4MBS301 International Business Strategy

Semester Two Examination, 1999-2000
 
Mean
48.3
Std deviation
9.485
<35
6%
35-40*
10%
Third
40%
Lower second
32%
Upper second
13%
First
0%

*All these students passed the module, as their coursework grades compensated for their marginal failure in the examination

The average grade of just over 48 was disappointing, but the low failure rate of 6% showed that most students had at least a basic grasp of the subject.

  1. What were the crucial strategic decisions that enabled Amazon.com to obtain an early leadership position in the on-line retailing of books, and why were they important? How easy has it been for Bertelsmann to imitate Amazon’s strategy?
    2. (40 marks)
    This first question, on business strategy, was soundly answered. Most students showed a solid appreciation of key concepts such as distinctive sources of competitive advantage. More use could have been made of the value chain to home in on precisely what Amazon was doing right. More attention could also have been given to assessing how sustainable the advantage was.

    Too many answers, however, skimmed over the second part of the question, which was an invitation to compare Amazon.com’s and Bertelsmann’s resources and examine precisely how Bertelsmann had found ways to get round Amazon’s 3-year head start in on-line retailing. The best answers did this very well, but too many efforts lacked precision and detail.
     

  2. Amazon.com has a strong culture. How well adapted is that culture to the particular demands of on-line book retailing in the German market, and why? What problems might Amazon face if it tried to change the culture of its German operation?
    3. (25 marks)


    The second question on corporate culture and barriers to change, was very poorly answered (and in many cases not answered at all). Students had been warned on several occasions that the exam was likely to feature points from the latter half of the syllabus. However, attendance levels fell sharply in the period after Easter, when the topics relevant to this question were covered, and it was plain that few students had done any reading to compensate. In fact, a distressingly large number of students obviously had no idea what corporate culture was, and confused a change in the culture with a change in the strategy.

    A good answer to this question would have used the cultural web and/or the Goffee-Jones matrix to assess the peculiar features of Amazon’s culture. It would then have looked at the distinctive competitive environment of on-line retailing in Germany and assessed whether Amazon’s rather driven American culture was likely to generate as much success there as it had in the US. Finally, it would have looked at the key stakeholders in Amazon and seen how they might have reacted to, or resisted, any attempts to adapt the culture for the German business environment.
     

  3. What are the main environmental changes that are likely to affect the business of book retailing in Germany? Describe three alternative strategic options that Bol might consider for responding to those changes. Which of those alternatives would you recommend, and why?
(35 marks)
 The third question attracted a mixed bag of answers. Most students were able to identify the relevant environmental issues that the firm needed to address, and indeed to show what impact they would have upon the business. Quite a number could put together coherent suggestions as to how to address those issues. However, very few students seemed to absorb the import of the final part of the question – that they needed to evaluate the different options and come up with a reasoned recommendation (this had been covered at length in the lectures).