National Institute of Technology 2009-1st Sem M.B.A International Business IV Sem - - Question Paper

a different ques. is whether outsourcing production causes wages to decline in the home country. Anecdotal evidence suggests it does. For example call handlers salaries are 85 to 95% lower in India, total operating costs in India are 35% lower than in the UK. Consequently British unions attack on declining wage levels in the UK’s 3500 call centers met the warning that British operators must improve their service quality or else loose their jobs. In contrast evidence suggests that moving jobs to over wage countries increases the overall home country demand and wages for labor.

MNCs can use the cost savings that outcome from producing abroad to lower prices that in turn generate more demand, for example Nike uses inexpensive overseas labor to make its shoes and increases demand. Nike needs higher skilled and higher paid managerial personnel in the US.

Q: four (B) How are product decisions made in International business?

Ans:

The product decisions are made in international business using these polices which are discussed in details as follows:

1) production orientation with orientation companies focus primarily on production either or high quality with little emphasis on marketing, there is little emphasis on marketing, there is little analysis of customer want lower process or higher quality. Although this approach has largely gone out of vague, it is used internationally for certain cases including
a. Commodity sales, especially those for which there is little need or possibility of product differentiation by country.
b. Passive experts particularly those that serve to decrease surpluses with in the domestic market,
c. Foreign market segments or niches that may resemble the market at which the product is aimed initially

2) Sales orientation: internationally sales orientation means company tries to sell abroad what it can sell domestically on the assumption that consumers are sufficiently similar globally. A company may make this assumption because of its ethnocentricity or because it lacks sufficient info about the foreign market,
3) Customer orientation: sometimes a company wants to penetrate markets in a provided country because of the country’s, general potential proximity to home operations, currency or political stability, or any of a host of the reasons. In the extreme of this approach a company would move to products completely unrelated to its existing product lines.
4) Strategic marketing Orientation: Most companies committed to continuous rather than Sporadic foreign sales adopt a strategy that combines production, sales and customer orientations. Companies that don’t makes modifications to accommodate the needs of foreign markets may lose too many sales especially if aggressive competitors are willing to make desired adaptations.

Earning:   Approval pending.