BUS 327 Final MC

A strategy that focuses on increasing the attractiveness of a product is referred to as a (n): A. Differentiation strategy. B. Low cost strategy. C. Effectiveness strategy. D. Efficiency strategy.

A. Differentiation strategy.

____________ strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense. A. Localization B. Transnational C. Global standardization D. International

A. Localization

Which control system is most widely used by small firms? A. Personal B. Output C. Bureaucratic D. Cultural

A. Personal

______________ can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the net profits of the firm by total invested capital. A. Profitability B. Performance C. Cash flow D. Efficiency

A. Profitability

_____ exists when the tastes and preferences of consumers in different nations are similar if not identical. A. Universal needs B. Homogenous needs C. Basic needs D. Bundled needs

A. Universal needs

When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a (n) ______________ strategy. A. global standardization B. localization C. international D. customization

A. global standardization

Logistics is the activity that controls the _____. A. movement of physical materials through the value chain B. customer contact points of a business C. activities involved in creating a product D. information exchange between a business and its customers

A. movement of physical materials through the value chain

Concentration of production is appropriate when _____. A. the product serves universal needs B. the product does not serve universal needs C. the product's value-to-weight ratio is low D. volatility in important exchange rates is expected

A. the product serves universal needs

Which of the following is a distinct advantage of exporting? A.It avoids the often substantial costs of establishing manufacturing operations in the host country B.Benefits from a local partner's knowledge of the host country's competitive conditions C.Avoids the threat of tariff barriers by the host-country government D.Appropriate if lower cost locations for manufacturing the product can be found abroad

A.It avoids the often substantial costs of establishing manufacturing operations in the host country

What is the primary advantage of licensing? A.It helps a firm avoid the development costs associated with opening a foreign market B.It gives a firm the tight control over manufacturing, marketing and strategy C.It helps a firm achieve experience curve and location economies D.It increases a firm's ability to utilize a coordinated strategy

A.It helps a firm avoid the development costs associated with opening a foreign market

Lenovo's ThinkPad laptop computers are designed in the United States; the case, keyboard, and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States. In each case, these components are manufactured and sourced from the optimal location given current factor costs. In this example, Lenovo has: A. Vertical integration advantages. B. A global web of value creation activities. C. Learning effects. D. High local responsiveness.

B. A global web of value creation activities.

The emphasis on local responsiveness in firms pursuing a local responsiveness strategy creates strong pressures for A. Decentralizing all decisions to foreign subsidiaries B. Decentralizing operating decisions to foreign subsidiaries C. Centralizing all operating decisions D. Centralizing all decisions

B. Decentralizing operating decisions to foreign subsidiaries

Regardless of a firm's domestic structure, its international division tends to be organized on A. Product B. Geography C. People D. Economy

B. Geography

Which of the following is a hidden cost associated with basing production in a foreign location? A. Cost of labor within the location B. High employee turnover C. Transportation costs D. Differences in the value of currency

B. High employee turnover

The implied lack of coordination between domestic operations and foreign operations, which are isolated from each other in separate parts of the structural hierarchy is a problem encountered with a(n) A. Global matrix structure B. International division structure C. Worldwide product division structure D. Worldwide area structure

B. International division structure

Which of the following is an advantage of countertrade? A. Countertrade uses instruments such as time draft and sight draft. B. It is an effective way of doing business with developing nations. C. It provides exporters and opportunity to obtain direct revenue. D. Countertrade prevents exchange of unusable or poor-quality goods.

B. It is an effective way of doing business with developing nations.

Which of the following is a drawback of a just-in-time system? A. Transport costs are high when using a just-in-time system. B. It leaves a firm without a buffer stock of inventory. C. It increases the warranty costs associated with products. D. It leaves a firm with high scrap costs associated with defective products.

B. It leaves a firm without a buffer stock of inventory.

A purely domestic capital market faces the problem of _____. A. foreign exchange risk B. limited liquidity C. lack of regulation D. deregulated markets

B. limited liquidity

Vertical integration refers to _____. A. outsourcing production to a low-cost based company B. making all or part of a product in-house C. using multiple suppliers to procure raw materials D. procuring raw materials or products from a single supplier

B. making all or part of a product in-house

The cost of capital is the: A. interest received on investments made by the company. B. price of borrowing money. C. difference between cost of inputs and outputs. D. total value of raw materials that a company uses.

B. price of borrowing money.

The Export-Import Bank _____. A. is an international financial institution that provides loans for capital programs B. provides finance to facilitate trade between United States and other countries C. is an independent agency of the United Nations D. focuses on policies that have an impact on the exchange rate and the balance of payments

B. provides finance to facilitate trade between United States and other countries

An advantage of buying component parts, or even an entire product, from independent suppliers is that _____. A. it can make planning, coordination, and scheduling of adjacent processes easier for the firm B. the firm can maintain its flexibility by switching orders according to circumstances C. the firm will be able to maintain strict control over its proprietary technology D. the firm will have access to superior quality raw materials and will deliver high quality products

B. the firm can maintain its flexibility by switching orders according to circumstances

Control through a system of rules and procedures that directs the actions of subunitsis A.Personal control B.Bureaucratic control C.Output control D.Cultural contro

B.Bureaucratic control

Firms engaging in _____ with a local company can benefit from a local partner'sknowledge of the host country's competitive conditions, culture, language, political systemsand business systems. A.Turnkey projects B.Joint ventures C.Greenfield investments D.Licensing arrangements

B.Joint ventures

A firm's _____ determines where in its hierarchy the decision-making power is concentrated. A.Integrating mechanism B.Vertical differentiation C.Knowledge network D.Horizontal differentiation

B.Vertical differentiation

_____ are sold outside of the borrower's country and are denominated in the currency of the country in which they are issued. A. Micro bonds B. Eurobonds C. Foreign bonds D. Regulatory bonds

C. Foreign bonds

Which of the following is an example of a support activity in a firm's value chain? A. R&D B. Customer service C. Human resources D. Marketing and sales

C. Human resources

Which strategy focuses on increasing profitability by customizing the firm's goods or services so they provide a good match to tastes and preferences in different national markets? A. Global standardization strategy B. Transnational strategy C. Localization strategy D. International strategy

C. Localization strategy

Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as: A. Factor economies. B. Production economies. C. Location economies. D. Value creation economies.

C. Location economies.

Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in A.Politically unstable developing nations that operate with a mixed or command economy B.Nations where there is a dramatic upsurge in either inflation rates or private-sector debt C. Politically stable developed and developing nations that have free market systems D.Developing nations where speculative financial bubbles have led to excess borrowing

C. Politically stable developed and developing nations that have free market systems

Which of the following is a disadvantage of the integration facilitated by technology? A. Segregated international capital markets will emerge as a result of technology. B. Complexity in processing large volumes of data will increase. C. Shocks that occur in one financial center will spread globally. D. Systems integration hinders real-time data transfer across different countries.

C. Shocks that occur in one financial center will spread globally.

An equity loan is made when: A. a corporation pledge equities or other assets to borrow money. B. corporations avail cash loans from individuals. C. a corporation sells stock to investors. D. corporations issue bonds to individual investors.

C. a corporation sells stock to investors.

A Eurocurrency is: A. the currency used by the countries of the European Union. B. the currency formerly used in many European countries before the formation of the European Union and the institution of the euro. C. any currency banked outside of its country of origin. D. any currency banked within a European country.

C. any currency banked outside of its country of origin.

Just-in-time inventory systems _____. A. are used when procurement is not organized B. require large warehouses for storage C. economize on inventory holding costs D. maintain large buffer for inventory

C. economize on inventory holding costs

When an investor purchases a corporate bond, he purchases the right to receive a: A. share of the overall revenues that the company generates. B. part of the title for the assets that the corporate holds. C. specified fixed stream of income from the corporation. D. share of the profits that the company generates through operations.

C. specified fixed stream of income from the corporation.

According to the concept of economies of scale, as plant output expands, _____. A. productivity decline B. total costs decrease C. unit costs decrease D. utilization of capital decline

C. unit costs decrease

Which of the following is an argument favoring centralization? A.It permits greater flexibility B.Motivational research favors it C.It can avoid the duplication of activities D.It gives top management time to focus on critical issues by delegating routine issues to lower-level managers

C.It can avoid the duplication of activities

Which of the following decisions is typically centralized at a firm's headquarters? A. Production decisions B. Human resource management C. Marketing decisions D. Overall firm strategy

D. Overall firm strategy

Which of the following statements is true of products with high value-to-weight ratios? A. Transportation costs usually account for a large percentage of their total costs. B. They are relatively inexpensive and weigh a lot. C. They are usually produced in multiple locations close to major markets. D. Their transportation account for a very small percentage of the total costs.

D. Their transportation account for a very small percentage of the total costs.

An important drawback of a purely domestic capital market is that the: A. investment does not receive protection from governments. B. investments are riskier than in global capital markets. C. market lacks a strong regulatory mechanism. D. cost of capital tends to be higher than it is in a global market.

D. cost of capital tends to be higher than it is in a global market.

As investors increase the number of stocks in their portfolio, the portfolio's risk: A. increases initially and declines later. B. declines slowly and steadily. C. increases exponentially. D. declines rapidly in the beginning.

D. declines rapidly in the beginning.

A firm that is facing both strong cost pressures and strong pressures for local responsiveness should follow a (n) ___________ strategy. A. localization B. global standardization C. international D. transnational

D. transnational

Decentralization of production is appropriate when _____. A. a product's value-to-weight ratio is high B. the product serves universal needs C. barriers to trade are low D. volatility in key exchange rates is expected

D. volatility in key exchange rates is expected

In the classic global matrix structure, horizontal differentiation proceeds along two dimensions. These dimensions are A.Hierarchy and overall strategy B.Target returns and sales potential C.Marketing strategy and sales potential D.Product division and geographic area

D.Product division and geographic area

market makers are ______________. a. financial service companies that connect investors and borrowers b. nonbank financial institutions who want to invest money c. high net worth individuals with surplus cash to reinvest d. those who want to borrow money including individuals, companies and governments

a. financial service companies that connect investors and borrowers

turnkey projects are most common in which of the following industries? a. fresh fruit, grain, and meat products b. chemical, pharmaceutical, and metal refining c. consumer durables, computer peripherals, and automotive parts d. apparel, shows, and leather products

b. chemical, pharmaceutical, and metal refining

in a typical international rade transaction, the _________. a. exporter should obtain a letter of credit to initial transactions b. importer and exporter maintain an account with the same bank c. importer's bank sends a letter of credit to the exporter's bank d. importer's bank sends the draft and bill of lading to the exporter's bank

c. importer's bank sends a letter of credit to the exporter's bank

which of the following statements is true of exporting? a. it increases the trade deficit that nations have b. exporting leads to diseconomies of scope c. it helps a firm achieve economies of scale d. exporing is not beneficial to a country's economy

c. it helps a firm achieve economies of scale

which of the following is true of wholly owned subsidiaries? a. it is the least expensive method of servicing a foreign market from a capital investment standpoint b. it the most feasible entry mode due to the political considerations c. it is required if a firm is trying to realize location and experience curve economies d. it is particularly useful where FDI is limited by host-government regulations

c. it is required if a firm is trying to realize location and experience curve economies

the norms and values systems that are shared among the employees of a company are referred to as: a. processes b. control systems c. incentives d. organizational culture

d. organizational culture