Section A: Reading and Writing
Suggested time for all of section A: 60 minutes
Part 1 (10 marks)
Note Completion. Read the case study about Proctor and Gamble and complete the following notes. Write NO MORE THAN FOUR WORDS for each answer (1 mark for each correct answer)
| 1a
| Changing consumer needs |
| 1b
| Need to restructure the organization |
| 1c
| Private brands |
| 1d
| Taking legal action |
| 1e
| Beauty products |
| 1f
| Identifying customer needs |
Business Vocabulary: Identify two-word or three-word business terms in the text which match the definitions (1 mark for each correct answer)
| 1g
| Business policies and principles |
| 1h
| Globalization |
| 1i
| Organization structure |
| 1j
| Competing goods and services |
Part 2: Short answer writing. Answer both questions (20 marks each)
- (i) The part of paragraph 1 where the writer has briefly described Figure 1 has been removed. Write the missing text in your answer booklet to summarise the main features of the bar (write no more than 40 words)
| By identifying consumer needs, A.G Lafley was able to come up with products that satisfy consumer interest. On implementing market strategy, though there was a slight latency in the initiative, an exponential increase in earnings was later realized
|
(ii) The part of paragraph 2, where the writer has briefly described Figure 2 has been removed. Write the missing text in your answer booklet to summarise the main features of the pie chart. (write no more than 40 words)
|
The need to maximize on diversification and have a higher market share, products acquisition brought about a significant generation in net earnings with household, health, beauty and baby and family products contributing much significantly to the earnings in respect to individual business units, pets, coffee and batteries didn’t contribute much consideration to the total net earnings.
|
- In your own words write a short summary (50 to 100 words) describing Proctor and Gamble’s strategy of targeting emerging economies.
| The change in corporate strategy has resulted in a significant focus on exploiting and developing economies. It has been established to the realization that not only developed countries offer more fabulous markets to the paid consumer goods. In an attempt to increase market diversification, emerging economies with small numbers but wealthy prospective customers are a fantastic, more fabulous idea to increase product sales. These markets with such growth potential include China and India
|
Section B: Writing (50 marks)
Suggested time: 60 minutes
Write an essay of between 400-600 words on the title below.
Discuss the challenges and opportunities faced by companies when doing business in emerging economies with reference to two specific organisations.
Do NOT use Proctor and Gamble as one of your example organisations.
| Challenges facing companies when doing business in an emerging economy
Uncertainty about the future- being able to predict customer trends, market trends, and many more, it is vital to a changing economic climate; it calls for the need to bring in consistently trained in foreseeing trends that can calumniate a bright future.
Lack of infrastructure – Many emerging countries have well established local distribution systems, like India and China. Malaysia China and Russia perhaps are the only two countries lacking a fully developed distribution system.
Environmental Issues – sustainability is the key issue in which striving to balance economic growth with environmental management is very critical nowadays. Besides, poverty can only be eliminated without ecological destruction. Furthermore, environmental regulations have to be adhered to.
Ethical issues – undoubtedly, moral, bribery, and corruption are a reality in many emerging economies. It is noticed that the perception of corruption is culturally relative and socially conditioned.
Economy of China
China was the fastest-growing country in East Asia since the beginning of economic reform in 1978. It has become the “world’s factory,” the primary supplier of inexpensive light manufactured goods based on its low real wage rate.
Trade, investment, and Migration Chinese export is characterized by relatively low domestic value-added content, estimated to be 30% for all commodities and 20% to all shipping to the U.S. Thus, a 10% revaluation of the renminbi will result in only a 2% increase in the cost of Chinese exports to the U.S.
A significant number of Chinese international trade consists of trade in raw materials, intermediate input “semi-finished goods and services” rather than finished.
The Macro-economic situation The Chinese economy had the rate of growth of real GDP for 2014 as 9.5%.the rate of inflation may be estimated to be 3.9% for the same period. There has been an increase of princes of certain manufactured products such as cement and steel.
Political Factors- The stability of the political and economical environments is the key element to influence the decision of an investor.
Legal and institution issue- Reflects the general attitude of a lost county towards foreign investment. For a long time, there is a poorly developed legal and institutional environment in the emerging market.
Opportunities Increased demand for new kinds of goods- consumers are sometimes interested in purchasing luxury goods previously unavailable in the region. Additionally, the scarcity of your product or services makes you be a sole provider, and customers have no alternatives to choose from.
Establishing a brand and Eliminating Competition- the newly exploded economy may be virgin territory for the goods and services you provide, when you are a sole provider in the market, you can focus on building your brand and make the company more important in the economy that is emerging.
Becoming part of a growing infrastructure When your small business expands, you can determine the kind of infrastructure that your business will thrive in; you can increase capacity and quality of roads, power plants, etc., that will consequently impact positively on your business.
Prestige Business in Emerging Markets
You gain prestige when you can tell domestic customers that you have stretched to an emerging economy as many customers and fellow business people enjoy working with the small business whose reach extends abroad.
|