CDBM Exam Review Hints

Contemporary Development in Business Management

Exam structure Part 1 (50%)5 out of 10 short-answer questionsPart 2 (50%)All three questions on 1 out of 3 themesThis is an open book examination. You can take into the exam hall, up to ten sheets (therefore twenty sides - double sided) of A4 white paper with handwritten (or typed in font size 8) notes.

Part 1 (50%)5 out of 10 short-answer questionsFull range of topicsApprox. 15 mins. per question Refer sample questions handoutFive questions only!

Part 2 - - - 50%!All three questions on 1 out of 3 themesInternational economic factorsNewly-developing countriesKnowledge management(Refer exam brief given to you)One theme only!

ANSWER TO THE QUESTIONS!!!READ CAREFULLY and answer to the questionDo not write tons or irrelevant things to show that you knowBefore writing: Think, plan, select the information E.g. write down key points on a draftWrite only relevant information!

Part 2 all three question on one themeGeneral and introductory In relation to a range of industries what are some of the main effects of.

Organization/industry-specific In greater depth explain how the work of ..has impacted on your chosen organization or industry.

Evaluative Critically assess and evaluate how your chosen organization or industry has responded to..

(See past papers esp. Oct. 2010) 50% 1.5 hours !!relatively easy!More difficult !The most difficult but shortest part

Different questions / Different levels of analysisWhat are some of the main ways (Description / explanation /main points)

Analyze how (mechanisms)

Critically evaluate howDeeper levels of analysis!

Description (how things happened)Analysis (why things happened this way)Critically evaluate: Your own evaluation based on the analysis!Show that you understand different side of argumentShow different sides: advantages and disadvantages, costs and benefitsYour own final evaluation / recommendation

Short-answer questions 15 mins. each (approx.)See sample questions Marks awarded for relevance, knowledge and application!Answer to the question! Demonstrate your knowledge! (relevant)Apply your answer to your organization/industry!- Analysis- Explanation and - Application

Exam preparation Make sure that you understand the basics of each topic so that you can answer a straight-forward question. Identify any topics that are particularly applicable. Identify any sample questions that are particularly applicableActivities

Company/Industry Profile No more than 400 words included in your notes!Not marked but the marker does need some basic information.Bullet-points plus a brief commentary.Some of the information may be useful for answering questions e.g. main competitors and market-shares

Referencing? Exams are more relaxed about referencing and there are no specific marks but..-> better some references than no referencesAbbreviated references acceptable in your answers.-> Include some key references in your notes.

Do not get obsessed over your referencing!

It looks good!The EconomistWorld BankIMFUnited NationsThe New York TimesSaigon TimesFreedom house (www.freedomhouse.org)http://www.freetheworld.com/Economicfreedom.com

Kinh qu !WikipediaYahoo answerwww.economicsforidiots.comFinanceblog.com-> You can use them but do not quote them (do not write the reference in your exam)

Part 1: Short QuestionsCompetitive Environment

Source: Adapted from M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors 1980, Free Press, 1980, p. 4. Copyright 1980,1988 by The Free Press, a division of Simon & Schuster Inc. Reproduced with permission.Competitive Environment

Porters 5 Forces ModelAn entry barrier is anything that hinders (prevents) entry and has the effect of reducing or limiting competition.

Entry barriers plays an important role in a wide variety of competition matters because it is vital to the analysis of market power.

Threat of New Entrants Expected RetaliationPage 14 & 15

Michael Porters five forces analysis on Vietnam milk industry Competitive rivalryPotential entrantsBuyersSubstitutesSuppliersLowLowMediumHigh

The threat of new entrants: LowSome outstanding characteristics of the milk industry include stable growth, high profit, and comparatively stable market share.In order to enter the market, companies overcome barriers such as:Product specification;Large capital requirement;Distribution channelsThe pressure from new competitors is not high. Competition is much harsher in the internal industry.

Global Institutions,Global Economy and Global Organisations

Globalization

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What is Globalization?Globalization refers to the shift towards a more integrated and interdependent world economy. Key elements of globalization Globalisation of marketsGlobalization of the productionGlobal institutions

Globalisation of markets

Products of identical form offered throughout the worldCoca-cola, KFCBrand marketed worldwide but businesses need to vary their products to suit local tastes and preferencesUniversal needs: Wheat and steel, aeroplanes, computer microchips, software, financial assets

Globalisation of productionWhen goods and services are sourced from a range of locationsBoeing 777: many suppliers in different placesEnsure highest qualityReduce costs

The Globalization of Market Globalization of market refers to the merging of historically distinct and separate national market into one huge global market place.Falling barriers border trade have made it easier to sell internationally .

Fully merged?No!!! There are barriers to international trade!!!

The Globalization of Market Consumer products such as Citigroup credit cards, Coca-Cola soft drinks, Sony PlayStation video games, McDonalds hamburgers, and Starbuck coffee are frequently held up as prototypical example of this trend. These products are just benefactors of this trends: they are also facilitators of it. By offering the same basic products worldwide. They help to create a global market .

GlobalisationInternationalisation: travel and communication between countriesGlobalisation: More Recent (last 40 years)Involve deep integration

GlobalisationLinks between elements of MNE at a different range of levels:Company carry out research and development in a countryProduction in anotherHead office in a third countrySales and marketing departments in every continent

Globalisation: Key elementsImportance of FDIMultinationals (MNE)Global financial markets

The Emergence of Global Institution Over the half century a number of important global institutions have been created to help perform these functions. There institutions include the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO); the International Monetary Fund (IMF); and its sister institution, the World Bank and the United Nations (UN).

Global institutionsAll these institutions were created by the voluntary agreement between individual nation - states, and their functions are enshrined in international treaties.

World BankInternational financial institution that provides loans to developing countries for capital programs.The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (as amended effective 16 February 1989), all of its decisions must be guided by a commitment to promote foreign investment,international trade, and facilitate capital investment

International Monetary Fund(IMF) The organization objectives are to promote international economic cooperation,international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of paymentsneeds.

IMFThe IMF describes itself as an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

IMFCountries contribute money to a pool through a quota system from which countries with payment imbalances can borrowfundstemporarily. Through this activity and others such as surveillance of its members' economies and policies, the IMF works to improve the economies of its member countries.

The United NationsThe United Nations was established on October 27, 1945, by 51 countries committed to preserving peace through international cooperation and collective security. When states become member of United Nations, they agree to accept the obligations of the UN charter, an international treaty that establishes basic principles of international relations.

The United NationsUN is best know for peacekeeping role, one of the organization's central mandates is the promotion of higher standards of living, full employment and conditions of economics and social progress and development that are related to the creation of vibrant global economy.

The United NationsFour purpose of United NationsTo maintain international peace and security.To develop friendly relations amongst nations.To cooperate in solving the international problems, andPromoting respect for human rights and to be a center of harmonizing the actions of nations.

UN played a leading contribution to national and international statistics and set the frame for assessing the worlds economic and social progress or the lack of itSupported the integration of the global statistical community

The United Nations

UNPlayed a major part in establishing a professional ethic of statistical independence and objectivityEncouraged public access to information, and contributed to the building of democracyEstablishing national accounts

Foreign Direct Investment (FDI) and Transnational Corporations (TNCs)UNs position on FDIs and TNCs evolved from confrontation to cooperation and voluntary agreementsUN brought to attention the need for a multilateral approach in dealing with the TNCsThe Global Compact seeks to advance responsible corporate citizenship so that business can be a positive force to the challenges of globalizationUN provided a useful forum for the world and a spawning ground for ideas that have the potential to make FDIs and TNCs more beneficial to humankind

Regional PerspectivesThe strong point of the UN is its regional and country perspectivesThe UNs regional commission have made many important contributionsProvided regional leadership, including contributions to the realm of ideas and policy analysis in trade, energy, industry and transport as well social policies in education, health, and social welfare, along with technical assistanceSelected contributions made by regional commission: Women in Development; Development Planning; Regionalization versus Globalization; Independent Regional Analysis

Legal EnvironmentDiscuss how health and safety, and product safety, legislation mayaffect an organisationPage 242, 244

Consumer Protection LawsFederal and state statutes and regulations that promote product safety and prohibit abusive, unfair, and deceptive practices.

Consumer Protection LawsThe Vietnam Standard and Consumers Association (VINASTAS)

Its mission is two fold: to promote standardisation and product safety and to improve consumer protection in Vietnam.

http://www.vietnamlaws.com/vietnamlawsonline_freeversion.aspx

LAW ON FOOD SAFETYThis Law provides for the conditions to assure food safety, food production and trading activities; food advertisement and labeling; imported and exported food; control of food contamination risks; prevention and dealing with food safety incidents; for the power, documents and procedures to issue certificates of eligibility for food production establishments; food testing; information, education and communication about food safety; State management of food safety and specialized inspectorate of foods safety.

LAW ON FOOD SAFETYTo encourage and develop a road map for compulsory application of the Good Manufacturing Practice (GMP), Good Agricultural Practice (GA), Good Hygiene Practice (GHP), Hazard Analysis and Critical Control Points (HACCP) and other advanced management systems for food safety control processes in food production and trading. http://www.spring.gov.sg/QualityStandards/etac/food/Documents/Vietnam.pdf

Vinamilk Product SafetyVinamilk is the leading producer of dairy products in Vietnam based on sales volume and revenue.It offer one of the largest dairy portfolios in Vietnam, across a wide selection of products, flavours, and packaging sizes.It also export to countries such as Australia, Cambodia, Iraq, the Philippines and the United States;It satisfy customers with high-quality, safe, and diverse products, the best service and competitive prices.

ContinueIt offer customers with the best products qualified and food hygiene & safety as per Vietnam Law;Vinamilk products are produced by the modern and closely controlled production lines in accordance with the International Quality Control Standards of ISO and HACCP certified;Vinamilk products are qualified with food quality, hygiene and safety standards in accordance with the published standards;

Competitive EnvironmentDiscuss the different ways in which markets may be structured, and how each structure is likely to affect businesses in that marketPage No 297

Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Four Market StructuresPure Competition: Monopolistic Competition:Oligopoly:Monopoly:

Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Distinguishing features of the Four Market Structures

CharacteristicsPure CompetitionMonopolistic Competition Oligopoly MonopolyNumber of competitorsManyFew to manyFewNo direct competitorsEase of entry into industry by new firmsEasySomewhat DifficultDifficultRegulated by governmentSimilarity of goods or services offered by competing firmsSimilarDifferentCan be either similar or differentNo directly competing goods or serviceControl over prices by individual firmsNoneSomeSomeConsiderableDemand curves facing individual firmsTotally elasticCan be either elastic or inelasticKinked; inelastic below kink; more elastic aboveCan be either elastic or inelasticExamples2000-acre ranchBanana RepublicBPCommonwealth Edison

Monopoly - VinamilkIn the yoghurt market, Vinamilk is enjoying a near monopoly position with a market share of about 90%. However, new participants may be a threat for Vinamilk and we believe that some market share will be taken away from Vinamilk over the next few years.

Monopoly - Vinamilk(1) its monopoly position in dairy market; (2) its strong brand name and (3) its peerless distribution network.

The Socio-cultural EnvironmentThe main demographic features of Vietnam;Most important demographic factors affecting Vinamilk;Page 161 - 174

The Technological EnvironmentYour chosen organisation and/or industry sector e.g. Vinamilk / Diary products, identify some of the most important benefits and / or problems of e-businessPage 212Page 213 refer activity

The Financial EnvironmentThe Economic EnvironmentMain Functions of the Central Bank of Vietnam;Use suitable examples, how its decisions could affect Vinamilk and /or Diary industry

The Socio-Cultural EnvironmentThe Eco-environmentCorporate Social Responsibility main arguments for and against and explain with suitable example.-Evaluate your company

Part 2: ThemesSet 1 Ecological FactorsSet 2 International Regional IntegrationSet 3 Governmental Regulation of Markets

Economic IntegrationRegional agreementsRegional economic integration refers to agreements between countries in a geographic region to reduce tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other.

While regional trade agreements are designed to promote free trade between countries of a same region there is some concern that the world is moving toward a situation in which a number of regional trade blocks compete against each other.

Economic IntegrationRegional agreements

International Regional IntegrationInternational regional integration has affected business you can use various range of business examples to support your answer;How international regional integration has affected your chosen company and/or industry;Assess and evaluate how chosen organisation has responded to International Regional Integration

Google key wordsASEAN + VINAMILKASEAN + Vietnam + diary industryASEAN + Vietnam + Economic effects (trade impact)

It reflects the move towards liberalisationIt represents attempts by states to benefit from trade creation, economies of scale, product differentiation and efficiency gains.Encourage FDI between participantsMotives for Regional Integration

Motives for Regional IntegrationThe replacement of national markets by global markets.The decline of geographical determinants of the financial location and the internationalisation of the division of labour.The continued strengthening of multinational and private policy-making structures relative to the authority of the states.

Process whereby countries in a geographic region cooperate to either reduce or eliminate barriers to the free flow of products, people, or capitalRegional Economic Integration

Levels of Regional Integration

Levels of Economic IntegrationIn a free trade area all barriers to trade of goods and services among member countries are removed, but members determine their own trade policies with regard to non-membersExamples of free trade areas include the European Free Trade Association (between Norway, Iceland, Liechtenstein, and Switzerland), and the North American Free Trade Agreement (between the U.S., Canada, and Mexico) - NAFTA

Effects of IntegrationPotentialbenefitsPotentialdrawbacks Trade creation

Greater consensus

Political cooperation

Creates jobs

Regional Economic Integration EuropeEvolution of the European Union The EU is the result of:the devastation of two world wars on Western Europe and the desire for a lasting peace;the desire by the European nations to hold their own on the worlds political and economic stage

The evolution of the European Union

The forerunner of the EU was the European Coal and Steel Community, which had the goal of removing barriers to trade in coal, iron, steel, and scrap metal formed in 1951.

The European Economic Community was formed in 1957 at the Treaty of Rome with the goal of becoming a common market

Political Structure - European UnionThe five main institutions of the EU are:

the European Council (resolves major policy issues and sets policy directions)the European Commission (responsible for implementing aspects of EU law and monitoring member states to ensure they are complying with EU laws)the Council of the European Parliament (the ultimate controlling authority within the EU)

Political Structure - European UnionThe five main institutions of the EU are:

the European Parliament (debates legislation proposed by the commission and forwarded to it by the council)the Court of Justice (the supreme appeals court for EU law)

North AmericanFree Trade AgreementPop: 420 millionGDP: $12 trillionMembers: 3Free-Trade AreaBegan: 1994

NAFTA Effects Jobsand wagesThree-nationtrade flowsFutureexpansion?Fast trackauthoritySinglecurrency?

Prentice Hall, 2008International Business 4eChapter 8 - *Central American FreeTrade Agreement

Overview of the Asia-Pacific RegionNorth-East Asia - Japan, Korea, Taiwan, ChinaSouth-East Asia - Myanmar, Laos, Thailand, Cambodia, Philippines, Vietnam, Malaysia, Brunei, Singapore, Indonesia, East TimorRest of the Asia-Pacific Region - Australia, New Zealand, Nepal, Bhutan, Bangladesh, Pakistan, India, Sri Lanka.

Brief history of the colonisation of the Asia-Pacific RegionIndia, Burma (now Myanmar), Malaysia, Hongkong, Singapore previously colonised by the British Indo-China colonised by FranceIndonesia colonised by Holland (Dutch)Taiwan and Korea colonised by JapanPhilippines colonised by Spain and U.S.A.

Why the strong interest in the Asia-Pacific RegionPotential to fulfill needs of some 2.5 billion people - about 60% of the worlds populationNeed to understand the wide diversity of cultures - culture influence needs and business practicesStages of economic development range fromunderdeveloped nations, e.g. Myanmar, Laos, to developing nations, like Malaysia, to Newly Industrialised Economies, like Singapore and Taiwan, to fully developed nations like Japan - presents both threats and opportunities

Association of South-East Asian Nations (ASEAN)Formed in 1967 - today comprise of Thailand, Malaysia, Singapore, Indonesia, Philippines, Brunei, Myanmar, Laos, Vietnam and CambodiaSet up as a group for closer economic, social and cultural cooperationTrade between ASEAN partners (except Singapore), still not very significantEconomies of ASEAN countries dominated by Chinese, although they form only about 6% of the regional population

Association of SoutheastAsian NationsASEAN

1. Economic, social, and cultural development2. Safeguard economic and political stability3. Serve as a forum to resolve disputesPop: 500 millionGDP: $740 billionMembers: 10General CooperationBegan: 1967

ASEAN Free Trade Agreement (AFTA)Launched in 1990Supposed to convert ASEAN into a free trade zone or at most 5% duty by 1st Jan. 2003Raw or unprocessed agriculture to be included under AFTANo progress made in the area of services

EAEC & APECEAEC _East Asian Economic Caucus - an economic grouping without Westerners\Comprise of ASEAN and Northeast Asian economiesNo significant progress in this allianceAPEC - Asia-Pacific Economic Cooperation Forum (ASEAN + China, Taiwan, Hongkong, South Koreaa, Japan, U.S., Canada, Mexico, Australia, New Zealand, Papua New Guinea and Chile)APEC not truly an Asia-Pacific body as U.S. and Canada contributes to a large portion of the trade

Newly Industrialised Economies (NIEs)Consist of South Korea, Taiwan, Hongkong and SingaporeMost successful economies in the world with sustained growth rates of 7-8% p.a. (until the 1997 economic crisis and the 2001 global downturn)The only economies in the developing world likely to catch up with industrialised countries in terms of technology, infrastructure and per capita incomeOne of the key drivers of the economies of Taiwan and Singapore is the electronics industry

The Macro and Micro-EnvironmentBusiness is affected by key changes in the macro and micro-environmentChanges can present opportunities or threats for businessesFactors affecting the macro-environment are political, economic, social and technologicalTrading practices, channels of distribution, the competitive environment, form part of the micro-environment

Governmental Regulation of MarketsWrite an overview of government regulation of markets. You can use various range of examples how these regulation affects business activity and also the company;In-depth explanation about government regulation of markets impacts on selected company;You are required to assess and evaluate how the company responded to or respond to government regulation of markets.

****11*12****Management Focus: The European Commission and Media Industry MergersSummaryThis feature explores the efforts of the European Commission to influence the strategies of media companies as they joined forces in Europe. The European Commission, concerned that proposed joint ventures and mergers between companies would negatively affect competition within the industry, demanded that some companies alter their plans to work together, and indeed abandon relationships all together. Discussion of the feature can begin with the following questions.1. Why did Timer-Warner and EMI agree to drop their proposed joint venture? How did the European Commission convince AOL and Time Warner to change their strategy? 2. In your opinion, were the actions of the European Commission reasonable? Why or why not? Do you feel that the governing bodies of one nation should have the power to restrict the actions of foreign companies? *Management Focus: The European Commission and Media Industry MergersSummaryThis feature explores the efforts of the European Commission to influence the strategies of media companies as they joined forces in Europe. The European Commission, concerned that proposed joint ventures and mergers between companies would negatively affect competition within the industry, demanded that some companies alter their plans to work together, and indeed abandon relationships all together. Discussion of the feature can begin with the following questions.1. Why did Timer-Warner and EMI agree to drop their proposed joint venture? How did the European Commission convince AOL and Time Warner to change their strategy? 2. In your opinion, were the actions of the European Commission reasonable? Why or why not? Do you feel that the governing bodies of one nation should have the power to restrict the actions of foreign companies? ****