Global Strategic Management Question Paper
Global Strategic Management
Course:Master Of Business Administration
Institution: Kenyatta University question papers
Exam Year:2008
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2008/2009
FIRST SEMESTER EXAMINATION FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
BBA 610: GLOBAL STRATEGIC MANAGEMENT
DATE: ___MONDAY 24TH NOVEMBER 2008_____ TIME: 2.00 P.M. –5.00 P.M.
INSTRUCTIONS: Answer FOUR (4) questions. Question ONE (1) is compulsory
Q1.
Read the Case and answer the questions below:
In 2005, Daimler Chrysler introduced a new car; a new brand and a new look with
advanced technology in nine EU countries. It was named „Smart? and was
certainly distinctive and nice looking. The Smart car is only 2,500 mm long,
1,515 mm wide and 1,529 mm high. It seats two adult or one adult and two
children. The Smart car?s weight is 720kg, has a 22 litre-gas tank, and gets 100
km per 4.8 litres. It has a frame called Tridion Safety Cell, which comes in silver
colour and removable panels, which can be changed in less than an hour, in such
colours as red, yellow, black, blue and green. Toe optimal leather seats are
papaya coloured. If you are thinking that the interchangeable panels and the wild
colours remind you of a Swatch watch, you are correct as Swatch watch was the
inspiration for developing this car. In the early stages of the project, Daimler-
Benz and SMH (maker of Swatch Watch) formed a joint venture; the car was
called “Swatch Mobile”. The Swatch Mobile concept was based on Nicolas? (Chairman of SMH)
conviction that consumers become emotionally attached to cars just as they do to
watches. His vision was of high safety, ecology and a very consumer-friendly
area to sit in. Like the Swatch, the Swatch Mobile was to be affordable and stylish. Nicola noted that safety would be a key selling point, declaring, “This car
will have the crash security of a Mercedes. The car was to emit almost no pollutants due to its electric engine, and was to be capable of gasoline powered operations, using a highly efficient miniaturized engine. Nicolas further predicted that worldwide sales would reach 1 million in the U.S accounting for half the market. Shortly after the introduction, the joint venture between Swatch and Daimler-Benz ended when Daimler bought out SMH?s stake. Nicolas was disillusioned and Daimler-Benz found it difficult to work with Nicolas.
Todate, Smart car has two criticisms; safety and price. Despite developments of crash safety, that „enables smaller cars to be just as safe as larger ones?. During its first winter (2006) on the road, there were reports of several accidents. In response, the company developed “Trust Plus”, a software package that will cut power if the wheels start to slip. As for the price, it originally sold for US10,500.AfteraperiodofdisappointingsalesinItalyandFrance,thepricewasreducedtoUS9,300. although the buyers of Smart car have high incomes, or already own two cars, they are concerned about the price-value relationship.
Answer the following questions:
(a)
“Swatch is a unique success story”. Explain this statement. [10 marks]
(b)
Identify clearly the market potentials that the company has to exploit and discuss whether the Smart car is a global brand or not. [10 marks]
(c)
Describe the company?s competitive strategy for its continued success in business. [8 marks]
(d)
How should the company position the smart car in the markets that it operates in? [8 marks]
(e)
What implications would the price reduction strategy have on the company?s customers? [4 marks]
Q2.
(a)
The term competitive advantage is not a concept, which is easily understood. How would you define it? How would you analyze it in order to advance an appropriate advice to enable organizations survive and manage their operations in a highly volatile environment? [12 marks]
(b)
Giving examples outline the difference between competitive advantage and comparative cost as used in global business management. [8 marks]
Q3.
(a)
Identify and explain the differences among a national, an international and
global products or brands. [6 marks]
(b)
How can buyer attitude about a product?s country of origin affect its global business strategy? What major differences in attributes would business managers contend with a global environment? [14 marks]
Q4.
A firm conducting business outside its home country must carefully study the government structure in the target market and analyze the salient issues arising from the political environment.
(a)
Define political risk and explain why its analysis is critical to firms operating outside their countries of origin. [8marks]
(b)
Describe the legal aspects governing global business management clearly outlining their impact on business transactions. [12 marks]
Q5.
Discuss the following giving examples of companies that use each of the four
generic strategies in cutting an edge over the others:
(a)
Overall cost leadership strategy
(b)
Cost focus strategy
(c)
Differentiation strategy
(d)
Focused differentiation strategy
[20 marks]
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