PART 1

A. GIVE THREE POSITIVES AND NEGATIVES FOR FIRST MOVER ADVANTAGE

Positives:

1. Technology leadership
First movers can make their technology/product/services harder for later entrants to
replicate. In addition, applying for patents can protect and establish a first-mover advantage.

2. Control of resources
The second benefit is the ability to control strategic and/or scarce resources. For example,
Wal-Mart was able to locate their stores in small towns and prevent others from entering
the market.

3. Buyer-switching costs
The third benefit that first movers may enjoy is buyer-switching costs. If the first business is
able to establish itself first, it may seem inconvenient consumers to switch to a new brand.

Negatives:

1. The first mover may invest heavily in persuading consumers to try a new product. Later
entrants would benefit from these informed buyers and would not need to spend that much
on educating consumers.
2. Later entrants can avoid mistakes made by the first mover.
3. Later entrants can identify areas of improvement by the first mover and take advantage of
it.

B. CHALLENGES (THREE EACH) IN DOING BUSINESS IN A HIGH C ONTEXT AND LOW CONTEXT SOCIETY

High Context Society:

1. Misunderstanding when exchanging information

2. Large amount of information is provided in a non-verbal manner, e.g. gestures, pauses,
facial expressions
3. ‘Unwritten’ rules that are taken for granted but can easily be missed by strangers
4. Shorter contracts since less information is required

Low Context Society:

1. Extensive background information and explanations are provided verbally to avoid

misunderstandings
2. People follow rules and standards closely
3. Contracts tend to be longer and very detailed
PART 2

COMPLETE THE CROSSWORD.

1. PPP - Purchasing Power Parity

2. Pure
3. DAVOS
4. Market
5. ET
6. Ethno
7. High
8. FII – Foreign Institutional Investors
9. Subsidy
10. Growth