KSLU Solved Question Papers
International Business
Previous Year Question Paper with Solution
B.Com. LL.B. (Five Years) · Sem 4
2022 Oct Examination
munotes.in
Mumbai
B.Com. LL.B. (Five Years) Sem 4 International Business 2022 Oct Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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Model answers written and edited by the munotes.in editorial desk.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2022 Oct examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2022 Oct examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2022 Oct examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 80 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all five Units. (2) One essay type question and short note/problem compulsory from each Unit. (3) Figures to the right indicate marks. (4) Answer should be written either in English or Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)What are the different modes of entry into International trade ?[10]
Answer
For full marks, cover: what an entry mode (or entry strategy) is; the three groups of modes; exporting (indirect and direct), licensing, franchising, contract manufacturing, management contracts and turnkey projects, joint ventures, wholly owned subsidiaries, mergers and acquisitions, strategic alliances and e-commerce, each with its merits and demerits; a comparison table; the factors that decide the choice; and a conclusion.
Meaning of a mode of entry
A mode of entry is the method a firm uses to take its products, technology, skills or capital into a foreign market. It is also called an entry strategy. The choice matters because each mode gives the firm a different level of control, cost, risk and profit. A firm often begins with a low-risk mode and moves to a higher-commitment mode as it gains experience.
The modes fall into three groups:
- Trade (export) modes, where goods are made at home and sold abroad.
- Contractual modes, where the firm earns from its know-how, brand or skills under a contract with a foreign party.
- Investment modes, where the firm puts its own capital into the foreign country.
Trade modes
- Indirect exporting. The firm sells through a home-country middleman, such as an export house, a merchant exporter or a trading company. It needs little money or knowledge of the foreign market. However, it earns a smaller margin and learns little about foreign customers.
- Direct exporting. The firm itself finds foreign buyers, often through its own export department, foreign agents or distributors. It keeps more profit and control. It must, however, handle documents, payments, freight and foreign rules itself.
Contractual modes
- Licensing. The firm (the licensor) allows a foreign firm (the licensee) to use its patent, trademark, design or process in return for a royalty or fee. It needs very little investment. The risk is that the licensee may become a competitor once it learns the technology.
- Franchising. The franchisor gives a foreign franchisee the right to run a business under its brand and system, and supplies training and standards. It suits fast food, hotels and retail. Growth is quick, but poor service by one franchisee can harm the whole brand.
- Contract manufacturing. The firm hires a foreign manufacturer to make its products, while it keeps control of design and marketing. Costs fall and no factory is needed abroad. Quality control and the leakage of designs are the main risks.
- Management contracts. The firm supplies managers and systems to run a foreign business, such as a hotel or an airport, for a fee. It earns from skills alone but has no ownership.
- Turnkey projects. The firm designs and builds a complete plant, such as a power station, and hands it over ready to operate. It earns large contract income. The buyer may later use the plant to compete with the firm.
Investment modes
- Joint venture. Two or more firms, often one local and one foreign, jointly own a new company. The local partner brings knowledge of the market, the law and the government. The partners share the risk. Disputes over control, profits and strategy are common.
- Wholly owned subsidiary. The firm owns 100 per cent of a foreign company. It may build a new unit (a greenfield investment) or buy an existing one. It has full control and keeps all profits. It also bears all the cost and risk. In India, most sectors now allow 100 per cent foreign direct investment under the automatic route.
- Mergers and acquisitions. The firm buys or merges with a foreign company. This gives instant access to its customers, brands, plants and staff. The price may be high, and merging two corporate cultures is difficult.
- Strategic alliance. Firms cooperate on a project, such as joint research or shared distribution, without forming a new company. It is flexible and cheap, but each partner may protect its own interest first.
Other modes
- E-commerce exports. A firm can sell directly to foreign buyers through online platforms. India's Foreign Trade Policy 2023 raised the value limit for each e-commerce export consignment sent by courier from Rs 5 lakh to Rs 10 lakh.
- Counter-trade. Goods are exchanged for goods, wholly or partly, when the buyer lacks foreign exchange.
Comparison of the main modes
| Mode | Investment needed | Control | Risk | Profit potential |
|---|---|---|---|---|
| Indirect exporting | Very low | Very low | Low | Low |
| Direct exporting | Low | Medium | Medium | Medium |
| Licensing and franchising | Very low | Low | Low (but may create a rival) | Low, through royalties |
| Contract manufacturing | Low | Medium | Medium | Medium |
| Joint venture | High, shared | Shared | Shared | Shared |
| Wholly owned subsidiary | Very high | Full | High | Full |
| Acquisition | Very high | Full | High | Full, after integration |
Factors that decide the choice of mode
- The firm's resources. A small firm with little capital usually starts with exporting or licensing.
- The need for control. A firm with valuable technology or a strong brand prefers a subsidiary to protect it.
- The size and growth of the market. A large, growing market justifies investment.
- Political and economic risk. In an unstable country, a low-commitment mode limits the money at risk.
- Government rules. Tariffs may push a firm to produce locally. Foreign investment limits may force a joint venture.
- Cultural distance. Where the culture is very different, a local partner is useful.
- The speed required. An acquisition is the fastest way to gain a large market share.
Conclusion. At one end of the range is exporting, which needs little money and gives little control. At the other end are wholly owned subsidiaries and acquisitions, which need heavy investment but give full control. Licensing, franchising, contract manufacturing, joint ventures and alliances lie in between. No single mode is the best. The right one matches the firm's resources and need for control with the size, risk and rules of the market it wants to enter.
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