MODULE CODE: BSO208SL

MODULE TITLE: International Business

TITLE OF PAPER: Referred Examination

TIME ALLOWED 24 HOURS

DATE of EXAMINATION 11th AUGUST 2021

TIME OF EXAMINATION 9.00 A.M. (11th Aug) – 9.00 A.M. (12th Aug)

FACULTY ACADEMIC PARTNERSHIPS

SCHOOL NATIONAL SCHOOL OF BUSINESS MANAGEMENT

ACADEMIC YEAR 2020/ 2021

STAGE TWO

INSTRUCTIONS TO CANDIDATES:

Answer 6 (six) out of 7 Questions in this paper

The exam is weighted 70% of the module

Referred Exam Paper

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Question 01

When it comes to the operations of Multi-National Corporations , it is done at a global scale.

Certain Multi-National Corporations perform most of the activities in the headquarters and the
subsidiaries perform only very few value adding activities. Coca Cola producing their main syrup
in the headquarters and a few other locations, bottling, packaging and distribution is done in
other countries. Thus, MNC’s should identify what are the core activities which give them
competitive advantage and need to focus more on such core activities. Non-core activities which
do not add value to the end customer can be given to a third party.

Explain the operations of a renowned MNC (Example; Coca Cola, Apple etc.) using the value chain
analysis introduced by Michael Porter. (Total Marks - 50 marks)

Question 02

‘Organizations can use different strategies when introducing the product to the international
market’. Explain this statement using real world examples. (Total Marks - 50 marks)

Question 03

a. Germany has 10% inflation and Australia has 4% inflation. If the spot exchange rate is
EURO/AUD = 120, then what will be the forward rate in 5 years’ time? (10 marks)
b. Kathran is a company based in United States and it imports cloth from Sri Lanka. On 1st of
February 2020 they purchased clothes worth 30,000 USD that is to be settled after 4 months.
On 01st of February 2020 the exchange rate was 1 USD = 190 LKR and on 01 st of June 2020
the exchange rate (USD/LKR) was 200. Calculate the rupee value change that incurred for the
clothes purchased as at 01st of February 2020 and 01st of June 2020. (25 marks)
c. The inflation rate of Sri Lanka stands at 12% whereas the exchange rate (USD/LKR) which is
expected after 8 years is at 180. The spot rate is 1 USD = 190 LKR. Calculate the going inflation
rate of in America. (15 marks)

(Total Marks -50 Marks)

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Question 04

“Foreign Exchange Transactions are associated with various types of risks”. Do you agree with
this statement? Explain. (Total Marks - 50 marks)

Question 05

a. Explain the trade theory introduced by Eli Heckscher and Bertil Ohlin. (20 marks)
b. There are 2 products; T-shirts and Toys produced by India and Germany. India produces 80
units of T-shirts and 16 units of Toys whereas Germany produces 8 units of Toys and 16 units
of T-shirts. In order to produce each unit of T-shirts and Toys each country allocates 01 unit
of labor.
I. Identify which country has the absolute advantage and explain what you mean by
absolute advantage. (05 marks)
II. Identify which country has the comparative advantage and interpret your answer.
(05 marks)
c. “Expatriate Failure would create a cost for the organization”. Do you agree with this
statement? Discuss. (20 Marks)
(Total Marks-50 Marks)

Question 06

Products can be introduced to the international market using different strategies. Explain the two
different strategies using real-world examples. (50 Marks)

Question 07

‘Globalization has acted as a driving force for the establishment of Multinational Corporations’.
Do you agree with this statement? Justify your answer. (50 marks)

-END OF THE PAPER-

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