International Business Final Summer 2026 Question Paper

1. a) Explain the major functions of the foreign exchange market and show how the Law of One Price contributes to the determination of exchange rates in an open economy. [CLO 1, Level II] (8 Marks) b) Outline the potential pitfalls of exporting and importing showing the strategies that firms can adopt to mitigate these challenges in international markets. [CLO 1, Level II] (7 Marks) 2. a) A multinational apparel company wants to strengthen its competitive position in international markets. Apply Porter's value chain framework to identify how the company can improve its primary and support activities to create greater customer value and competitive advantage. [CLO 2, Level III] (8 Marks) b) A domestic firm seeks to overcome limited growth opportunities at home by expanding internationally. Apply the concepts of global expansion, profitability, and profit growth to plan how the firm can use international markets to achieve sustainable financial growth. [CLO 2, Level III] (7 Marks) 3. TechNova Solutions, a South Korean IT company, has recently secured a major contract to develop and maintain a cloud-based enterprise software platform for a rapidly growing multinational corporation. To meet the project deadline and maintain service quality, the company is considering two alternatives for its software development operations: i) Make/In-house: Develop the software entirely using its own team of programmers and IT specialists, providing greater control over quality, data security, and project management but requiring substantial investment in employees, infrastructure, and time. ii) Outsource: Outsource part of the software development to a specialized IT service provider in another country, which could reduce costs and accelerate project completion but may create challenges related to quality control, data security, communication, and dependence on an external provider. As an operations manager of TechNova Solutions, analyze whether the company should develop the software in-house or outsource the development to an external IT service provider. [CLO 3, Level IV] (10 Marks)