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General Instructions – PLEASE READ THEM CAREFULLY The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.Assignments submitted through email will not be accepted.Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.Students must mention question number clearly in their answer.Late submission will NOT be accepted.Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). Submissions without this cover page will NOT be accepted
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المملكة العربية السعودية
وزارة التعليم
الجامعة السعودية اإللكترونية
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 3
Introduction to International Business (MGT-321)
Due Date: 28/12/2023@ 23:59
Course Name: Introduction to International
economics
Course Code: MGT-321
Student’s Name:
Semester: second
CRN:
Student’s ID Number:
Academic Year:2022-23-1st
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Marks Obtained/Out of 15
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
•
•
•
•
•
•
•
•
The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Learning Outcomes:
1. Identify and evaluate the significant trade agreements affecting global
commerce (Lo 1.1)
2. Analyze the effects of culture, politics and economic systems in the context of
international business
(Lo
2.1)
3. Explain the forces driving and evaluating the impact of globalization (Lo 1.3)
4. Carryout effective self-evaluation through discussing economic systems in the
international business context (Lo 3.1)
Discussion Questions
1. What is the World Trade Organization? What is its role in the world
economy? (minimum words: 400, marks:2)
2. What is the International Monetary Fund? Discuss its relationship with the
World Bank.
(minimum words: 500,
marks: 3)
Case study
Please read Case 1: “Globalization of BMW, Rolls-Royce, and the MINI”
available in your e-book (International business: Competing in the global
marketplace (13th ed.), at page no.625, and answer the following questions:
Assignment Question(s):
3. How do you think BMW integrates its various unique brands into a global
effort that works for them (BMW, Rolls-Royce, and the MINI) across the
world’s many global markets?
(minimum
words:
400, marks: 2)
4. What is your reaction to the global brand of BMW when you hear its name,
think of the brand, and see BMW vehicles on the road?
words: 400, marks: 2)
(minimum
5. Rolls-Royce’s chase of perfection drives the supreme quality, exquisite hand
craftsmanship, and attention to the finest detail to maintain its global
position as the pinnacle luxury automobile manufacturer in the world. How
do you think the Rolls-Royce brand helps, or hurts, other BMW brands
globally (i.e., BMW, the MINI)? Give arguments in support of your answer.
(minimum words: 500, marks: 3)
6. The MINI is a unique car offering in the BMW portfolio. It has long-engaged
in clever solutions and distinctive designs that have enabled terrific urban
driving and have catered to customers’ individual needs. Do you agree that
this is the focus for the MINI, and do you think it is working as advertised
globally? Discuss.
(minimum words: 500, marks: 3)
Answers
Answer1. The World Trade Organization (WTO) was established in 1995 as a govern the
organization and operation of international trade. WTO was founded in 1995 to
replace the General Agreement on Tariffs and Trade (GATT), which had existe
during the second world war. The international trading system that the WTO
inherited from the GATT has been in force for over 70 years, despite the WTO’s
relatively brief existence (World Trade Organization, 2022).
Global trade has exploded in the last seventy years. The average yearly
growth rate of exports is now at 6%. The expansion of commerce has been a
major factor in the rise of the global economy, growing at an average rate of 1.5
times the economy’s growth as a whole. For example, there was an increase of
almost 2500% in exports from 1948 to 2019 (Koopman et al, 2020). In no small
part due to the GATT and the WTO, a prosperous trade system has been
developed, resulting in unprecedented growth.
The arrangement was the result of rounds of negotiations at the GATT.
Although tariff reductions were initially the talks’ primary focus, anti-dumping
and non-tariff measures were explored later. After that, the conversation carried
on. In 1997, 69 countries reached a deal on liberalizing telecommunications
services beyond the Uruguay Round. In the same year, forty governments reached
an agreement to eliminate tariffs on information technology products, while
seventy nations reached a deal to reduce taxes on ninety-five percent of
international banking transactions. In the year 2000, talks between the agricultural
sector and the service sector were renewed.
WTO developed a work plan with its nmain focus on Agricultural
products, the establishment of open operation in economies and other issues
affecting world developing economies. WTO rules updates stem from debates on
these and related issues (Soobramenien et al., 2019). For instance, it was
estimated that the original Government Procurement Agreement’s yearly coverage
would increase by US$ 100 billion after amendments were adopted at the 8th
Ministerial Conference of the World Trade Organization in 2011.
Aiming to streamline trade processes and shorten the time it takes to clear
goods at borders, WTO members ratified the Agreement on Trade Facilitation of
2013. Upon full implementation, this Agreement will reduce trade costs by more
than 14% and raise world exports by as much as US$ 1 trillion annually, making
it the first international deal agreed upon at the WTO.
With the revisions made at the 10th Ministerial Conference in Nairobi in
2015, tariffs on an additional 200 IT items with a combined years worth of around
US$ 1.3 trillion were removed. The Conference’s elimination of export subsidies
for agriculture also helped the UN get closer to its “Zero hunger” Sustainable
Development Goal. The amendment of the WTO’s Intellectual Property
Agreement in 2017 has also made it simpler for developing countries to access
affordable medical treatments. The Agreement on Trade Facilitation was also put
into effect that same year.
2. AnswerThe World Trade Organization and the International Monetary Fund work
together on several fronts to achieve this goal of more uniform economic policy
implementation worldwide. A cooperation agreement defining many areas of their
alliance was inked shortly after the WTO was created.
The IMF can engage with the WTO regularly. It is thanks to its status as
an observer in some WTO organizations and its invitation to participate in WTO
committees and working groups (Edwards, 2018). In addition, the IMF’s
Executive Board and Board Committee on Liaison with the World Bank and other
International Organizations periodically invite representatives from the World
Trade Organization Secretariat to discuss issues of mutual concern. Therefore,
when macro-critical trade difficulties develop, they can be addressed within the
context of IMF-supported initiatives. For example, such problems may arise
during fund surveillance efforts. Similarly, the World Trade Organization relies
heavily on IMF monitoring reports to assess member nations’ trade policies.
Currency
arrangements,
the
balance
of
payments,
and
reserve
requirements are all areas in which the WTO requires consultation with the IMF.
During times of crisis, such as a balance of payments crisis, this sort of
Agreement permits countries to impose trade restrictions. IMF evaluations of
members’ balance of payments situations form the basis for the WTO’s Balance of
Payments Committee’s assessment of conditions.
Members of the WTO Secretariat and the International Monetary Fund
meet informally to discuss trade policy, global economic events, and individual
country recommendations. During these talks, top officials from the IMF and the
WTO traveled to other institutions to exchange ideas and perspectives on issues of
mutual concern. In addition, the World Bank, the IMF, and the WCO gather to
debate the global trade economy. The World Trade Organization hosted the 2019
edition of the International Monetary Fund/World Bank/WTO Joint Trade
Workshop in June. In December 2011, the first one occurred.
3. AnswerCustomers with value, opulence, and performance in their lives typically
acquire BMW automobiles. BMW is built around its most reliable components,
which combine to produce a high-quality car. These components include series 37, which impact the international system market. Furthermore, the BMW brand
exudes vitality, contributing to the vehicle’s ability to satisfy customer
requirements. As a result, a unique place for the brand has been cultivated inside
the market. In addition, the company has made significant efforts to break into the
luxury automobile market in recent years. The company successfully reached out
to customers in various price ranges thanks to the diverse marketing mix.
The MINI is more affordable than the other two brands, despite its
diminutive size and one-of-a-kind design. Therefore, it is suitable for young
adults who have recently graduated high school and need a specialized vehicle but
do not have the financial means to purchase an extravagant one.BMW is wellknown for being on the cutting edge of technological innovation and focusing on
the premium end of the market. Do not let yourself be shocked if you witness the
automobile driving itself about town. It is perhaps the newest vehicle in the Series
that can drive itself. It’s possible that you’re concerned about how safe the
automobile is. Despite this, the data showed that it is a safer alternative to driving
on your own. It entices many innovation darlings who are enthusiastic about these
new developments
Rolls-Royce is a phenomenally luxurious brand that caters to prominent
people in high society. The Ghost model, the least expensive option, must cost
approximately 6 million Hong Kong dollars (HKD). The three brands are targeted
at separate groups of customers looking for something specific, and they fulfill
the varying criteria of these different groups. In addition, the company reduces
reliance on a single target consumer market by selling products under several
other brand names.
4. AnswerLuxury and speed are the first things that come to mind when I think of
the BMW brand. BMW is known for developing high-end, high-performance
vehicles in the automotive industry. It was initially called Bayerische Motoren
Werke, and Karl Rapp founded it in 1916(Bavarian Motor Works, n.d.). It started
making airplane engines, switched to motorbikes in 1923, and finally settled into
making cars in the 1930s. Production of its first car, the Dixi, began that year. It
was one of the cheapest and tiniest cars the manufacturer had ever made. As time
went on, the business increased its production capacity, allowing it to make cars
with more interior space and horsepower. In the 1950s, it was one of the first
European manufacturers to create a diesel engine, and by 1955, it had become the
first German carmaker to start producing sedans in the United States. Finally,
BMW expanded its line of high-performance sports coupes and convertibles in
the early 1960s, when these body styles were enjoying rising popularity among
the company’s target demographic of young professionals. Because of this
decision, the business could increase its international clientele and prominence in
the industry.
Now more than ever, BMW is a household name everywhere cars are sold.
As one of the world’s leading automakers, it is a household name anywhere its
vehicles are sold. The 7-Series is BMW’s current flagship sedan, a technological
marvel that sets the standard for performance, comfort, and good looks in its
class. SUVs, sports cars, convertibles, coupes, sedans, and more are just some of
the different vehicles available from this manufacturer. Besides producing its cars,
BMW owns the MINI and Rolls-Royce brands and licenses the Mini name for
distribution and sale in more than 60 countries. BMW’s Contract Manufacturing
subsidiary also produces many automobiles for other automakers. In addition, the
company designs, develop, and has components and systems for other companies
looking to create their cars or component systems.
Over the years, BMW has built several unique chassis for highperformance racecars and other specialist vehicles. It has also tested and
developed hydrogen-powered fuel cell systems and hybrid electric car
technologies and has built a portfolio of numerous successful hybrid models. The
company also employs a team of world-class engineers and designers responsible
for designing new and creative features and technologies for the next generation
of BMW automobiles. Throughout the company’s lengthy history, it has remained
to retain its strong dedication to creating innovative technologies that fulfill the
ever-changing needs of its growing customer base. The firm has built its position
as an industry leader and innovator in designing, developing, and manufacturing
high-quality cars and components through its comprehensive research and product
testing procedures. The company continually works to offer its customers the
finest possible products and services and continues to employ a team of highly
talented and motivated people to achieve this goal.
5. AnswerIn recent years, Rolls-Royce has seen sales levels that are unprecedented.
Even though none of the orders are for a “basic” variant, the British automaker is
having trouble keeping up with the demand for the Cullinan. Without the support
of the Bavarian company BMW, which owns Rolls-Royce and oversees its whole
operation, none of this would have been feasible. Rolls-Royce, which is renowned
for its high level of luxury and widespread recognition, may be advantageous to
other BMW products if BMW grants permission for them to use the Rolls-Royce
brand name. Since they were both produced by the same brand, consumers
anticipated they would share similar qualities. In addition, in the same way that
Rolls-Royce, BMW, and MINI each serve a particular clientele, the brand may be
able to meet the needs of clients with a wide range of market preferences and
desires.
6. AnswerThe MINI brand is known for having a high degree of reliability. It comes
in various styles that lean more toward the commercial than the elegant. It
combines inventiveness and creativity with creativity and gives individuals a
platform that is more open for them to express themselves. I believe that MINI is
a feisty brand because of the small and agile automobiles it produces. I think that
minis should put more of their focus on advertising internationally. As mentioned
earlier, I concur that MINI caters to a particular type of customer interested in
more professional catering. Rolls-Royce is currently priced higher than the
offering that MINI, a company that targets consumers in higher socioeconomic
brackets, is making available. The target market was attracted to and pleased by
MINI due to the brand’s distinctive design and delightful driving experience
(newly graduated college students living in cities). As people’s living conditions
improve, we want to be able to enjoy life to the fullest by relying on the various
material conveniences that are now available. The appearance of MINI may start
a trend in the automotive sector. There is little doubt that the MINI brand will be
promoted internationally due to an increase in the number of people purchasing
the vehicle.
References
Bavarian Motor Works. (n.d.). The circuitous history of the BMW name and its rise to a
global brand | BMW.com. Retrieved 26 September 2022, from
https://www.bmw.com/en/automotive-life/BMW-name-meaning-and-history.html
World Trade Organization. (2022, March 11). The WTO Agreements Series – Technical
Barriers to Trade (3rd ed.).
Edwards, M. S. (2018). The IMF, the WTO, and the Politics of Economic Surveillance.
Routledge.
Koopman, R., Hancock, J., Piermartini, R., & Bekkers, E. (2020). The Value of the
WTO. Journal of Policy Modeling, 42(4), 829-849.
Soobramanien, T., Vickers, B., & Enos-Edu, H. (Eds.). (2019). WTO Reform: Reshaping
Global Trade Governance for 21st Century Challenges. Commonwealth
Secretariat.
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