Avatto>>UGC NET Management>>PREVIOUS YEAR SOLVED PAPERS>>UGC NET Management December 2019

27. The strategic issues to which a retailing firm has to respond are:
(a) Location decisions
(b) Brand building decisions
(c) Merchandise mix decisions
(d) Target market selection
Which of the following option is correct?

  • Option : D
  • Explanation : Strategic Issues in Retailing: To enter retailing is easy and still easier to fail. To survive and be successful in retailing needs catering to customers. Their costs and profits depend on their type of operation, product lines, and level of service. Personal consumers make purchases for a variety of reasons. Sometimes the reasons seem to be obvious, and at times seem to be non-rational, vague and maybe just social or psychological in nature, such as to escape boredom, to socialize, to kill time, or to learn if there is anything interesting or new. Retailers particularly consider target market and retail store location; merchandise variety and assortment; store image and atmospherics; services, price level, and promotion.
    Strategic Decisions in Retail: Having understood the difference between retail and “wholesale”, let us now focus on the strategic issues which a retailing firm has to necessarily respond to. These include:
    (a) Location Decision
    (b) Target Market Selection
    (c) Business Model
    (d) Merchandise Mix
    (e) Positioning the Retail store.
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28. Which of the following fully capture foreign exchange risk exposure of a manufacturing enterprise?
(a) Transaction exposure
(b) Economic exposure
(c) Translation exposure
(d) Currency exposure
Choose the correct option:

  • Option :
  • Explanation : An asset denominated or valued in terms of foreign-currency cash flows will lose value if that foreign currency declines in value. It can be said that such an asset is exposed to exchange rate risk. However, this possible the decline in asset value may be offset by the the decline in value of any liability that is also denominated or valued in terms of that foreign currency. Thus, a firm would normally be interested in its net exposed position (exposed assets—exposed liabilities) for each period in each currency.
    Although expected changes in exchange rates can often be included in the cost-benefit analysis relating to such transactions, in most cases, there is an unexpected component in exchange rate changes and often the cost-benefit analysis for such transactions does not fully capture even the expected change in the exchange rate. For example, price increases for the foreign operations of many MNCs often have to be less than those necessary to fully offset the exchange rate changes, owing to the competitive pressures generated by local businesses.
    Three measures of foreign exchange exposure are translation exposure, transaction exposure, and economic exposure. Translation exposure arises because the foreign operations of MNCs have accounting statements denominated in the local currency of the country in which the operation is located. For U.S. MNCs, the reporting currency for its consolidated financial statements are the dollar, so the assets, liabilities, revenues, and expenses of the foreign operations must be translated into dollars. International transactions often require a payment to be made or received in foreign currency in the future, so these transactions are exposed to exchange rate risk. Economic exposure exists over the long term because the value of future cash flows in the reporting currency (that is, the dollar) from foreign operations is exposed to exchange rate risk. Indeed, the whole stream of future cash flows is exposed.
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29. Match List-I with List-II:

List-I (Theories of International Trade)List-II (Propounder(s))
(a) Theory of Absolute Advantage(i) Raymond Vernon
(b) Factor Proportion Theory(ii) Steffan Linder
(c) Country Similarity Theory(iii) Heckscher Ohlin
(d) Product Life Cycle Theory(iv) Adam Smith
Choose the correct option from the given below:

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30. Concept testing, test marketing, and product testing are parts of which of the following?

  • Option : C
  • Explanation : Testing the Product: It is at this stage of product testing that the new product manager can check the feasibility and accuracy of product performance. Thus, commercial experiments are necessary to verify earlier business judgments. The objective of this the stage is to assess whether the product meets the technical and commercial specifications developed at various levels of concept development for ascertaining product acceptability. There are three types of tests conducted at this stage as mentioned below:
    Concept Testing
    Product Prototype Testing
    Test Marketing.
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