KOLEJ UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY, FINANCE AND BUSINESS

ACADEMIC YEAR 2015/2016
JANUARY EXAMINATION
ABDM5174 INTERNATIONAL BUSINESS STRATEGY
MONDAY, 11 JANUARY 2016

TIME: 2.00 PM 5.15 PM

(3 HOURS 15 MINUTES)

ADVANCED DIPLOMA IN BUSINESS STUDIES

(INTERNATIONAL BUSINESS)

Instructions to Candidates:
Time allowed:
Reading and Planning : 15 minutes
Writing
: 3 hours
During reading and planning time, only the question paper may be annotated. You are not
allowed to write in your answer book until instructed to do so by the chief
invigilator/invigilator-in-charge.
This paper is divided into TWO (2) sections:
SECTION A: Answer ONE (1) compulsory case study question.

(40 marks)

SECTION B: Answer THREE (3) out of four (4) questions.

(60 marks)

This question paper consists of 5 questions on 4 printed pages.

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ABDM5174 INTERNATIONAL BUSINESS STRATEGY
SECTION A (40 marks)
Answer ONE (1) compulsory case study question.
Question 1
Firms Old to Explore Chinas 2nd-tier Cities
Nanning: Malaysian companies need to explore and expand into Chinas second-tier markets by
capitalising on the growing purchasing power there, Malaysia External Trade Development Corp
(Matrade) trade commissioner in Guangzhou P. Suresh Kumar said. According to Suresh, second-tier
cities such as Nanning, Foshan, Zhuhai, Nanjing and Tianjing were good areas for Malaysian
companies to enhance their visibility in the ever-competitive markets in China. The focus now is also
to expand into the second-tier markets. Although a city like Nanning is a second-tier market, the
populace has purchasing power. The second-tier markets are rapidly growing, he told Malaysian
reporters on the sidelines of the just concluded China-Asean Expo (Caexpo) 2015 here.

The second-tier cities are regarded as the growth engines of Chinas economy, boosted by huge
amounts of investment, new infrastructure and an influx of talents. Furthermore, Malaysian food and
beverages had gained the confidence of Chinese consumers as they complied with the local standards
while durian-based products, white coffee and curry powders were popular in the second-tier cities.
Source: Adapted from The Star, 2015. 26th,October.
Required:
(a) As an International Marketing Manager for Musang Coffee Sdn. Bhd., one of your
responsibility is to expand and market Musang Brand coffee product to China. Discuss the
critical factors that you should consider before investing in China.
(20 marks)
(b) Explain the possible reasons that attract Musang Coffee Sdn. Bhd. to venture into China.
(20 marks)
[Total: 40 marks]

This question paper consists of 5 questions on 4 printed pages.

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ABDM5174 INTERNATIONAL BUSINESS STRATEGY
SECTION B (60 marks)
Answer THREE (3) out of four (4) questions.
Question 2
(a) A joint venture (JV) is a form of foreign invested enterprise (FIE) that is created through a
partnership between foreign and host country investors and share profits, losses and
management of the JV. Discuss TWO (2) advantages and TWO (2) disadvantages of
formation of an international joint venture company.
(10 marks)
(b) An organisation structure defines how activities such as task allocation, coordination and
supervision are directed towards the achievement of organisational aim. Some multinational
companies adopted international product division organisation structure with certain condition
for the reason of the ability to segregate large sections of the companys business into semiautonomous groups. These semi-autonomous groups are mostly self-managed and focused
upon a narrow aspect of the companys products or services. Discuss.
(10 marks)
[Total: 20 marks]

Question 3
Strategic fit expresses the degree to which an organisation is matching it resources and capabilities
with the opportunities in the external environment. The matching takes place through strategy and it is
therefore vital that the company has the actual resources and capabilities to execute and support the
strategy. Strategic fit can be used actively to evaluate the current strategic situation of a company as
well as opportunities such as merger and acquisition, and divestitures of organisational divisions.
Illustrate the process of developing the strategic fit.
[Total: 20 marks]

Question 4
XYZ Berhad is celebrating its 50 th anniversary in 2015. The company is one of Asias best-managed
multinationals and is involved in hospitality business, entertainment, plantations, technology,
manufacturing and retailing across seven countries. In order to be effective and efficient, XYZ Berhad
is currently adopting matrix organisational structures in managing its international business.
(a)

Discuss the FOUR (4) advantages of matrix organisational structures.

(b)

Discuss the FOUR (4) disadvantages of matrix organisational structures.

This question paper consists of 5 questions on 4 printed pages.

(10 marks)
(10 marks)
[Total: 20 marks]

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ABDM5174 INTERNATIONAL BUSINESS STRATEGY
Question 5
(a) The ASEAN Free Trade Area (AFTA) has now been virtually established. ASEAN Member
Countries have made significant progress in the lowering of intra-regional tariffs through the
Common Effective Preferential Tariff (CEPT) Scheme for AFTA. More than 99 percent of the
products in the CEPT Inclusion List (IL) of ASEAN-6, comprising Brunei Darussalam,
Indonesia, Malaysia, the Philippines, Singapore and Thailand, have been brought down to the
0-5 percent tariff range. Arguments arises that only export oriented countries are the major
beneficiaries of regional free trade and therefore creating the barriers to international free
trade enlarge.
Source: Adapted from Association of Southeast Asian Countries, 2015. 27th October.
Criticise the statement above.

(10 marks)

(b) One of the purposes of direct investment in a foreign country by a business organisation is to
improve their turnover. The business organisation requires certain competitive advantages to
be successful in their foreign country investment. Discuss the above statement with the use of
Eclectic Theory.
(10 marks)
[Total: 20 marks]

This question paper consists of 5 questions on 4 printed pages.