Chapter 8 Quiz

Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model? Japanese cameras and copiers Italian leather processing and shoes U.S. computers and software Highway systems and the supply of debt capital

Highway systems and the supply of debt capital

Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ greatly from its home market, instead expanding within the twelve-nation region that includes its home country. Which of the following statements is true? The firm is not engaging in international trade. The firm is using a regional approach to international expansion. The firm will not be able understand the cultures, legal, and social norms of this market. Skaredykat is too afraid to implement an international strategy.

The firm is using a regional approach to international expansion.

Three of the following are incentives for a company to become multinational, which is NOT an incentive? To gain access to consumers in emerging markets To gain easier access to raw materials To avoid high domestic taxation on corporate income Opportunities to integrate operations on a global scale

To avoid high domestic taxation on corporate income

If intellectual property rights in an emerging economy are not well protected, the number of firms in the industry is rapidly growing, and the need for global integration is high, __________ is the preferred entry mode. exporting strategic alliance a joint venture or wholly owned subsidiary licensing

a joint venture or wholly owned subsidiary

If conflict in a strategic alliance or joint venture is not manageable, a(n) __________ may be a better option. licensing strategy exporting strategy acquisition new wholly owned subsidiary

acquisition

A licensing agreement: results in two firms agreeing to share the risks and the resources of a new venture. is the best way to protect proprietary technology from future competitors. allows a foreign firm to purchase the right to manufacture and sell a firm's products within a host country. can be greatly impacted by currency exchange rate fluctuations.

allows a foreign firm to purchase the right to manufacture and sell a firm's products within a host country.

In order to work with various business functions in organizations, such as accounting, operations, and marketing, strategic managers need to: create integrative mechanisms, such as cross-functional teams. allow for specialization within functions. create functional silos. simply react to the environment.

create integrative mechanisms, such as cross-functional teams.

A global corporate-level strategy emphasizes: differentiated products. economies of scale. sensitivity to local product preferences. decentralizing control and limited monitoring.

economies of scale.

Which of the following is NOT an advantage associated with putting facilities in other countries? low-cost labor. access to critical supplies. access to customers. evasion of host country governmental regulations.

evasion of host country governmental regulations.

Which of the following offers the largest amount of control when entering an international market? licensing. acquisitions. joint ventures. greenfield ventures.

greenfield ventures.

The transnational strategy is becoming increasingly necessary to compete in international markets for all of the following reasons EXCEPT: the growing number of competitors heightens the requirements to keep costs down. the desire for specialized products to meet consumers' needs. differences in culture and institutional environments also require firms to adapt their products and approaches to local environments. it is easy to use.

it is easy to use.

One of these answers is a fundamental reason for a country to utilize advanced and specialized factors of production, which is it ? lack of basic resources. monetary wealth. small workforce. protective tariffs.

lack of basic resources.

The positive results associated with increasing international diversification have been shown to: continue as the level of international diversification increases. level off and become negative as diversification increases past some point. become negative quickly. be centered in only one or two industries.

level off and become negative as diversification increases past some point.

Disney suffered lawsuits in France, at Disneyland Paris, because of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of the: effects of regionalization. risks of a multidomestic strategy. liability of foreignness. effect of demand conditions.

liability of foreignness.

Terrorism creates an economic risk for firms, which: reduces the amount of investment foreign companies will make in a country perceived to be terror prone. is created by governmental bans on doing business with terrorist regimes. is offset by the above-average returns for firms that have learned how to operate in such an environment. is absorbed by firms that are highly geographically diversified and that operate in both secure and insecure locations.

reduces the amount of investment foreign companies will make in a country perceived to be terror prone.

Associations such as the European Union, Organization of American States, and the North American Free Trade Agreement encourage: global strategies. domestication. regional strategies. nationalization.

regional strategies.

Which of the following best refers to an international strategy? action plan pursued by American companies to compete against foreign companies operating in the United States. strategy through which the firm sells its goods or services outside its domestic market. political and economic action plan developed by businesses and governments to cope with global competition. strategy American firms use to dominate international markets.

strategy through which the firm sells its goods or services outside its domestic market.

International corporate-level strategy focuses on: the scope of a firm's operations through geographic diversification. competition within each country. economies of scale. sophistication of monitoring and controlling systems.

the scope of a firm's operations through geographic diversification.

Increasingly, customers worldwide are demanding emphasis on local requirements and companies require efficiency as global competition increases. This has triggered an increase in the number of firms using the __________ strategy. multidomestic transnational universal global

transnational

Effectively implementing the __________ international corporate-level strategy often produces higher performance than does implementing either the __________ or __________ strategies. multidomestic; global; transnational global; multidomestic; transnational cost leadership; differentiation; focus transnational; multidomestic; global

transnational; multidomestic; global