JUNE 2010 EXAMINATION
IB01
INTERNATIONAL BUSINESS
Time: Three hours
Maximum Marks : 100
Note:
1.
2.
3.
4.
The paper is divided in three sections: Section A, Section B and Section C.
There are seven questions in Section A, students are required to attempt any
four.
Section B has 5 questions, attempt any three.
All the questions of Section C (Case Study) are compulsory.
SECTION – A
1.
What is the impact of globalization on Indian Business?
(10)
2.
Discuss the four basic principles of WTO?
(10)
3.
Discuss key issues in deciding expatriate manager’s compensations.
(10)
4.
Distinguish between franchising and licensing, joint venture and subsidiary, strategic
international alliances and joint venture.
(10)
5.
Why do countries form themselves into regional trading blocks ? Briefly discuss the
major regional trading groups bringing out their specific objectives,
6.
Discuss structure of foreign exchange market.
(10)
7.
Enumerate the hedging tools.
(10)
SECTION – B
8
What is Globalization? Discuss globalization of market and globalization of
production.
9
What are the main features of WTO Agreement on Agriculture? Whether Indian
Government support to agriculture in the form of procurement policy subsidy on
fertilizers and electricity is compatible with WTO policy.
10
Discuss factors influencing choice of channels in International Distribution of
merchandise.
11
What is the difference between a transnational corporation, multinational corporation
and global corporation? Explain with examples.
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12.
What are the different type of risks in International Business? What is meant by
hedging in foreign exchange market?
Section-C
13.
CASE STUDY
Market Entry Strategies
Ranbaxy Laboratories Limited was registered in India in the year 1961. Dr. Parvinder
Singh made immense contribution to Ranbaxy, with bold new ideas. He joined Ranbaxy
in 1967, was appointed as its Joint Managing Director in 1977 and elevated as Managing
Director in 1982. He rose to the position of Vice Chairman and Managing Director in
1987 and took over as Chairman and Managing Director in 1993. Ranbaxy formulated
export strategy depending on the opportunities in 1975. In 1977, Ranbaxy has its
international joint venture in Lagos (Nigeria). In 1983, a modern dosage forms facility at
Dewas (MP) in India was developed. In 1985, Ranbaxy Research Foundation was
established. Stancare, Ranbaxy’s second pharmaceutical marketing division, also started
functioning.
Ranbaxy had always been very outward looking as a company. It
recognized that if 99% of the pharmaceuticals market lay outside India, tapping the
international potential was always something bigger than just meeting export
commitments. Ranbaxy had foreseen that the future regime would be based on worldwide
product based intellectual property rights.
Ranbaxy had repositioned itself in 1992 and the following changes were done in the
organization to make internationalization a success: Three clear elements emerged:
(a) First, Ranbaxy decided that the company will not look at diversification into unrelated
or even related areas and it will stick to its core area of pharmaceuticals.
(b) Second, it stated its intent to be an international company. This implied a focused and
rapid expansion into foreign countries.
(c) Third, it clarified that it will be a research-based company, which meant that it will
discover its own proprietary innovative drugs, to leverage in the era of worldwide
intellectual property rights?
The Indian pharmaceutical industry has long struggled with an international image that
has collectively labeled its members as trespassers of Intellectual Property Rights.
Ranbaxy Laboratories was serious about its image as an “international” player and fought
hard and long against the stigma attached to Indian firms. In 1992, Ranbaxy Laboratories
entered into an agreement with Eli Lilly & Co. of USA for setting up a Joint Venture in
China called Ranbaxy (Guangzhou China) Limited. In 1994, Ranbaxy Laboratories
established Regional Headquarters in London (UK) and Raleigh (USA). Ranbaxy’s
Global Depositary Receipts (GDRs) got listed in Luxemburgh Stock Exchange. Thus,
1994 was a very important year in the growth phase of the company.
In 1995, Ranbaxy Laboratories acquired Ohm Laboratories, a manufacturing facility in
the US. And the FDA approved, state-of-art new manufacturing wing, at Ranbaxy’s US
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subsidiary Ohm Laboratories Inc., started functioning. In 1997, Ranbaxy Laboratories
crossed a sales turnover of Rs. 10,000 million, with its exports reaching an all time high
of Rs. 5,000 million. In 1999, Bayer AG, Germany and Ranbaxy signed an agreement for
International Strategic Alliance where Bayer obtained exclusive development and
worldwide marketing rights to an oral once daily formulation of Ciprofloxacin, originally
developed by Ranbaxy. Ranbaxy’s strategy was to market its products globally through
this alliance.
In 2000, Ranbaxy acquired Bayer’s Generics business (trading under the name of Basics)
in Germany. It also forayed into Brazil, the largest pharmaceutical market in South
America and achieved sales of US$ 2.5 million in that market. March 21, 2006:
Ranbaxy’s US arm buys patents, trademarks and automated manufacturing equipment
from Senetek for its disposable auto injector for self-administration of parenteral drugs
for anaphylactic shock. Ranbaxy, at present, has manufacturing operations in more than a
dozen countries and its products are available in over 125 countries. The company has an
expanding international portfolio of alliances, joint ventures and representative offices
across the globe with a presence in top markets of the world.
QUESTIONS :
1. What kind of repositioning strategic steps were taken up in 1992 by Ranbaxy
management? Do you think that repositioning helped Ranbaxy?
2. What are global market entry modes?. Discuss the global market entry modes chosen
by Ranbaxy to grow as an Indian multinational company?
3. Why did Ranbaxy enter into International Strategic Alliances with Eli Lilly & Co. of
USA and Bayer AG of Germany?
4. What are IPRs? Do you think that the overseas expansion strategy of Ranbaxy, in
turn, help them to get better image and build a strong brand?
(3+3+4+5)
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