Table of Contents
International Business Old Question Paper Year 2015 | Tribhuvan University | Program BBA
Group “A”
Brief answer questions: [10*1=10]
- Name any three characteristics of international business.
- State three reasons for a global company to analyze political environment of the host country
- Write any four reasons why organizations go international.
- List four major objectives of foreign direct investment.
- Name the different institutions of World Bank Group
- Differentiate between strategic alliance and joint venture alliance and joint venture mode of entry of international business.
- Mention any three roles of IMF at present.
- Define political risk.
- Write any three challenges that WTO may create to a developing count like Nepal.
- Mention the four major factors determining the choice of global market.
Group “B”
Short Answer Questions: [6x 5=30]
- Describe the opportunities and challenges of international business for firm which wants to go for multinational business operations.
- What are ‘the behavioural practices affecting international business? Describe the strategies to deal with cultural differences.
- Describe the Product Life Cycle (PLC) theory of international trade.
- How does the foreign exchange rate is determined under PPP theory? To what extent is this theory realistic?
- Define the concepts world economic integration and regional economic What are the reasons for regional economic integration?
- What are trade barriers? Enumerate major types of non-tariff barriers.
Group “C”
Comprehensive Answer Questions: [4×5=20]
- Read the following case carefully and answer the questions given below.
The Subway, an American fast-food Chain, was planning an expansion and market entry/ penetration strategy. The subway’s sandwich chain overtook McDonald’s Burgers unit in 2003 to become the biggest fast-food firm in America. Today, Subway is the largest fast-food chain in the world. In 2010, Subway had 33,749 restaurants worldwide, compared McDonald’s 32,737. Today, it has 42,777 restaurants in 180 countries and territories as of October 2, 2014. Thus, it is the largest single-brand restaurant chain and the largest restaurant operator globally.
Subway (Stylized as SUBWAY) is an American fast food restaurant franchise that primarily sells submarine sandwiches (Subs) an Subway is one for the fastest growing franchises in the world.
Fred Deluca had opened the first Subway outlet in Bridge port Connecticut, USA on August 28, 1965, when the was only 17 year old. He had used as 1,000 1load form Peter Buck, a family Friend. His that owns and operates the subway is Doctor’s Associates.
Inc In the founding days of 1965/66, the business was an immediate success and he set a target of 32 new branches in the first 10 years but only managed to established 16, Then, he turned to the ‘franchising mode’ because it had worked for other fast food giants 1ike McDonald and KFC. The first Subway outside of North America was opened in Bahrain in December 1994. In 2004, Subway began opening stores in Walmart store in 2007. In 2004, there were 14,383 Subway outlets in the US and 21,000 worldwide. On average, 2,500 now franchises (franchised outlets) open each year.
The subway knows the race for global dominance is an important one an industry that is mostly saturated in the US. High unemployment and economic uncertainty have battery (affect) the restaurant industry in the US, And such fast-food chains are increasing looking overseas for growth, Particularly in Asia.
From 2004/2005, Subway expanded itself into Europe with hundreds of new stores planned. Annual sales doubled in four years to reach $9 billion. Under the Subway’s franchising agreement, franchisees pay Subway an initial $ 10,000 as membership fee and typically invest $ 200,000 of their own capital in a subway store. Subway receives 8 percent of an outlets turnover, and franchisees also pay another 3.5 percent of the turnover into a regional marketing fund of the Subway.
Deluca is aware that it will not be easy to grow in the European market faster, as he has seen failures and closures of many other stores there in the past. However, the recent changes in popular taste of European consumers have convinced that it is the time fast-food sellers “re-invent itself as healthy food In Europe, the Subway made its marketing programmes more aggressive and started opening new outlets in the busiest areas only; often close to McDonald’s, and in some cases, remaining open 24 hours a day.
Subway’s menu varies between countries, most significantly where there are religious requirements relating to the meats served. It customizes its products to local country tastes and preferences.
At a time when its fast food competitors McDonald’s and KFC have already entered the Nepalese market, subway may also soon look into prospect of operating its franchised outlets in Nepal in the near future.
Questions:
- Identify and explain the advantages and disadvantages for the Subway of using franchising as its main method of global market entry and
- Analyze the Subway’s marketing and business strategies expansion with examples from the case.
- If Subway offered your newly established company to operate as a Subway franchisees in Nepal. What potential benefits would you see in taking the franchising agreement with subway? Explain any four benefits.
- Could the Subway’s business be successful in Nepalese market? Why or why not?