International Business Environment Questions

Instructions to candidates: a)Time allowed: Three hours (plus an extra ten minutes’ reading time at the start – do not write anything during this time) b)Answer any THREE questions c)All questions carry equal marks. Marks for each question are shown in [ ]

1.In December 2012 the merger of Glencore and Xstrata was approved by shareholders creating an $80bn global mining giant. Discuss the benefits that the two companies might hope to gain by merging.[33]

2.In March of this year Virgin Airlines was reported to be facing record annual losses of £135m due to rising costs and competition. What action can a company in this position take to restore its competitive position?[33]

3.In March the European Union was reported to be drawing up a plan to give shareholders in companies powers to block excessive pay deals for senior staff. Should a body such as the European Union intervene in the running of companies in this way? Explain your answer.[33]

4.The UK telecoms giant Vodafone was reported earlier this year to be on the verge of leaving the US market by selling its American assets in an £88bn deal. What problems might a company such as Vodafone face in developing a successful overseas business in the US?[33]

5.In April this year the UK Government was considering a number of options for enlarging airport capacity in its capital, London. Discuss the impact on UK businesses of a decision to increase airport capacity.[33]

6.In March this year Mulberry was reported to be struggling to achieve its goal of joining the elite group of luxury brands including Prada, Hermès and Louis Vuitton. What action should a company wishing to create an elite brand such as this take to achieve its objective?[33]

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