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Stmg 543: Global Strategic Management Question Paper
Stmg 543: Global Strategic Management
Course:Master Of Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2012
KENYA METHODIST UNIVERSITY
SCHOOL OF BUSINESS & ECONOMICS
END OF SEMESTER EXAMINATION FOR MASTER IN BUSINESS ADMINISTRATION DECEMBER, 2012 (EVENING)
UNIT CODE : STMG 543
UNIT TITLE : GLOBAL STRATEGIC MANAGEMENT
TIME: 3 HOURS
Instructions: Answer Question ONE and any other THREE Questions.
Question One
CASE STUDY
FORD MOTOR COMPANY IN INDIA: DEVELOPING THE FORD FIGO
According to the society of Indian Automobile Manufacturers (SIAM), passenger cars were classified on the basis of length into mini (5,000 mm). Earlier cars were classified on the basis of price into segments A (<Rs.300,000), B (Rs.200,000-500,000), C (Rs. 500,000 – Rs. 1 million- Rs. 2.5 million) and E (>Rs. 2.5 million). Multi Utility Vehicles (MUVs) were classified on the basis of seating capacity-seven, nine, and 13 –seaters. As of 2010, passenger vehicle sales contributed to 16% of the total automobile sales in India.
The small cars segment of the passenger vehicle market in india
Passenger vehicle sales had shown an increasing trend in the 2000s. India was the seventh largest producer of passenger cars in the world, as of December 2010 with sales of 1.95 million units. Maruti Suzuki, Hyudai Motor India Ltd, and Tata Motors Ltd. (Tata Motors were the dominant players with a combined share of more than two – thirds of the total sales of passenger cars.
In India small care accounted for more than 70% of the total cars sold in the country and the country was the largest manufacturer of small cars in the world. Small cars- mini and compact- accounted for the sales of around 900,000 cars in India in 2009. With annual sales of forecast to grow to 3.0 million units by 2016, global automakers started moving to introduce small cars in the country.
Being the largest segment, the small-car segment witnessed the highest new car launches i.e 11 new launches between the three years 2007 and 2010 (of which five wre launched in 2010) with major ones being the Ritz, the A-Star and the Zen Estilo (from Maruti Suzuki), the I10 and the i20 (from Hyundai), the Indica Vista (from Tata Motors), the Polo (from VW), the Etios (from Toyota), the Ford Figo, and the Chevrolet Beat….
Ford in India
Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, USA, manufactured or distributed automobiles across six continents. With about 201,000 employees and about 90 plants worldwide, the company’s automotive brands included Ford, Lincoln, mercury and Volvo. The company provided financial services through Ford Motor Credit Company. Established in 1995, Ford India was a wholly owned subsidiary of Ford Motor Company with more than 2,300 employees. Ford started its operations in India in 1995 as a 50/50 joint venture with Mahindra & Mahindra (M & M).
New Product Development process for Figo
Generally, the process of new product development involved a series of stages: the generation of new ideas, screening of ideas to identify the one with the most potential success, development of the idea into a concept that could be tested on a small group of potential customers in order to design a marketing strategy around it, development of the product, test marketing and finally launch it into the market. Ford India followed a unique product development process while developing Ford Figo……
Taking it to the Market
By the second half of 2009, the Ford Figo was ready for its launch. In September 2009, Ford revealed its Figo model in New Delhi. Alan Mulally claimed that Figo would be a game-changer for Ford India. He said, "The Figo should help us make considerable gains in India, where we have had not much presence in the market till now. We do not operate on the basis of market share but on customer demand and products". Figo was to be launched in early 2010 in the price range of Rs. 349,000 to Rs 442,000 for the petrol version and Rs 447, 000 to Rs 529,000 for the diesel version….
Why is Ford Motor company regarded as a global firm.
(6 Marks)
What is the relationship between Ford Motor Company and Ford India.
(3 Marks)
Why did Ford believe that Ford Figo would change the motor market in India.
(5 Marks)
Why are the Indian cars doing well in the global market?
(5 Marks)
What lessons can global managers in the motor industry learn from this case.
(6 Marks)
Question Two
Robert Luiz, General Motors Vice-chairman, noted "we can no longer afford the luxury of telling ourselves we’re going after the domestic buyer……… That is just looking for a bigger piece of a shrinking pie." (Quoted in Fahey 2002:82). In essence he was saying firms should reach out for global markets.
Discuss, using illustrations, the FOUR main phases firms go through before they adopt a global strategy.
(16 Marks)
Discuss the benefits and risks of adopting a single country strategy.
(9 Marks)
Question Three
Global strategy dimensions can be categorized into THREE main dimensions namely, configurations and coordination, standardization and integration. Explain each of the dimensions using relevant examples.
(15 Marks)
Explain the TWO main macro globalizing drivers of firms.
(10 Marks)
Question Four
What are the highlights in the historical evolution of globalization concept?
Identify and discuss the main characteristics of global managers and show how the ideals of glolism can be instilled to local firm managers. (20 Marks)
Question Five
Risk assessment is critical when selecting global target markets. Identify and discuss the factors to be considered in the risk assessment.
(15 Marks)
Identify and discuss the key entry barriers to a global market using relevant examples.
(10 Marks)
Question Six
Green Field theory can be defined as a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. Discuss the main advantages and disadvantages of this strategy.
(12 Marks)
Discuss proactive and reactive motives of firms entering new markets.
(10 Marks)
What is globalism.
(3 Marks)
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