Canadian International Matriculation Programme Sunway College International Business Fundamentals (BBB4M) FINAL EXAMINATION Date: 23 November 2011 (Wednesday) Time: 2.30 4.30pm Length: 2 hours Prepared by: Mr David Leonard, Ms Jaime Dale & Ms Sumathy Ramasamy (Please circle your teacher s name) Student Name: Period: Please read the following instructions carefully before you begin the examination: 1. This exam paper has 15 printed pages (including the cover page). 2. The examination is worth 30 percent of your final mark. 3. The examination consists of three parts. SECTION CONTENT MARKS A Multiple Choice Questions 30 (Knowledge & Understanding) B Short Answer 15 (Knowledge & Understanding, Thinking & Inquiry, Communication & Application) C Case Study 15 (Knowledge & Understanding, Thinking & Inquiry, Communication) TOTAL 60 4. Part A is to be answered on the MCQ answer sheet provided. Part B and C are to be answered in the exam booklet. 5. Only book dictionaries are allowed. 6. Answers must be written in standard English format for an academic audience.
SECTION A: MULTIPLE CHOICE QUESTIONS (Knowledge/Understanding) (30 marks) International Business Fundamentals November 2011 Page 2
SECTION B: SHORT ANSWERS (Knowledge/Understanding/Communication & Application) (15 marks) Choose and answer any three (3) questions. Each question is worth 5 marks. Your answers should be in complete sentences and in paragraph form. All answers must be written in the space provided. 1. Name an international product and describe the 4Ps as they relate to that product. Your answer should include relevant examples. 2. Describe how a country s economic system influences international business. Provide relevant examples. 3. Several factors determine the need for cultural awareness in international business relationships. Name and explain any TWO of the four aspects that businesses must consider when determining their need for cultural awareness. Include relevant examples. 4. Discuss any THREE factors that influence a country's ability to participate in international business. 5. State the objective of the International Organization for Standardization. How might this impact a Canadian company that wants to do business in Malaysia? Use at least two examples to support your answer. 6. What is Corporate Social Responsibility (CSR)? Your answer should include a detailed explanation and a relevant example. 7. What is the largest free-trade area in the world? a. Name and label (on the map), the countries that are part of this trade agreement b. Summarize the purpose of the agreement. International Business Fundamentals November 2011 Page 3
SECTION C: CASE STUDY (Knowledge and Understanding, Thinking/Inquiry - 10 marks) (Communication 5 marks) (15 marks) Louis Vuitton Louis Vuitton and Channel will this week be competing for the limelight as both open stores in Hong Kong. Louis Vuitton and Channel are luxury fashion houses, selling very expensive luxury goods to the very rich. Louis Vuitton is re-opening a store that it has changed and expanded. The outlet will be its second-largest worldwide, after its famous Champs Elysees store in Paris. Louis Vuitton s event will close on Friday night with a party of 2,500 guests held in a golden tent. Asia is a fast growing market for the luxury fashion market. With a population of 1 billion, and a growth rate which is seeing incomes double every seven years on average. It only needs the smallest fraction of this population to want to shop at a luxury fashion house for it to be a highly profitable market. The luxury fashion houses are moving from having outlets in first tier cities like Beijing and Shanghai, to second tier cities, large provincial cities which still have a rich group. Growth, however, brings its own challenges. Simply taking what works in Paris and London to an Asian city is not necessarily going to be successful. The brand needs to adapt to local culture whilst at the same time maintaining its unique image. Thibault Villet, President of Coach, the US maker of handbags and other accessories, for example says: We are clearly a New York brand and so need to communicate an image in accordance with our DNA. But the right way for us to go local is when we do events, where we certainly want to be working with the local celebrities. Another challenge for Asia s fashion development is a shortage of skills. Customers expect sales staff to be knowledgeable, friendly and yet respectful. Inexperienced sales staff can drive customers away. There are likely to be fewer repeat customers and fewer introductions by word of mouth. A key question is whether image-conscious fashion houses will join the outsourcing trend by shifting production to Asia. Last year, Louis Vuitton made its first manufacturing move outside of Europe by establishing a shoe production venture in Pondicherry, India. About 100 people are employed in its workshop there but the company has no plans to go further. After all, part of the brand image of a luxury Paris or Milan fashion house is that its goods are made by highly skilled workers in France or Italy. No one will pay hundreds of pounds for a handbag if they think it has been made in a sweatshop in Thailand. So the fashion house have to be ultra-careful about what functions they outsource to low cost locations. Source: Adapted from The Financial Times. International Business Fundamentals November 2011 Page 4
Answer all the questions in paragraph form. Elaborate your answers and provide evidence/examples when possible. a) Explain the term outsourcing. (2 marks) b) Describe the advantages to Louis Vuitton of outsourcing production to a country like India. (4 marks) c) Based on the statement The brand needs to adapt to local culture whilst at the same time maintaining its unique image (paragraph 3), describe the globalization strategy adopted by Louis Vuitton. (4 marks) International Business Fundamentals November 2011 Page 5
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