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Copyright Which of the following protects original works of authorship​ (music, art,​ literature, films, and computer​ software)? A snack food company does not release its flavoring formula. Which of the following is an example of a trade​ secret? Contractual entry strategy ​________ in international business ​refer(s) to a​ cross-border exchange in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Contractual agreements are more risky than FDI. Which statement about​ cross-border contractual relationships is​ FALSE? Know-how agreement A patented design process is made available to several manufacturers in order to produce cell phone components in return for compensation to the focal firm. Which of the following does this scenario​ describe? ​clothing; games; toy According to the​ author, the majority of licensing agreements occur in the​ ________, ________, and​ ________ industries. Upgrade to remove ads Only $1/month As an entry​ strategy, licensing is passive and the licensor has to enforce the contract. Which of the following is a disadvantage of​ licensing? Licensing hinders brand name development. Which of the following is NOT a risk of​ licensing? The licensor can use existing intellectual property to generate revenue. Which of the following is an advantage of licensing for the​ licensor? Finding the best business partners According to the​ author, what is the biggest obstacle that firms face in launching franchises in​ China? The franchisor provides training to the franchisee. Which of the following is a true statement about​ franchising? Master franchising Action Time Toys is a company that licenses an independent company to run all the locations in the United Kingdom and Canada. Which of the following does this scenario​ describe? Franchising ​________ is an advanced form of licensing in which the focal firm allows an entrepreneur the right to use an entire business system in exchange for compensation. The​ franchisor's brand image may change in the foreign market. Which of the following is a potential disadvantage to a global​ franchisor? A franchisor can realize greater profits abroad than at home. Which of the following is a benefit to the franchisor in a franchise​ agreement? A franchisee can use a tested format to start a business. What is the advantage of franchising from the​ franchisee's standpoint? ​Build-operate-transfer Which of the following is an arrangement in which a firm oversees a project abroad before transferring ownership to the project​ sponsor? Management contract A firm is hired to provide essential knowledge for operating an airport. Which of the following describes this​ firm's participation? Turnkey contracting ​________ is an arrangement in which the focal - or a consortium of firms - plans, ​finances, organizes,​ manages, and implements all phases of a project abroad and then hands it over to a foreign customer after training local workers. Governments need to build infrastructure in a​ cost-effective manner. Siemens Power​ Generation, a German​ company, was commissioned as a BOT by the Vietnamese government to build a power plant. What was the rationale behind this​ agreement? Professionals working abroad need foreign language skills because they interact with local citizens. Which statement about professional service firms is​ correct? Infringement of intellectual property ​________ is the unauthorized​ use, publication, or reproduction of products and services protected by a​ patent, copyright, or trademark. prevent the infringement of intellectual property Publishers with the rights to licensed material in China print​ best-selling novels on uniquely colored paper. This action of the publishers is most likely an effort to​ ________. enforce intellectual property rights and remedy infringements TRIPS was primarily created to​ ________. Understanding local intellectual property laws According to the​ author, which is the best strategy to protect intellectual property from​ theft?

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Cultural and financial factors Which of the following are environmental conditions that influence a​ firm's product​ development? Frequent business travelers An upscale hotel chain is developing a global marketing strategy to expand into foreign markets. Which market segment should be​ targeted? A global market segment ​________ is a group of customers who share similar characteristics across many national markets. attributes When​ Coca-Cola began to sell beverages in​ Japan, research showed that products labeled​ "diet" were unappealing to the​ Japanese, a population not considered obese. The company changed the name to Coke Light. This is an example of positioning according to​ ________. Stocking local produce An international supermarket chain is opening stores in foreign markets. Which adaptation could be made to accommodate national​ preferences? Standardization ​________ refers to making the marketing program elements uniform with a view to targeting entire​ regions, or even the global​ marketplace, with the same product or service. Upgrade to remove ads Only $1/month seeks local responsiveness and international integration According to the​ author, managers should pursue a strategy that​ ________. Compliance with local regulations Which of the following is NOT a benefit of​ standardization? It should develop a global brand. A large cosmetics company is looking to break into international markets. What strategy should the company pursue to achieve this​ goal? brand equity The strength of a global brand is measured by​ ________. Violating​ host-country laws and regulations Which of the following is a key risk associated with global​ branding? Global​ new-product planning teams ​________ formulate best practices that the firm implements in all its units worldwide. ​Management's market share goals Which of the following is an internal factor that affects international​ pricing? Maintain normal price​ levels, expand the product​ line, or add more costly features An Italian exporter of designer clothes who sells products in the United States has gained a price advantage because the euro is weakening in relation to the dollar. What is a good strategy for dealing with this​ situation? Gray market activity ​________ refers to the legal importation of genuine products into a country by intermediaries other than authorized distributors​ (also known​ as parallel imports). Outsourcing production to a country with a higher standard of living and higher wages Which of the following is NOT a key strategy to combat export price escalation​ abroad? Hire a global advertising agency An international technology company is deciding how to utilize its advertising budget for the year. Which of the following is the best​ option? Media availability and quality Which of the following​ determine(s) the nature of international marketing​ communications? Promotions are intended to stimulate​ first-time purchases. Which statement about international promotional activities is​ true? Culture Which of the following determines buyer attitudes toward​ advertising? Global account management ​________ means serving a key international customer in a consistent and standardized​ manner, regardless of where in the world it operates. direct marketing Many firms are avoiding traditional distribution channels by using​ ________. Requiring costly investments What is a disadvantage of foreign direct​ investment? Moving products through a distribution channel to a retailer Which of the following best describes the role of an​ intermediary? It should use foreign direct investment because this allows the firm to stay close to the market. A U.S. liquor company is establishing a distribution chain for stores across several national markets. The company wants to ensure close control over marketing activities. Which of the following is best for this company and​ why?

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In what do companies engage when they systematically increase the international dimension of their business​ activities? Internationalization ​________refers to the performance of trade and investment activities by firms across national borders International Business Which type of investment is the passive ownership of foreign securities for the purpose of generating financial​ returns? International Portfolio Investment Carol wants to expand her recycled toy business​ abroad, because demand for recycled products is much higher in Europe and Asia than in the United States. She locates three suppliers in Europe and three in​ Asia, and creates one factory in Germany and one in Singapore. She seeks ways to advance her machinery to meet the needs of her production as well as her​ eco-friendly business model. In what type of international business has Carol​ engaged? Foreign Direct Investment A macro trend of intense economic interconnectedness among the nations of the world is called​ ________. Globalization Which of the following would be a​ cross-cultural risk in​ internationalization? Different Languages Upgrade to remove ads Only $1/month If a firm is operating in a foreign​ country, what type of risk does it face from the​ country's political,​ legal, and economic​ environment? Country Risk In international​ business, cross-cultural risk can come from differences in language and culture. Which statement best explains why language is an important aspect of​ culture? Language facilitates communication and sheds light on​ people's value systems. Custom​ Cars, a painting and auto modification​ company, has expanded operations into South America. The first problem Custom Cars encountered was determining the applicable laws in the new country.​ Next, Custom Cars was informed by the local mayor that the firm will be shut down if it does not prepay its taxes in cash. Which risk in international business is Custom Cars​ encountering? Country Risk A U.S. mining operation opens a mine in Canada. The owner knows that it is easier and less expensive to acquire mining equipment in the​ Klondike, an area of​ Canada, than elsewhere. The owner of the mine goes to the Klondike and meets locals who offer to partner with him. Why is this miner seeking international​ business, and what type of risk is he​ taking? Commercial Risk; to gain access to less costly factors of production What type of group that participates in international business is most likely to work in fields such as education and health​ care? Nongovernmental Organizations (NGO's) ​Sally, a recent business school​ graduate, loves​ adventure, so she is seeking a job in a foreign country to expand her sense of the world of business. She is being recruited by a company that has 50 employees and is looking to hire additional personnel to oversee the​ firm's exporting branch in Vietnam. What type of international business is recruiting​ Sally? Small Enterprise Pioneer Systems is a young entrepreneurial company that has engaged in international business from the day it opened its doors. Pioneer is categorized as a​ ________ Born Global Firm A focal firm is a company that​ ________. Initiates international business transactions ​________ include ​businesses, institutions, and governments Organizational Buyers Why would firms internationalize to earn higher margins and​ profits? Market growth in mature countries is often flat, and foreign markets may be undeserved. India is entering the global age and has a growing middle class. An Indian car manufacturer wants to offer a car for the average citizen of​ India, but does not have the technology available to create an inexpensive car that meets the laws that the Indian government is considering imposing. The company sets out to find a U.S. hybrid and electric car manufacturer that is willing to work with them. Why would a U.S. firm most likely​ agree? To develop a network of people and increase business in the future. Companies primarily internationalize for the purpose of​ ________ Gaining a competitive advantage What is the LEAST likely motive for international​ expansion? Learning about a new culture When Nissan opened its first factory in the United​ Kingdom, many Japanese auto parts suppliers​ followed, establishing their own operations there. This is an example of​ ________. Better serving clients that have moved into foreign markets. A business student in Texas is considering learning a foreign language. Why might she benefit from studying a language such as Russian or​ Chinese? Both Russia and China feature​ fast-growing economies. Which of the following is NOT a reason to study international​ business? Global Markets are decreasing Why did Starbucks begin selling coffee only from growers certified by the Rain Forest​ Alliance, a nonprofit organization that promotes the interests of coffee growers and the​ environment? To demonstrate social responsibility and good environmental practices What is the BEST rationale for taking a course in international business? Experience in a global firm will make a worker more competitive What is the most likely reason that​ Nestlé sells its food and beverage products​ worldwide? Nestle wants to earn profits in international markets

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Potential for greater profit margins Which of the following is an advantage of direct​ exporting? Exporting ​________ involves producing products or services in one nation and selling them in another. There is less of an opportunity to learn the purchase behavior of foreign customers. Which of the following is a characteristic of​ exporting? Indirect exporting ​________ is accomplished by contracting with intermediaries located in the​ firm's home market. A legal contract between exporters and importers for shipping goods What is a bill of​ lading? quotation A large consumer home products exporter issues a document that lists the cost of its cleaning products and describes the products themselves and their uses. The document is most likely​ a(n) ________. Upgrade to remove ads Only $1/month Payment is made prior to product shipment. Which of the following characterizes the cash in advance​ method? Countertrade Which of the following involves paying for goods or services using other goods or services when conventional means of payment are difficult or​ unavailable? An energy company purchases timber using oil and a​ $10,000 check. Which of the following examples includes a compensation​ deal? Foreign-based independent distributor What is the most typical type of intermediary in the exporting​ process? Trading company What type of intermediary handles transactions for the importing and exporting of​ commodities, products, and​ services? searching the U.S. Small Business Administration website All of the following are ways to find foreign intermediaries EXCEPT by​ ________. Business process outsourcing ​________ is the outsourcing to independent suppliers of business service functions such as​ accounting, payroll, or technical support. Contract manufacturing Which of the following is an arrangement in which a focal firm has an agreement with an independent supplier to produce items according to​ well-defined specifications? ​Low-control strategy Which of the following best describes global​ sourcing? Large-scale manufacturing firms Which of the following benefits most from global​ sourcing? Redesigning business processes Which of the following is NOT a risk of global​ sourcing? Increasing speed to market A U.S. pharmaceutical corporation outsources its research and development of new medications to various other countries in order to complete more clinical trials at one time. Which of the following benefits to global sourcing does this example best​ demonstrate? Relying too heavily on suppliers An electronics firm in the United States procures production parts from a manufacturer in Japan.​ Recently, the Japanese manufacturer received a larger client.​ Consequently, the Japanese manufacturer is not providing the level of service to the U.S. electronics firm as in the past. Which global sourcing risk does this scenario​ illustrate? reduces the number of home country jobs Many critics of global sourcing assert that global​ sourcing________. Using​ third-party logistics providers A U.S. computer company utilizes FedEx for all of its shipping and delivering needs. Which aspect of implementing global sourcing does this example​ demonstrate? global supply chain ​A(n) ________ is the​ firm's integrated network of​ sourcing, production, and​ distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized. ​cost, transit​ time, and predictability In selecting a transportation​ mode, firms should keep three factors in​ consideration: ________. Outsourcing all​ value-chain activities Which of the following limits a​ manager's success in global​ sourcing? Governments can foster the development of new technologies at home. What can governments do to lessen the harm that global sourcing can​ cause?

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Protectionism ​________ pertains to national economic policies that restrict free trade and protect domestic industries from foreign competition. nontariff trade barrier A government policy or procedure that restricts trade through means other than tariffs is known as​ a(n) ________. National security The United States blocks exports of nuclear and military technology to nations considered state sponsors of​ terrorism, such as Iran and Syria. This is an example of which defensive motive by the U.S.​ government? Governments institute trade barriers on foreign imports to let​ young, domestic firms gain market share. Which of the following is an example of protectionism used to support local​ businesses? Your sales would likely decrease because your goods are now more expensive than those of your local counterparts You own a firm that engages in overseas business.​ Recently, the exchange rate became much higher for your​ country's currency. How would the new exchange rate most likely affect your​ sales? Many governments enforce strict tariffs and restrictions on imports. Economists Debbie and Don are discussing the effect of government intervention on business. Debbie believes that businesses that operate internationally have a more difficult time succeeding than those that operate solely domestically because of government intervention abroad. Don disagrees and asserts that international businesses experience ease of trade more readily than exclusively domestic businesses. Which of the following is the strongest argument for​ Debbie's point of​ view? Import licenses allow companies to do business legally overseas by allowing them to import products What effect do import licenses have on businesses​ overseas? Investment incentives Which type of government intervention encourages foreign companies to enter a​ host-country market? The government will support foreign business by enacting laws that decrease import quotas. If you are a business looking for a foreign market in which to sell​ goods, what does economic freedom in a country mean to your​ business? Subsidies The World Bank has published an index entitled Ease of Doing Business. Which of the following is most likely to make a country​ "easy" to do business​ in? According to the​ GATT, a trade concession to one country did not become a concession to all countries. Which of the following statements about the General Agreement on Tariffs and Trade​ (GATT) is​ FALSE? Tariffs can hurt poor countries like​ Bangladesh, where clothing exporters are concentrated. What ethical concerns do government intervention and trade barriers raise for developing​ economies? foreign trade zone ​A(n)________ is a designated location within a country that receives imported goods for assembly and then​ re-exports finished products. You can manufacture your goods in the destination country and take advantage of​ low-cost labor. You own a company in Texas and have an offer to open up a manufacturing plant as a maquiladora within the territory of one of your largest​ customers, Mexico. Why is this scenario beneficial to your​ business's profit? Firms can use FTZs to assemble foreign materials and components into finished​ products, which are​ re-exported. Which statement about free trade zones​ (FTZs) is​ true? The​ export-led development model enables countries to make goods and then sell them to the world. How can​ export-led development models help countries improve their​ economies? It is easier to reach an agreement on free trade with a few nations than with numerous countries. Why would a nation choose to be a member of an economic​ bloc? customs union The second level of regional integration is​ a(n) ________. Trade among the EU members takes place unobstructed. Which of the following statements best describes the European Union​ (EU)? Creation dispute settlement methods in areas such as​ investment, unfair​ pricing, labor​ issues, and the environment Which of the following was NOT a step taken by the European Union​ (EU) in becoming an economic​ union? NAFTA allowed​ member-country firms to submit bids for government contracts in the three countries. Which of the following statements about NAFTA is​ true? The Gulf Cooperation Council​ (GCC) Which of the following coordinates​ economic, social, and cultural affairs among​ Bahrain, Kuwait,​ Oman, Qatar, Saudi​ Arabia, and the United Arab​ Emirates? all TDC​ Industries, a U.S.​ firm, has established operations in​ Germany, so TDC Industries has free trade access to​ ________of the EU market. internationalization Regional integration leads to increased​ ________ by firms inside their economic bloc. Loss of direct investment Which of the following is a disadvantage of regional​ integration?

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Terms in this set (25) A market that has evolved from being centrally planned to being more liberalized Which of the following best describes a transition​ economy? Privatization ​________ is the transfer of industries from state ownership to​ non-public entities. Emerging markets have greatly increased their share of world imports. Data from the International Monetary Fund and the World Bank suggests that emerging markets have more future promise globally than do current industry leaders. Which of the​ following, if​ true, strengthens the implications of the​ data? Inexpensive labor and government support have spurred the growth of emerging markets. Which statement about emerging markets is​ true? Global sourcing ​________ refers to the procurement of Products or services from independent suppliers or​ company-owned subsidiaries located abroad for consumption in the home country or a third country. use independent suppliers to complete​ value-chain activities Outsourcing occurs when companies​ ________. Upgrade to remove ads Only $1/month Global sourcing Ironwolf Auto is a Canadian auto company that wants to expand its product lines. To help fund the​ expansion, the company decides to purchase metal ore from Brazil to help lower resource costs. This exemplifies which of the​ following? governments in emerging economies attract sales of​ infrastructure-related products Emerging markets have become target markets because​ ________. reflect the goods consumers can​ buy, as well as account for their currency and standard of living Purchasing power parity​ (PPP) adjusts prices to​ ________. Individual households have multiple wage earners. You work for a firm that is analyzing the potential of developing economies. You have gathered accurate information on​ per-capita spending​ income, but households seem to have far more purchasing power than your figures indicate. Which of the following demonstrates the likely reason for this​ issue? ​Middle-class individuals are politically and environmentally active. Why is the middle class used to determine market​ potential? Asia By the year​ 2020, it is expected that half of the​ world's middle class will live in​ ________. family conglomerate A large and highly diversified company that is privately owned is known as​ a(n) ________. Political instability that is associated with weak legal frameworks Which of the following is a risk associated with emerging​ markets? Internet piracy laws are lax In​ Argentina, there is an inconsistency in the way that copyrights on​ music, books, and videos are protected under the law. This example shows that​ ________. FCs provide little tax revenue and fail to stimulate national economic development. Which of the following does NOT describe a family conglomerate​ (FC)? Tenders Russell Steel is a contracting company with a focus on steel buildings. The company wants to transition from commercial work into more​ international, government-oriented projects. Which of the following is the best approach for Russell Steel to consider when pursuing projects for​ fast-growing international​ governments? global firms must create innovative strategies to find success in emerging markets Toyota manufactures new models of cars that sell for​ $7,000 in​ low-income nations. For the Indian​ market, Toyota constructed a factory to achieve a 10 percent share of the Indian car market. These two examples illustrate that​ ________. A foreign firm can form close relationships with the local government. How does a foreign firm benefit from partnering with a family​ conglomerate? Fewer people in emerging markets have Internet access. Aggro Enterprises is attempting to enter emerging​ markets, notably in India and Indonesia. The company offers an​ easy-to-use website interface translated by experts into the local​ language, and uses a customized interface for mobile phones.​ Nevertheless, sales have been flat. Which of the following characterizes the problem with​ Aggro's strategy? Annual GDP is approaching 5 percent per year in some nations in Africa. Which of the following statements best describes economic progress in​ Africa? Microfinance ​________ provides​ small-scale financial services such as credit and loans that assist entrepreneurs in starting businesses in poor countries. The firms can earn profits in emerging markets by offering customized products. Which statement best explains why Unilever and​ P&G sell shampoo for 2 cents per​ mini-sachet in​ India? ​Africa's cell phone market has opened the door to many related industries. Which of the following observations would stimulate investment in an emerging​ market? MNEs exploit resources and pollute the environment. What assertion is made by those who criticize MNEs operating in​ Africa?

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The most likely reason that companies engage in international business is to have​ ________ a competitive advantage in terms of lowering costs Which of the following defines the comparative advantage​ principle? . It may be beneficial for two countries to trade with each other as long as one is relatively more efficient at producing a product needed by the other. ______ favors trade achieved by maximizing exports and minimizing or even impeding imports. Mercantilism Which of the following is NOT a limitation of the absolute and comparative advantage​ theories? ​Large-scale production provides economies of scale The factor proportions theory rests on the premise that​ ________ products differ in amount of​ labor, natural​ resources, and capital required for production The technology for television sets was invented in the United​ States, and production began in the 1940s. Sales grew until TVs became standardized. Then production shifted​ overseas, and now the United States imports its television sets. This is an example of​ ________. The international product life cycle Vix is a leader in​ fare-collection equipment for​ Australia's transportation​ industry, having already installed a​ new, pioneering system in subways and buses in major cities worldwide. In this​ example, Vix has gained a competitive advantage by​ ________. Encouraging innovation Your company is entering a market that has several small clusters of​ well-established companies. Which of the following is true of an industrial​ cluster? Companies in industrial clusters have advantages in information and knowledge exchange The New Zealand government enacted​ pro-trade policies in conjunction with the private sector. The government transformed New Zealand into an​ industrialized, competitive, and​ free-market economy. This is an example of​ ________. A national industrial policy What is a common feature of national industrial​ policies? Offering tax incentives Both Sony and Toshiba are Japanese companies that produce computers and video games. Which of the following could be a reason that these firms have increased their competitive​ advantage? Intense Rivalry ​Germany's abundance of employees with strong engineering skills has led to the nation becoming a leader in the international engineering and design industries. This is an example of national competitiveness due to​ ________. Factor Conditions What is the second stage of the internationalization process​ model? Pre-Export Established in​ 2010, Instagram quickly found an international market for its​ photo- site.​ Currently, only a small fraction of​ Instagram's customers are from the United States. Instagram is an example of​ a(n) ________. Born Global Firm Which of the following best explains the slow nature of​ internationalization? Managers have little or no information about foreign markets What is the most complex entry strategy for engaging in global​ business? Foreign Direct Investment You work for an electronics firm that wishes to do business in India in the next few years by following the internationalization process model. Why is this model a viable option for getting into a global​ market? Starting slow with smaller operations will allow the company to tread cautiously while monitoring progress in the new markets. Networks serve as​ positive, long-term​ ________ that businesses form with each other for economic benefit Relationships How can monopolistic advantage theory explain how certain companies can succeed internationally without much​ competition? Companies succeed overseas if they have developed resources and capabilities that no other company has. An advantage of internalization is the ability to​ ________. Control how a company products are produced SkiJet USA wants to take its production operations overseas. Which of the following is the LEAST likely reason for SkiJet USA to collaborate with overseas​ companies? Foreign partners would give SkiJet USA complete control over production and marketing. The main reason that firms internalize​ value-chain activities is to​ ________. Gain and sustain competitive advantage What is the eclectic​ paradigm? A framework that explains the extent of value chain operations that firms should own overseas According to the eclectic​ paradigm, a factor in deciding whether a firm will internationalize via FDI is the​ _________. presence of​ location-specific advantages Which statement best describes network theory? Buyers and sellers are linked to one another through continuous exchanges.

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There have been four phases of globalization since the 1800s. The most current phase is characterized by​ ________. The growth of cross-border trade ​________ refers to the gradual integration and growing interdependence of national economies. Globalization of Markets Which of the following is a societal consequence of​ globalization? Offshoring and the flight of jobs Which of the following is the MOST likely cause for​ globalization? Emerging markets are now value-adding producers Which of the following drivers of globalization has MOST helped change​ low-value-adding commodity producers to competitive​ producers? Industrialization, economic development, and modernization What is one reason why regional economic integration blocs have developed? Decreased trade barriers ​________ have opened up​ one-third of the world to increased international​ trade, including many Asian economies such as India and South Korea Free Market Reforms One of the tasks of the World Trade Organization​ (WTO) is to​ ________. Facilitate a reduction in trade barriers Advances in​ ________ have resulted in an expansion of the global marketplace for​ small- and​ medium-sized enterprises​ (SMEs) Communications Nigeria's telecom infrastructure has increased telephone usage to over 30 million cellular subscribers. What is the most likely benefit Nigeria will realize from adding​ telephones? Improved living standards What technology has had the greatest effect in developing economies? Mobile Phones What is one reason companies use social media such as Facebook and Twitter? To communicate with connected individuals in new markets _______ is the sequence of​ value-adding activities performed to​ develop, produce,​ market, and service a product. A Value Chain Which of the following is NOT an economic integration bloc? World Trade Organization Blocs: Mercosur European Union APEC NAFTA Globalization of services can be seen in the international expansion of _______. The banking, hospitality, and retailing industries Why can many global products and services be​ standardized? There is a convergence of consumer lifestyles and preferences worldwide. Which of the following is NOT a​ firm-level consequence of market​ globalization? Offshoring and the loss of jobs Globalization has created rivalry between U.S. firms and foreign​ competitors, which has resulted in​ ________ foreign car makers selling more automobiles in the United States _____ is when a company delegates performance of a​ value-adding activity to a firm located abroad. Global outsourcing What is one of the most typical reason for locating​ value-chain activities​ abroad? To reduce the costs of R&D and production In South​ Carolina, Jackson​ Mills, a longstanding textile​ plant, shut down and thousands of workers lost their jobs. Jackson Mills learned that it could source textiles of equal quality at a lower price from suppliers in Asia. This is an example of​ _______ Relocating value-adding activities to achieve cost advantages Contagion is _____ The tendency of a financial crisis in one country to spend quickly to other countries What is the effect on national culture? Local consumers become familiar with global brands and previously unknown products Globalization can threaten national sovereignty by interfering with a country's ____ Ability to control its own economy In​ Africa, the majority of people live on less than​ $2 a day. According to the author of the​ text, what is one of the most effective ways to reduce African​ poverty? Develop more business based models of development

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___ is a situation or event in which a cultural misunderstanding puts some human value at stake Cross-cultural Risk Which of the following best describes​ culture? Culture is relative Acculturation refers to the process of ____. Adapting to a culture other than one's original culture How can companies avoid cross-cultural misunderstandings? Develop a sensitivity for different cultures. Which of the following shows how a polychronic perception of time affects the work​ environment? Plans are changed often Your company is initiating a business relationship with a country that has a polychronic perception of time and an informal culture. Which option indicates what you would expect from this​ company? Meetings would be​ flexible, and the conference room would have a round conference table. Upgrade to remove ads Only $1/month ___ are the basis for our motivation and behavior. Values During a conversation in Latin​ America, people stand closer together than in northern Europe or the United States. This is an example of cultural differences in​ ________. Perception of Space Which element of social structure refers to a​ person's social class and is dependent upon occupation and​ income? Social Stratification ​A(n) ________ is an expression whose symbolic meaning is different from its actual or literal meaning. Idiom Which statement about the religion of Islam is most likely correct? Islam is based on the ​Qur'an​, the​ religion's holy book Many European firms have a business culture that gives workers almost equal standing to that of managers. How does this approach affect company​ operations? It makes it more difficult to lay off workers. Johnson​ & Johnson created​ alcohol-free Listerine Zero for Muslim​ countries, where spirits are​ forbidden, and Green Tea Listerine for Asian markets. This example shows that​ ________ Cultural differences necessitate the tailoring of marketing activities to target markets Technology can both enhance and hinder cultural awareness. Analyze each scenario and select the option in which technology most successfully enhances​ cross-cultural communication. Translation software automatically converts email from Chinese to English. Why do service firms face a potential for communication​ problems? Service films interact more with customers A​ ________ refers to a tradition or institution that is associated with a particular society. Cultural Metaphor Which of the following is a key characteristic of a​ low-context culture? Relying on verbal explanations The Osaka Tea Company of Japan uses nonverbal messages during its management meetings to ensure harmony within the company. The managers exhibit a polite style to show respect and are careful not to make any remarks that could offend others. What kind of culture does this company​ represent? High-Context Culture As per the Hofstede​ studies, societies that score low on​ ________ have managers who are entrepreneurial and take risks. Uncertainty Avoidance Considering our own culture as the standard for judging other cultures is​ a(n) ________. Ethnocentric Orientation What is the LEAST likely way to develop cultural​ competence? Avoid developing cultural intelligence What is the​ self-reference criterion? The tendency to view other cultures according to our own culture Critical incident analysis involves all of the following steps EXCEPT​ ________ using an ethnocentric orientation in judging behavior

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_____ are moral principles and values that govern the behavior of​ people, firms, and governments regarding right and wrong. Ethics What is meant by the term corporate governance​? The system of procedures and processes by which corporations are​ managed, directed, and controlled Law firms sometimes ask their employees to pad their billable hours or charge customers for tasks they did not perform. This is an example of​ ________ Unethical Behavior A U.S. firm does not send female managers to a country where women are expected to be subservient to men. Which of the following is being illustrated by the​ firm? A relativistic ethical perspective What is the most notable form of corruption in international​ business? Bribery Global sourcing most likely raises concerns about _____. Operating factories that generate pollution What is intellectual property? Ideas or works created by individuals or firms Nations that score well on the Corruption Perceptions Index tend to​ ________. Attract global investors ______ are small payments made to​ low-level government officials to perform routine duties more efficiently. Grease payments What is a proactive approach to ethical behavior in which firms seek not only to maximize​ profits, but also to benefit society and the​ environment? Corporate Social Responsibility Corporate social responsibility​ (CSR) is best illustrated by an organization​ ________. Powering a certain percentage of its operations with green energy A​ company's plan for corporate social responsibility​ (CSR) is to rely solely on local suppliers for its operations. What effect will this most likely​ have? Increase the​ company's positive economic impact ​Coca-Cola demonstrates social responsibility by doing which of the​ following? Developing a global plan to protect water resources What practice is NOT a good example of​ sustainability? Deregulating fossil fuel usage Which of the following would most likely be a social interest of a sustainable​ business? Avoiding the use of sweatshops ____ is defined as meeting​ humanity's needs without harming future generations. Sustainability Which of the following situations illustrates​ sustainability? BMW introduces electric cars with​ carbon-fiber bodies to save fuel. A company has an ethical challenge in that its overseas supplier is employing laborers to work in harsh conditions for next to nothing. How would a fairness approach to ethics differ from a common good approach to this​ challenge? The fairness approach would promote paying all of the laborers an equal​ wage, whereas the common good approach would promote lobbying the government to pass laws requiring equal wages. A company that decides to come forward with the truth about its unethical practices is practicing the​ ________ approach to ethical standards. Virtue ​________ is a document that describes the values and expectations that guide the decisions of all employees in a firm. A code of ethics According to the​ ________ approach, the best ethical action is the one that produces the greatest balance of good over harm. Utilitarian Which of the following is the result of good corporate​ governance? Attracting committed employees A firm has an issue with its overseas plant employing children as​ laborers, and the​ firm's top manager is using the​ five-step ethical framework to address the problem. The firm is considering the idea of educating the children several days each week in an​ on-site classroom. Based on the​ five-step ethical​ framework, which statement illustrates the manager implementing a course of​ action? The manager follows up on the​ firm's education initiative. The first step in the​ five-step framework for ethical decision making is to​ ________. Identify the problem According to the​ five-step framework for ethical decision​ making, which question is most relevant when examining the​ facts? Have all the groups affected been​ consulted?

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a competitive advantage in terms of lowering costs The most likely reason that companies engage in international business is to have​ It may be beneficial for two countries to trade with each other as long as one is relatively more efficient at producing a product needed by the other. Which of the following defines the comparative advantage​ principle? Mercantilism ​________ favors trade achieved by maximizing exports and minimizing or even impeding imports. ​Large-scale production provides economies of scale. Which of the following is NOT a limitation of the absolute and comparative advantage​ theories? products differ in amount of​ labor, natural​ resources, and capital required for production The factor proportions theory rests on the premise that​ the international product​ life cycle The technology for television sets was invented in the United​ States, and production began in the 1940s. Sales grew until TVs became standardized. Then production shifted​ overseas, and now the United States imports its television sets. This is an example of​ encouraging innovation Vix is a leader in​ fare-collection equipment for​ Australia's transportation​ industry, having already installed a​ new, pioneering system in subways and buses in major cities worldwide. In this​ example, Vix has gained a competitive advantage by​ Companies in industrial clusters have advantages in information and knowledge exchange. Your company is entering a market that has several small clusters of​ well-established companies. Which of the following is true of an industrial​ cluster? a national industrial policy The New Zealand government enacted​ pro-trade policies in conjunction with the private sector. The government transformed New Zealand into an​ industrialized, competitive, and​ free-market economy. This is an example of Offering tax incentives What is a common feature of national industrial​ policies? Intense rivalry Both Sony and Toshiba are Japanese companies that produce computers and video games. Which of the following could be a reason that these firms have increased their competitive​ advantage? factor conditions ​Germany's abundance of employees with strong engineering skills has led to the nation becoming a leader in the international engineering and design industries. This is an example of national competitiveness due to​ ​Pre-export What is the second stage of the internationalization process​ model? born global firm Established in​ 2010, Instagram quickly found an international market for its​ photo- site.​ Currently, only a small fraction of​ Instagram's customers are from the United States. Instagram is an example of​ a(n) Managers have little or no information about foreign markets. Which of the following best explains the slow nature of​ internationalization? Foreign direct investment What is the most complex entry strategy for engaging in global​ business? Starting slow with smaller operations will allow the company to tread cautiously while monitoring progress in the new markets. You work for an electronics firm that wishes to do business in India in the next few years by following the internationalization process model. Why is this model a viable option for getting into a global​ market? relationships Networks serve as​ positive, long-term​ ________ that businesses form with each other for economic benefit. Companies succeed overseas if they have developed resources and capabilities that no other company has. How can monopolistic advantage theory explain how certain companies can succeed internationally without much​ competition? control how a​ company's products are produced An advantage of internalization is the ability to​ Foreign partners would give SkiJet USA complete control over production and marketing. SkiJet USA wants to take its production operations overseas. Which of the following is the LEAST likely reason for SkiJet USA to collaborate with overseas​ companies? gain and sustain competitive advantage The main reason that firms internalize​ value-chain activities is to​ A framework that explains the extent of value chain operations that firms should own overseas What is the eclectic​ paradigm? presence of​ location-specific advantages According to the eclectic​ paradigm, a factor in deciding whether a firm will internationalize via FDI is the Buyers and sellers are linked to one another through continuous exchanges. Which statement best describes network​ theory?

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expatriate Any employee assigned to work and live in a foreign country for an extended period is known as​ a(n) ________. IHRM managers can easily fire unproductive employees. Which of the following statements about international human resource management​ (IHRM) is​ FALSE? Preparing compensation packages equal to those at home Which of the following is NOT a task of international human resources​ management? ​third-country nationals A Canadian MNE hires Swiss employees to work at a subsidiary in Turkey. The Swiss employees are​ ________. recruitment An HR department is responsible for handling​ ________, the process of searching for potential job candidates. ​Parent-country nationals To strengthen its European​ operations, a​ U.S.-based home goods chain plans to send some U.S. workers with managerial experience to its sites in​ Spain, Italy, and Germany. These workers will help develop local​ managers, using specialized skills to train them. What is the best term for this group of​ workers? Upgrade to remove ads Only $1/month Behavioral flexibility To prepare you for an international​ conference, your​ employer, an education and tutoring​ company, is hosting training sessions on cultural intelligence. You participate in​ role-playing activities demonstrating how to adapt to foreign cultures. Under which dimension of cultural intelligence does this​ fall? assumes that a lack of language skills is the only issue causing culture shock The head of HR strongly recommends increased language training for employees going abroad. She feels that problems related to anxiety and confusion will be solved once the employees have better language skills. Her argument is flawed primarily because it​ _______. self-reference criterion An employee from your firm has come back early from an international assignment because of difficulty adjusting in the new culture. Host country colleagues exhibited behaviors considered inappropriate in the United States. This is known as​ ________. Which type of training is appropriate for employees Some managers feel a training program for employees in the foreign country for weeks or months will develop an international mindset. Other managers believe that​ long-term training will not serve employees well and will be costly. Which of the following issues is most relevant to the​ debate? practical information Training that prepares employees to work abroad needs to include​ ________, knowledge about​ housing, food, and customs that facilitates​ day-to-day functioning in a new culture. Cross-cultural awareness ​________ is the ability to interact effectively and appropriately with people from different language and cultural backgrounds. Performance appraisal ​________ is a formal process for assessing how effectively employees perform their jobs. differences in accounting practices According to the​ author, performance appraisal in foreign subsidiaries is primarily challenging because of​ ________. Benefits ​________ include(s) healthcare​ plans, life​ insurance, unemployment​ insurance, and paid vacation days. allowance Some employers may pay their international employees​ a(n) ________, designed to help them maintain their established standard of living. Collective bargaining Which of the following refers to joint negotiations between management and hourly labor and technical staff regarding wages and working​ conditions? declining In many advanced economic​ countries, union membership is​ ________. codetermination In the process of​ ________, labor representatives participate in company decision making by sitting on a corporate board. collective bargaining U.S. labor unions remain an important political force because of​ ________. developing their cultural intelligence International experience benefits employees by​ ________. Female managers most often work as human resources directors and chief financial officers. Which of the following is a true statement about women in the workforce​ worldwide? women are not regarded as suitable leaders for foreign assignments Although many women want international​ jobs, few obtain expatriate positions because​ ________. flexible schedules Many companies have restructured workplace practices to assist employees raising children by offering​ ________. Many of​ Nike's plants had substandard working conditions. Why was Nike accused of violating the principles of corporate social​ responsibility?

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foreign exchange The term​ ________ represents all the forms of money that are traded​ internationally, including bank​ deposits, checks, and electronic transfers. currency risk For firms engaged in international​ business, fluctuations in the exchange rate are likely to create​ ________, which is the potential harm that can arise from changes in the price of once currency relative to another. capital flight Investors withdrew a significant amount of rubles from Russia in 2014 when global investors became far less confident in the Russian economy. This is an example of​ A currency that can be easily exchanged for other currencies Which of the following describes a convertible​ currency? supply and demand When the value of a​ nation's currency is allowed to​ fluctuate, the most important factor determining its exchange rate is​ The value of the currency will weaken as residents and foreign investors exchange their holdings for hard currency. A developing country has experienced rapid changes in the value of its currency and the military is rumored to be planning a coup. How is this instability likely to affect the value of the​ nation's currency? undervalue its currency To keep the value of its currency artificially​ high, a government would most likely​ balance of payments Governments must manage their​ ________, the annual accounting of all economic transactions of a nation with all other nations. International Monetary Fund​ (IMF) The institution that attempts to stabilize currencies by monitoring the foreign exchange systems of member countries is the​ Pegging its currency to the value of a hard currency or basket of currencies A developing country wants to stabilize the value of its currency. Which strategy is most likely to achieve that​ goal? If a nation faces a trade​ deficit, the fixed exchange rate system allows for a more natural correction. Which statement about a floating exchange rate system is​ FALSE? Another name for the fixed exchange rate system is the pegged exchange rate system. Which of the following describes the fixed exchange rate​ system? Global financial system Which of the following consists of the collective financial institutions that facilitate and regulate flows of investment and capital funds​ worldwide? ​Single-currency systems have taken on an increasingly important role. What is a cause of the growing integration of global financial and monetary​ systems? institutional investors The most significant participants in national stock and bond markets are​ very large flows of capital have been invested into stock markets around the world China and the former Soviet Union opened to global business following the globalization of finance in the 1990s.​ Today, it is true that​ commercial banks Financing business​ activity, exchanging foreign​ currencies, and facilitating adjustments in national money supplies are the most important functions of​ Buy their currency in the foreign exchange market. If a​ nation's central bank wants to support the value of its​ currency, which strategy would best achieve that​ goal? Etwas will have a steady stream of revenue from its international sales. Etwas is a​ Germany-based appliance company that is preparing to begin international​ operations, wherein it plans to open several production facilities and sales centers abroad. The company needs a substantial amount of capital to start its international operations and needs to decide whether to pursue financing by selling bonds in the global market. Which of the following would strengthen the case for​ Etwas's seeking to acquire capital by selling​ bonds? Investment banks underwrite​ (guarantee the sale​ of) stock and bond issues and advise on mergers. New product ideas have been brought to Africa by foreign banks. Which of the following indicates a solution to the banking problems in​ Africa? In an attempt to stabilize foreign​ exchange, the World Bank provides nations with​ short-term loans. Which of the following does NOT describe the World​ Bank? Norway According to the 2015 World Economic Outlook Database​, the country with the lowest level of debt is​ Excessive government spending has led to increased debt. Why has debt substantially increased in major advanced​ economies? national pension and healthcare programs The largest proportion of government debt results from

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goals When a firm is trying to determine whether it is ready for international​ expansion, the​ firm's ________ should be carefully considered. Obtaining higher cost inputs Which of the following reduces international business opportunities for a​ firm? A medical supply firm sells products unavailable in most of East Asia. Which of the following scenarios signals that a business is suited for international​ expansion? Company readiness to export ​________ is a diagnostic tool that asks questions about a​ firm's organizational​ resources, skills, and motivation to determine whether the firm can be successful in exporting. Medical supplies in a large Eastern European country Products and services that are the most suitable for foreign markets tend to have similar characteristics. Which of the following products or services would be most suitable for a foreign​ market? ask intermediaries about demand in the target market In deciding whether a product will sell in a foreign​ market, it would best for companies​ to________. Opening a subsidiary in a foreign market Which of the following is NOT a suggested method for deciding whether products are suitable for a foreign​ market? These products and services address universal needs. Why are​ personal-care products, medical​ devices, and banking services often suitable products and services for a foreign​ market? Rising GDP rates Which of the following makes countries attractive for exports and​ FDI, but not for​ sourcing? Using this country as an export market A country has a large middle class with a relatively small but quickly rising GDP. Prices for commercial infrastructure remain high despite the lack of a highly skilled or trained workforce. Assume you work for a firm that creates a product appealing to the domestic middle class but not readily available in this market. Which type of international business​ expansion, if​ any, would you​ suggest? gradual elimination The researcher who uses​ ________ begins with many target countries and pares down the choices after considering increasingly specific information. China In the Market Potential​ Index, countries are ranked on several variables. In emerging​ markets, the index shows that​ ________ is a very attractive market. Industry market potential assessment relies heavily on government data. How does assessing industry market potential differ from assessing company sales​ potential? Developing new technology Which of the following is NOT a method for estimating market​ potential? Profiles about various countries What information can be obtained from​ export.gov? Products are in various stages of the product life cycle in different markets. What makes estimating industry market potential a difficult​ task? distributors with complementary skills When looking for potential foreign​ distributors, a firm should try to find​ ________. Licensing does not include​ operators' skills training. How does licensing differ from​ franchising? An international collaborative venture ​________ is a ​cross-border business alliance whereby partnering firms pool their resources and share costs and risks to undertake a new business venture. transfer of naming rights and job skills to independent operators Franchising is best described as the​ ________. The sales for laptops in the United States are adjusted to estimate demand in Canada. Which of the following illustrates the analogy method in determining company sales​ potential? Company sales potential ​________ refers to an estimate of the share of annual industry sales that the firm expects to generate in a particular target market. proxy indicators Top​ Tools, a U.S. company that manufactures​ battery-powered tools, is considering the idea of selling its products in​ Colombia, an emerging market. Because there is little information about tool sales in​ Colombia, Top Tool researchers are gathering data about construction activity in Colombia. This approach is called​ ________. the analogy method If a pharmaceutical firm knows how many antibiotics are sold per​ 1,000 physicians in a​ country, it can assume that the ratio will be the same in a similar country. This example demonstrates​ ________. the intensity of competition A​ firm's sales are linked to uncontrollable factors such as​ ________.

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joint venture ​A(n) ________ is a form of collaboration between two or more firms to create a new enterprise. Companies from nations with advanced economies are active in FDI. Which of the following statements illustrates a trend in​ FDI? ​automotive; oil; telecommunications The MNEs that are the most active in FDI are in the​ ________, ________, and​ ________ industries. United Kingdom In​ 2014, which of the following was one of the top five recipients of​ FDI? Vertical integration A single electronics firm has ownership of manufacturing and assembling facilities as well as retailers to sell the finished products in several foreign countries. Which of the following does this scenario​ describe? The firm will purchase stocks and bonds in a foreign company. If a firm seeks to make an international portfolio​ investment, which of the following will​ occur? FDI requires fewer of a​ firm's capabilities than does any other entry strategy. Which of the following statements about FDI is​ FALSE? Labor A firm is considering establishing several manufacturing facilities abroad and is considering all the factors that influence FDI locations.​ Currently, it employs researchers to figure out if the locations have the ability to operate the new facilities. What factor of production is the firm​ considering? Avoiding trade barriers Which of the following is an​ efficiency-seeking motive for​ FDI? rivals plan to expand in their home market Managers most likely seek FDI opportunities when​ ________. Firms that find a local partner increase the risks of entry. Which of the following reasons for acquiring production factors through FDI and collaboration is​ FALSE? Economies of scope Which term refers to the cost savings that arise from using a relatively fixed base of managerial​ talent, facilities, and other company assets across a larger​ marketplace? Greenfield investment A firm has decided against entering into collaborative ventures with other companies. Which of the following arrangements would be possible without collaborating or joining with another​ firm? Vertical integration Which of the following describes a​ firm's ownership of the manufacturing and distribution of a​ product? wholly owned direct investment ​A(n) ________ is FDI in which the investor assumes complete ownership of the business and secures complete managerial control over its operations. makes investments in its own industry in order to expand its capacity Horizontal integration implies that a company​ ________. merger ​A(n) ________ is a special type of acquisition in which two companies join to form a larger firm. Consortium What is the result when multiple partners venture to collaborate on a​ large-scale, non-equity​ project? A new legal entity is created in an equity joint​ venture, but not in a​ project-based collaboration. What is the difference between an equity joint venture and a​ project-based collaboration? Having a partner that can navigate the local regulatory environment What is a characteristic of most​ collaborations? Protect core competencies by balancing competition with collaboration. Which of the following can contribute to the success of a collaborative​ venture? Establishing logistics that are efficient Which of the following would likely improve the successfulness of an international​ retailer? it sources products locally and provides jobs Walmart has been successful in China because​ ________. Japanese consumers prefer​ high-quality furnishings, instead of​ IKEA's low-cost furnishings. Which of the following examples shows why some international retailers have​ failed? The company imports all products to its European stores from manufacturing sources abroad. Although Black and White Clothing Company is a successful international​ retailer, some business activities need improvement. Which of the following company activities should be changed to improve the success of the​ business?

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A market that has evolved from being centrally planned to being more liberalized Which of the following best describes a transition​ economy? Privatization ​________ is the transfer of industries from state ownership to​ non-public entities. Emerging markets have greatly increased their share of world imports. Data from the International Monetary Fund and the World Bank suggests that emerging markets have more future promise globally than do current industry leaders. Which of the​ following, if​ true, strengthens the implications of the​ data? Inexpensive labor and government support have spurred the growth of emerging markets. Which statement about emerging markets is​ true? Global sourcing ​________ refers to the procurement of Products or services from independent suppliers or​ company-owned subsidiaries located abroad for consumption in the home country or a third country. use independent suppliers to complete​ value-chain activities Outsourcing occurs when companies​ ________. Global sourcing Ironwolf Auto is a Canadian auto company that wants to expand its product lines. To help fund the​ expansion, the company decides to purchase metal ore from Brazil to help lower resource costs. This exemplifies which of the​ following? governments in emerging economies attract sales of​ infrastructure-related products Emerging markets have become target markets because​ ________. reflect the goods consumers can​ buy, as well as account for their currency and standard of living Purchasing power parity​ (PPP) adjusts prices to​ ________. Individual households have multiple wage earners. You work for a firm that is analyzing the potential of developing economies. You have gathered accurate information on​ per-capita spending​ income, but households seem to have far more purchasing power than your figures indicate. Which of the following demonstrates the likely reason for this​ issue? ​Middle-class individuals are politically and environmentally active. Why is the middle class used to determine market​ potential? Asia By the year​ 2020, it is expected that half of the​ world's middle class will live in​ ________. family conglomerate A large and highly diversified company that is privately owned is known as​ a(n) ________. Political instability that is associated with weak legal frameworks Which of the following is a risk associated with emerging​ markets? Internet piracy laws are lax In​ Argentina, there is an inconsistency in the way that copyrights on​ music, books, and videos are protected under the law. This example shows that​ ________. FCs provide little tax revenue and fail to stimulate national economic development. Which of the following does NOT describe a family conglomerate​ (FC)? Tenders Russell Steel is a contracting company with a focus on steel buildings. The company wants to transition from commercial work into more​ international, government-oriented projects. Which of the following is the best approach for Russell Steel to consider when pursuing projects for​ fast-growing international​ governments? global firms must create innovative strategies to find success in emerging markets Toyota manufactures new models of cars that sell for​ $7,000 in​ low-income nations. For the Indian​ market, Toyota constructed a factory to achieve a 10 percent share of the Indian car market. These two examples illustrate that​ ________. A foreign firm can form close relationships with the local government. How does a foreign firm benefit from partnering with a family​ conglomerate? Fewer people in emerging markets have Internet access. Aggro Enterprises is attempting to enter emerging​ markets, notably in India and Indonesia. The company offers an​ easy-to-use website interface translated by experts into the local​ language, and uses a customized interface for mobile phones.​ Nevertheless, sales have been flat. Which of the following characterizes the problem with​ Aggro's strategy? Annual GDP is approaching 5 percent per year in some nations in Africa. Which of the following statements best describes economic progress in​ Africa? Microfinance ​________ provides​ small-scale financial services such as credit and loans that assist entrepreneurs in starting businesses in poor countries. The firms can earn profits in emerging markets by offering customized products. Which statement best explains why Unilever and​ P&G sell shampoo for 2 cents per​ mini-sachet in​ India? ​Africa's cell phone market has opened the door to many related industries. Which of the following observations would stimulate investment in an emerging​ market? MNEs exploit resources and pollute the environment. What assertion is made by those who criticize MNEs operating in​ Africa?

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