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No. of questions: 05
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University of Sri Jayovardenepura

Faculty of Management Studies and Commerce
Department of Business Administration

B. Com (Special) Degree/B.Sc. Operations and Technology Management (Special) Degree

Year III Semester II - End Semester Examination - October 2019

BUS 3345 International Business Management

Time allowed: Three (03) Hours

Instructions:
• This paper consists of two (02) parts. Part I is compulsory and you are required tfo select
only three (03) questions from Part II. Altogether four (04) questions should be
answered.
• Handwriting should be clear and legible.

Parti
Question No: 01

Wal-Mart in China

Wal-Mart began the groundwork for its Chinese operations in 1994 when it sent a team of
executives to China. It started its actual operations in China in August 1996 at Shenzen with the
I opening of its first Super Centre and Sam's Club irr partnership with Shenzhen International
Credit Investment Company.

To maintain its practice of Everyday Low Price (EDLP), Wal-Mart adopted a three-pronged
approach in China. First, it focused on increasing local procurement thus reducing procurement
costs. Second, it maintained satisfactory supplier relationship during its initial yearg by paying
suppliers within 3-7 days. Third, it established modem commodity distribution centers and
computerized its management to improve efficiency and reduce cost.

Unlike Chinese companies, at Wal-Mart, associates found a high degree of transparency in

I relation to career growth. All new employees went through three months training at Shenzhen.
Wal-Mart valued an individual's competence rather than personal connections when promoting an
employee.

According to a report by People's Daily Online, Du Limin who started her career as an ordinary
checkout person at Wal-Mart, became general manager of a Sam's Club in Shenzhen in just two

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 years. In 2003, Wal-Mart figured among the 15 most popular foreign employers in China in a
survey of university students conducted by ChinaHR.com one of the leading online recruitment
websites in China. Wal-Mart suppliers also underwent "standards training." As per Wal-Mart
standards, suppliers were not allowed to have a work-week of more than 40 hours. Wal-Mart also *
restricted overtime to three hours per day and emphasized that safety requirements were met, and
satisfactory accommodation was provided to the workers

Wal-Mart's Chinese operations have had their share of problems. The company's supply chain
operations were not as efficient as in its home market. In addition, there was stiff competition
from both local Chinese retailers and from foreign retailers who had established their base in
China. Thus, even after nine years of presence in China, Wal-Mart was still very small with just
48 stores. Its 2004 sales from the Chinese operations were $940 million which was around 2% of
its international sales and a miniscule portion of its total sales of $256.3 billion.

Wal-Mart had long been criticized for its slow international expansion. Analysts pointed out that
its nearest rival, Carrefour, had gained a lot of ground due to rapid expansion in international }

markets. ITie same applied to China as well. Experts pointed out that Carrefour had been
successful in China because it had been able to study Chinese consumers through its venture in
Taiwan, while Wal-Mart did not have any such experiential advantage. Also, Wal-Mart did not
V

make use of its first mover advantage and expanded slowly in China. S

Adapted from: http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Wal-

Mart%20China%2QBusiness%20Strategy.html

Based on the above case study answer the following questions.

a) “Specific tactics were implemented by Wal-Mart to keep with their practice of Everyday
Low Price (EDLP)”. Discuss this statement referring to different characteristics of a
distribution system. (10 Marks)

b) “^Val-Mart had long been criticized for its* slow international expansion”. Based on the
above Statement explain what actions Wal-Mart should have taken to increase the
international expansion. (10 Marks)

c) Wal-Mart human resource management strategies helped the organization to recognize as

one the leading employers in China. Identify and explain their staffing policy and actions
they have taken to maintain that policy. (10 Marks)

d) “Wal-Mart did not make the use of its’ first mover advantage”. Discuss the implications of
being the first mover to a foreign country. (10 Marks)
(Total 40 Marks)

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 Part II

Question No. 02

a. “Sri Lanka as a developing country has positive and negative consequences from
globalizations. However, organizations have a tendency to engage in global business
activities”. Discuss the above statement. (10 Marks)

b. “Free trade will improve the living standards of people in the world". Discuss the
statement by referring the international trade theories. (10 Marks)
(Total 20 Marks)

Question No. 03

a. Discuss the impact of Indu Sri Lanka Free Trade Agreement (ISFTA) on Sri Lankan
economy. Do you think that Sri Lankan economy able to produce the promised benefits of
ISFTA to the country? (10 Marks)

b. Discuss how “cross culture literacy” promote the growth of the international business.
(10 Marks)
(Total 20 Marks)
Question No. 04

a. Sustaining a competitive advantage is more difficult for an international organization.

Identify and explain how organizations can sustain the competitive advantages.
(10 Marks)

b. “Global standardized advertising is making benefits for any company which engage in
international business”. Critically discuss the statement. (10 Marks)
\
(Total 20 Marks)

Question No.OS

a. Managing expatriates has become a crucial issue for a multinational enterprise since the
rate of expatriate failure is high. Discuss the strategies available for multinational
enterprises to better manage their expatriate managers. (10 Marks)

b. “Good governance and international trade do not have a direct relationship. However,
without good governance, international trade of a country will not thrive”. Elaborate the
above statement. (10 Marks)
(Total 20 Marks)

***** End of the Paper *****

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