IB06International Business

Assignment No.I

Assignment Code: 2012IB06A1 Last Date of Submission: 15th April 2012Maximum Marks:100

Attempt all the questions. All the questions are compulsory and carry equal marks.

Section-A

Ques.1 (a). Describe in detail the opportunities and challenges that Globalization has presented. Support your answer with examples.

(b). What are the functions of Ministerial Conference?

Ques. 2 (a) Write short notes on any two:

1- Futures and options contract

2- WTO agreement on Services

3- Counter Trade

(b) Why some joint ventures succeed and why some fail to deliver?

Ques.3 (a). Discuss in detail factors determining exchange rates(b). How does exchange rate fluctuations affect the profitability of companies

engaged in Export Import.

Ques.4 Choice of a strategy for a multinational firm depends on a comparison of benefits and costs of implementation. On this basis, it may be logical for a firm to pursue a multi-domestic strategy, for others a global strategy or an international strategy, and still for others, a transnational strategy? Explain.

Section-B

Case Study: Monsanto’s Repatriation Program

Monsanto is a global provider of agricultural products with revenues in excess of $4 billion and 10,000

employees. At any one time, the company will have 100 mid and higher-level managers on extended

postings abroad. Two thirds of these are Americans who are being posted overseas, while the

remainder are foreign nationals being employed in the United States. At Monsanto, managing

expatriates and their repatriation begins with a rigorous selection process and intensive cross-cultural

training, both for the managers and for their families. As at many other global companies, the idea is to

build an internationally minded cadre of highly capable managers who will lead the organization in the

future.

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One of the strongest features of this program is that employees and their sending and receiving

managers, or sponsors, develop an agreement about how this assignment will fit into the firm’s

business objectives. The focus is on why employees are going abroad to do the job, and what their

contribution to Monsanto will be when they return. Sponsoring managers are expected to be explicit

about the kind of job opportunities the expatriates will have once they return home.

Once they arrive back in their home country, expatriate managers meet with cross-cultural trainers

during debriefing sessions. They are also given the opportunity to showcase their experiences to their

peers, subordinates, and superiors in special information exchanges.

However Monsanto’s repatriation program focuses on more than just business; it also attends to the

family’s reentry. Monsanto has found that difficulties with repatriation often have more to do with

personal and family-related issues than with work-related issues. But the personal matters obviously

affect an employee’s on-the-job performance, so it is important for the company to pay attention to such

issues.

This is why Monsanto offers returning employees an opportunity to work through personal difficulties.

About three months after they return home, expatriates meet for three hours at work with several

colleagues of their choice. The debriefing session is a conversation aided by a trained facilitator who

has an outline to help the expatriate cover all the important aspects of the repatriation. The debriefing

allows the employee to share important experiences and to enlighten managers, colleagues and friends

about his or her expertise so others within the organization can use some of the global knowledge.

According to one participant, “It sounds silly, but it’s such a hectic time in the family’s life , you don’t

have time to sit down and take stock of what’s happening. You’re going through the move, transitioning

to a new job, a new house, the children may be going to a new school. This is a kind of oasis; a time to

talk and put your feelings on the table.” Apparently,it works; since the program was introduced in the

early 1990s, the attrition rate among returning expatriates has dropped sharply.

Questions:

(a). Why does Monsanto need to recruit expatriates for their US Operations?

(b). Why & How does the repatriation programme of Monsanto is helping reduce attrition rates?

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IB06International Business

Assignment No.II

Assignment Code: 2012IB06A2 Last Date of Submission: 15th May 2012Maximum Marks:100

Attempt all the questions. All the questions are compulsory and carry equal marks.

Section-A

Ques.1 Write short note on :(a). FDI in Retail Business in India(b). FEMA(c). Incoterms(d). ‘Just in Time’ manufacturing

Ques.2 Discuss various pre-ship documents to be made by an exporter of Engineering goods.

Ques.3 What is meant by the term ‘Flexible manufacturing’ and JIT?

Ques.4 What is ‘transfer pricing’? Explain terms like, FOB & CIF.

Section-BCase Study

In March 2000, Deutsche Bank, Germany’s largest bank, announced it would merge with Dresdner bank, Germany’s third largest bank. The stated strategic goal of the merger was to create a European investment and asset management institution that would have the economics of scale required to compete with the top global investment banks, including Citicorp and Merrill Lynch. An important component of the proposed merger was a plan by Deutsche Bank and Dresdner to combine their retail bank operations into Deutsche Bank’s retail banking division, Bank 24, and then spin off bank 24 as an independent entity in which the merger company would have no more than a 10 percent ownership stake. At the time, Bank 24 had some 11 million customers, the majority in Germany but 1.5 million in Italy and another 600,000 in Spain.

In addition to its, 2000 retail branches, Bank 24 had also been a pioneer in using the Internet to sell banking services, and by 2000 some 20 percent of all transactions were online. The plan to spin off bank 24 indicated the two banks had decided to withdraw from retail banking, instead concentrating on the wholesale side of the business (investment banking and money management). Most analysts applauded the proposed deal, noting that retail banking in Germany was a low-margin business that held few attractions, while investment banking was a high-margin business.

By April 2000, however the proposed deal had collapsed following significant disagreements between management teams at the two companies. Initially, few thought that this would lead to a change in strategy at Deutsche Bank, but six months later the bank announced it had rethought its retail strategy. Suddenly, bank 24 was at the heart of a new strategy by Deutsche Bank to build a pan-European retail channel. The change of strategy stemmed form a growing realization that Deutsche Bank’s branch and online banking platform provided a powerful sales channel to a rapidly growing “money class” – Europe’s highly educated and prosperous 30 and 40 year olds. Deutsche Bank, estimated there are more than 60 million people in this demographic with the European Union. Increasingly, this group is switching their savings from deposit accounts into equities and investment funds as they begin to plan for their retirement. Deutsche Bank, realized it could use its retail branch

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network to sell the investment banking and asset management operations. Deutsche Bank also realized that with the advent of the euro, the impediment to the cross-border sale of money management products had been significantly reduced, at least within the Euro-zone.

To implement the strategy, Deutsche Bank plans to weld bank 24’s operations, which are scattered across seven European countries, into a coherent whole. The model in each country will be the same. The basic idea will be to offer a full range of financial services via branch offices, telephones and increasingly the Internet. But in an effort to curb costs, the emphasis is likely to be the Internet. Thus, the company wants to grow its retail customer base to 14 million by 2004, while keeping the number of branches constant at 2,000 and reducing total employment by about 10 percent. The geographical distribution of branches will change, however, with some branches in Germany being consolidated or closed, while retail branches are opened in other European countries. The initial plans call for further expansion in Italy, Spain, France and Belgium, where Bank 24 already has a presence. The company, however, also states that if the concept works, it will move into the Netherlands and the United Kingdom, as well as some non – EU countries, such as Poland and the Czech Republic (both of which have applied to enter the EU). Deutsche Bank also indicated that Bank 24 might make selected acquisitions to establish a larger retail presence in other EU nations.

Another element of the strategy calls for Deutsche bank to expand the reach of its online brokerage unit, Maxblue, into a pan-European discount broker. Bank 24 will be used to market Maxblue. In late 2004, Maxblue had some 300,000 client accounts, the majority in Germany. The plan calls for this number to grow to 1.5 million by 2008, many of whom would be outside of Germany. If attained this would give Deutsche bank a 3 percent share of the global online market is expected to exist by 2008.

Implementing this strategy will require heavy investments, particularly in information technology. Before the change in strategy, Deutsche Bank had budgeted some $ 110 million for building up Bank 24, including redesigning branches abroad, unifying information technology, and marketing the new look. Now estimates suggest it will take some $ 250 million of marketing expenditure just to achieve brand recognition across Europe, and significant additional investments will be required in information technology. Despite this investment, Deutsche Banks claims the shift in strategy will boost Bank 24’s profits from euro 400 million in 2004 to euro 1 billion by 2008.

Questions:

1. What are the main elements of Deutsche Banks strategy for Bank 24? Does this strategy hold appeal given (a) the creation of a single market in the European Union and (b) the introduction of the euro?

2. What potential impediments do you think might get in the way of Deutsche Bank’s aspirations to establish a pan-European retails presence and a pan-European discount brokerage?

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