach has #een adapted !ery little for the international market. Each hypermarket operates as a profit centre with the 0tore 8anger responsi#le for performance. Internationa% E7-ansion Almost from the outset "arrefour adopted a strategy which took account of internationali/ation. After the first hypermarket was opened in >rance* the group !entured into 2elgium in a 'oint !enture* followed #y a similar arrangement with another company in 0wit/erland. As far as the :< was concerned* "arrefour took a minority shareholding in the hypermarket holdings with Wheat sheaf distri#ution which itself #ecame part of the 1ee "orporation. "arrefour went on to expand with 'oint !enture operations in Italy* 0pain* 2ra/il* Austria and 9ermany. >ollowing this strategy of market spreading* the group rationali/ed its o!erseas operations to focus on a limited num#er of markets. he num#er of 'oint !entures operation to focus on a limited num#er of markets. he num#ers of 'oint !entures ha!e #een discontinued. Attempts were made to #uild up the Italian su#sidiary #ut with little success and di!estment followed in the early LNs. 8ore recently* two stores in 0wit/erland were sold. While di!estment was occurring in some areas* in other "arrefour in!ested hea!ily. 0pain* 2ra/il* Argentina* the :0A and aiwan saw hea!y in!estment. 0tores continued to #e opened !ia a num#er of separate operating su#sidiaries* #ut since the mid 1RLNs a policy of organi/ational consolidation ensures. In -atin* America* in!estment has continued despite the difficulties of operating in markets experiencing hyper Inflation in 2ra/il* annual inflation rates soared to le!els of 5NNO in the mid 1RLNs and 1HNNO in 1RLR* while in Argentina a figure of F*NNNO is recorded in the annual report for 1RLR and LNNO in 1RRN. 0uch figures ha!e rendered a marketing strategy #ased in low prices almost impossi#le to promote as prices are !irtually o#solete from the moment they are set. he hypermarket has #een an inno!ation in these markets* reinforced #y the de!elopment of focused shopping centre to support the stores. In south America much of the de!elopment is self$financing.

he American experiment was a different story. he "arrefour store opened in >e#ruary 1RLL in (hiladelphia #ut failed to li!e up to expectations. "arrefour responded to this #y increasing the range of food which did result in some impro!ement in performance #ut many still felt that the hypermarket was not suited to the American market. In early 1RR? the American operation was to #e discontinued. "arrefour3s expansion into aiwan has met with the much greater degree of success. 2y 1RR? there were fi!e stores trading successfully* although certain adaptations ha!e #een made to the retail format to include an outdoor market and only 5NN parking spaces. "arrefour intends to continue its expansion plans into 8alaysia. "arrefour was at the forefront of inno!ation with the de!elopment of hypermarkets. In the last three decades they ha!e attempted to maintain this leadership in retail inno!ation. hey ha!e done this #y the introduction of retailer #rands* the launching of financial ser!ices and in!estment in inno!ati!e retail concepts. his inno!ati!e approach has #een demonstrated #y in!ol!ement in 1I+ stores* shareholdings in "ostco* the large American clu# stores* and in!ol!ement in restaurants and free/er centers. 8ost of the de!elopment has taken place under the same families of original founders* 8arcel >ournier and -ouis 1efforey. 0ince 1RL@ howe!er 8ichael 2ond has occupied a post of either 1eputy or "hief Executi!es whilst in 1RRN he #ecame "hairman of the group* the first non$family mem#er to hold this post. 2ond was replaced under dramatic circumstances #y 1anniel 2ernard to sort out a short term #alance sheet pro#lem. he group announced that it would sell non$essential in!estments* an unusual approach for a company which has in the past #een noted for showing patience and taking a long term !iew of in!estments. '1 "onsider "arrefour3s competiti!e strategy in relation to alternati!es* some of which may #e adopted #y ri!al companies. While their strategy would appear to ha!e #een successful for thirty years* is it likely to continue to #e for the next ?N years? "arrefour3s competiti!e strategy of the introduction of retailer #rands* the launching of financial ser!ices and in!estment in inno!ati!e retail concepts. his inno!ati!e approach has #een demonstrated #y in!ol!ement in 1I+ stores* shareholdings in "ostco* the large American clu# stores* and in!ol!ement in restaurants and free/er centers. hese strategies may #e adopted #y the ri!al companies and they can also use the same. herefore "arrefour has to think #eyond all these and has to take new approach to the #usiness. 0trategy which they are using from last thirty years is not necessary will #e successful in the next thirty years. "hange is the main factor in any #usiness growth. If company will not adapt new changes and will go with tradition then there will #e a certain fall out in #usiness. hey ha!e to make changes in the management and has to rope in new and young talent with new ideas. It will help them to think in new direction and will help into grow the #usiness.

Ans.

ASSI"NMENT 8 2 Rea/ t.e 6o%%o0ing 2ase St(/& o6 9E7-ort Promotion: an/ ans0er t.e '(estions gi$en at t.e en/1 India3s tea exports rose to @G.H@ million kg during the first ,uarter of the current financial year from ?F.@H million kg in the pre!ious compara#le period. Export earnings from this item aggregated Cs. L1.G1 crore during April B 4une* 1RL1 against Cs. GL.N? crore in the corresponding period last year. hus* although in terms of ,uantity our tea exports ha!e looked up this year* the unit !alue reali/ation dropped from Cs. 1R.L per kg. to Cs. 1H.@G per kg. he drop in unit !alue reali/ation is attri#uted to the slackness in the international tea market due to the glo#al o!er$supply in the commodity. 0ince 1RHF* world tea production has gone up #y @1 percent whereas increase in consumption #y the tea$ impro!ing countries has #een only of the order of R percent. ;aturally* the prospects of a re!i!al in international tea prices are dim* at least in the immediate future. he recommendations made #y the recent national tea meet to Vre!italise3 the tea industry in the country ha!e to #e !iewed in this context. he national meet on tea* organi/ed #y the :nion "ommerce 8inistry* was held in the first week of August to take a close look at the !arious pro#lems confronting the tea industry. he meeting which was attended #y the representati!es of "entral 9o!ernment* tea producing 0tates* (lanters3 associations and small growers* has recommended a package of fiscal relief3s$$$#oth at the "entral and 0tate le!els. he package includes* among other things* a su#stantial reduction in excise duty on tea* refund of indirect taxes paid on tea exports* simplification of draw#ack procedures* su#stantial reduction or remo!al of the excise duty on packet tea until further re!iew* suspension of sales tax on auction tens concessional scredit and a significant cut in the agricultural income$tax and other local taxes #y the respecti!e 0tate 9o!ernments. It was also recommended that the 0tate 9o!ernment should consider grant of exemption from rural employment cess to all export sales of tea and teas used for packeting #y the producers themsel!es. According to the a!aila#le information these recommendations are #eing considered #y the "entre and 0tates concerned for implementation. he #asic pro#lem that confronts the tea industry in the international sphere is one of depressed prices. 8ore and more #lack tea is coming into the international markets from se!eral new producing$exporting countries leading to o!er$supply and lower price reali/ation. And the tea producing nations are reali/ing that without demand and supply* the cannot get a #etter price for their produce. Miewed against this #ackground* it is dou#tful that the massi!e relief3s #eing sought on tea exports will really #e helpful. Excise duty draw#ack on export* if granted* may compound the decline in unit !alues. his may temporarily impro!e our competiti!e position and increase the ,uantum of exports. 2ut at the same time this may firm up domestic price to some extent and lead to further slackening of internal consumption* which has already #een affected #y the high prices of sugar and mild. +et another factor needs consideration #efore attempting to step up the ,uantum of exports #y making tea cheaper through concessions. his is the discouraging trend in production so far this year. 1uring 4anuary B 4une 1RL1* estimated tea production at 1H?.H million kg is down #y as much as 5H.@ million kg o!er 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. 8oreo!er* most of the tea growers* who do not export directly and who deser!e go!ernment help the most* are unlikely to #enefit from excise re#ate or fiscal concessions to tea exports. Instead* these would #enefit su#stantially the >ECA companies who export their produce for sale in the -ondon auctions and export under forward contract and pri!ate sale. he other likely #eneficiaries would #e exporters of #lended tea and foreign #uyer purchasing tea from pu#lic auctions in India. What is needed* therefore* is a selecti!e and 'udicious approach towards the whole issue of fiscal incenti!es for tea exports. 2ecause of lower production cost some of our competitors ha!e an edge o!er us in export markets and incenti!es may #e necessary to an extent for offsetting this price disad!antage. 0imilarly* assistance for exports of non$traditional items such as tea #ags and packet teas would #e ad!antageous for esta#lishing markets for these high !alue$added items whose share in our o!erall tea exports is small at present. '1+ Analyse the arguments for and against granting additional assistance to tea exports. A.1 he argument is a#out the relief to tea exporter. It is dou#tful that the massi!e relief3s #eing sought on tea exports will really #e helpful. Excise duty draw#ack on export* if granted* may compound the decline in unit !alues. his may temporarily impro!e our competiti!e position and increase the ,uantum of exports. 2ut at the same time this may firm up domestic price to some extent and lead to further slackening of internal consumption* which has already #een affected #y the high prices of sugar and mild. I am against the additional assistance to tea exports #ecause India3s tea exports rose to @G.H@ million kg during the first ,uarter of the current financial year from ?F.@H million kg in the pre!ious compara#le period. Export earnings from this item aggregated Cs. L1.G1 crore during April B 4une* 1RL1 against Cs. GL.N? crore in the corresponding period last year. hus* although in terms of ,uantity our tea exports ha!e looked up this year* the unit !alue reali/ation dropped from Cs. 1R.L per kg. to Cs. 1H.@G per kg. hat why I think that there is no need for an assistance package to tea exports.

'1; A.5

What in you opinion should #e the ideal package of assistance for the tea industry against the gi!e perspecti!e? In my opinion there should not #e reduction in excise duty on teaA refund of indirect taxes paid on tea exports #ecause they are earning rapidly e!ery year and earning well therefore they should pay all the taxes and excise duty. 9o!ernment can help in other sector like promoting and supporting #ut lea!ing the taxes will not #e good mo!e. herefore I will suggest to not to remo!e taxes.