IBA Exam 2 (chapters 6,7,8,11,16)
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?
culture and language
buyer receptiveness differs as a function of ________.
Foreign Corrupt Practices Act (FCPA)
firms are prohibited from offering bribes to foreign firms to obtain business
true
True or False: Regional integration greatly increases the scale of the marketplace for firms inside the economic bloc.
Geographic area structure
Under which one of the following organizational structures are management and control highly decentralized to the level of individual regions?
Tariffs, taxes, and markups
What causes international prices to rise?
European Union (EU)
Which of the following is a regional trade organization?
Maintaining a strict adherence to ethical behavior
Which of the following is a strategy managers can employ to manage country risk?
cater to local customer needs
Which of the following would exert pressure on a firm to become locally responsive?
Organizational processes
Which term defines managerial procedures, actions, and mechanisms that allow an organization to operate as planned?
Countertrade
Which term defines the business transactions where payments are made in kind instead of in cash?
Outsourcing
Which term refers to acquiring certain value-chain activities, including the production of finished products from independent suppliers?
investment incentives
Which type of government intervention encourages foreign companies to enter a host-country market?
Global strategy
Which type of strategy involves centralized coordination and control of different international operations?
politically and environmentally active
Why is the middle class used to determine market potential?
transfer pricing
Pricing of products exchanged among different parts of the same corporate business, located in different countries, is called ________.
standardization
Products that have universal specifications are the best candidates for __________ of its marketing program.
Decentralized structure
Which one of the following approaches affords significant independence and decision-making authority to the firm's subsidiaries around the world?
common market
Which one of the following involves reducing or removing barriers to trade, establishing shared external barriers, and permitting the unrestricted movement of goods, services, and factors of production within participating countries?
Reducing trade barriers
Which one of the following is a major factor in the growth of global commerce and in rising incomes worldwide?
Political and legal systems are interdependent.
Which one of the following is true of political and legal environments in international business?
Embargo
Which one of the following officially bans imports from and exports to a specific country in an attempt to impose a political punishment?
Foreign direct investment
Which one of the following provides the most control over foreign operations?
GATT
Which one of the following was the first major effort to systematically reduce trade barriers worldwide?
easier to reach an agreement
Why would a nation choose to be a member of an economic bloc?
Flexibility
________ enables an MNE to accommodate various country-specific challenges and opportunities.
Global new-product planning teams
________ formulate best practices that the firm implements in all its units worldwide.
Advanced economies
________ have high per-capita revenues, very competitive businesses, and strong infrastructures. They include Australia, Canada, and New Zealand.
Transition economies
________ include groups of evolving markets that have progressed from centrally planned economies into liberalized markets.
Regional economic integration
________ involves countries establishing agreements with one another for the purpose of minimizing obstacles concerning trade and business ventures.
Strategy
________ is a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage.
Arbitration
________ is a process in which an unbiased third party listens to both sides of a case and makes a decision in favor of one party or the other, based on an impartial analysis of facts.
Global account management
________ means serving a key international customer in a consistent and standardized manner, regardless of where in the world it operates.
litigation
________ occurs when one party files a lawsuit against another.
Protectionism
________ pertains to national economic policies that restrict free trade and protect domestic industries from foreign competition.
Country risk
________ refers to the possibility of loss or adverse effects on company operations and profitability as a result of changes in a country's political and/or legal environment.
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.
Purchasing power parity
_____________________ adjusts prices to reflect the goods consumers can buy, as well as account for their currency and standard of living
culturally diverse team
a ___________________________ would create a global view inside the firm while remaining in touch with local realities
global brand
a brand whose positioning, advertising strategy, look, and personality are standardized worldwide
global marketing strategy
a plan of action the firm develops for foreign markets that guides managerial decision making on: how to position itself and its offerings and which customer segments to target.
emerging markets
Political instability that is associated with weak legal frameworks
economic freedoms
which characteristic is this: "Market forces and the ability to easily implement commercial activities"
extraterritoriality?
which of the following does this characterize: "Applying home-country laws to persons outside national borders"
socialism
which one of the following is based on a collectivist mentality and requires that all capital be put back into the state and used as a source of production and not profit?
developing economies
Low-income countries like Bangladesh and Nicaragua are categorized as ________ because they have limited industrialization and stagnant economies.
Global integration
________ is defined as the coordination of a firm's worldwide value-chain activities to obtain synergy, efficiency, and cross-fertilization.
privatization
________ is the transfer of industries from state ownership to non-public entities.
Gray market activity
________ refer(s) to the legal importation of genuine products into a country by intermediaries other than authorized distributors (also known as parallel imports).
Stocking local produce
An international supermarket chain is opening stores in foreign markets. Which adaptation could be made to accommodate national preferences?
brand equity
the strength of a global brand is measured by _____________
transnational
A coordinated approach to internationalization in which the firm strives to be relatively responsive to local needs while retaining sufficient central control of operations is a ________ strategy.
Economies of scale
A firm most likely opts for global integration in order to take advantage of which of the following factors?
nontariff trade barrier
A government policy or procedure that restricts trade through means such as quotas is known as a(n) ________.
It occurs after an MNE makes large investments in a country's property and facilities
A huge MNE was the victim of creeping expropriation from a foreign government. Why is creeping expropriation ethically wrong?
family conglomerate
A large and highly diversified company that is privately owned is known as a(n) ________.
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?
positioning
A marketing strategy in which a firm creates a distinct impression in the customer's mind is called ________.
functional structure
A(n) ________ is an arrangement in which management of the firm's international operations is organized by activity, such as production and marketing.
foreign trade zone
A(n)________ is a designated location within a country that receives imported goods for assembly and then re-exports finished products.
Changes in the political climate might influence government interference in business practices
An American company that does business overseas has to be concerned about local events. Why should a company be concerned about political events and the legal environment in the country in which it does business?
Frequent business travelers
An upscale hotel chain is developing a global marketing strategy to expand into foreign markets. Which market segment should be targeted?
encouraging economic growth
Companies help address poverty around the world in many ways. If a foreign firm in an emerging market modernizes local roads and bridges and creates jobs for workers in the community, the firm is ________.
licensing or franchising
Contractual relations usually take the form of ______, in which an organization allows an international partner to use its intellectual property in return for royalties.
competitive advantage
Global branding increases a firm's ________ in international markets.
all of the above
Governments impose defensive barriers to ________: a. promote national security b. safeguard industries c. protect workers d. all of the above
relationships with the local government.
How does a foreign firm benefit from partnering with a family conglomerate?
understand local conditions
In emerging markets, why do successful firms develop close community relationships?
culture
In international advertising, the receptiveness of the buyer to advertising changes is a function of ________.
centralized approach
In a(n) ________, the headquarters of a company has significant authority and control over the company's global activities.
SIGs influence elected officials who can change policy.
It has recently been found that special interest groups (SIGs) have unprecedented access to politicians through social events. Why should companies be concerned with the SIGs' access to government officials?
mixed system
Many Middle Eastern countries practice both civil law and Islamic law. In this case, under which legal system are these countries ultimately categorized?
NAFTA
Members of ________ benefited the most from the maquiladora program.
intermediary
Moving products through a distribution channel to a retailer Your answer is correct. B.
establishing a stronger political position as a united bloc
Regional integration enables member countries to gain bargaining power in world affairs by ________.
internationalization
Regional integration leads to increased ________ by firms inside their economic bloc.
all
TDC Industries, a U.S. firm, has established operations in Germany, so TDC Industries has free trade access to ________of the EU market.
false
TRUE OR FALSE: A firm can reduce its marketing and advertising costs substantially by focusing on numerous national brands instead of a single global brand.
true
TRUE OR FALSE: Firms that want to become globally competitive must seek simultaneously three strategic objectives-efficiency, flexibility, and learning.
true
TRUE OR FALSE: In the early stages of market research, managers examine three important statistics to estimate market potential: per-capita income, size of the middle class, and market potential indicators.
true
TRUE OR FALSE: Increasingly, mainstream banks view microfinance as a source of future growth
true
TRUE OR FALSE: Inexpensive labor and government support have spurred the growth of emerging markets.
true
TRUE OR FALSE: MNEs must set prices appropriate for local conditions. Many firms devise innovative products and packaging to keep prices low.
false
TRUE OR FALSE: Obtaining economic development incentives from host-or home-country governments increases the cost of trade and investment barriers.
true
TRUE OR FALSE: Tariffs and most nontariff trade barriers impact importers by making products more expensive.
true
TRUE OR FALSE: foreign units of a company using a multidomestic strategy are autonomous and operate independently.
true
TRUE OR FALSE: Political instability is associated with corruption and weak legal frameworks that discourage inward investment and the development of a reliable business environment.
Sanctions punish unwanted activities by foreign countries.
The United States has implemented trade sanctions on Iran and Syria. What is the purpose of sanctions?
international organizations
The World Bank, the World Trade Organization, and the United Nations Conference on Trade and Development are examples of ________.
low cost labor
The new global challengers have become formidable competitors primarily because ________.
home replication strategy
The ________ refers to an approach in which a firm views international business as separate from, and secondary to, its domestic business.
visionary leadership
Top managers who provide inspirational direction and motivation to employees in an attempt to take a company to a better future are exhibiting ________.
both make decisions on a country-to-country basis.
What does a multidomestic industry have in common with local responsiveness?
tariffs can hurt poor countries
What ethical concerns do government intervention and trade barriers raise for developing economies?
Tradition, previous cases, and legal precedents
What is the basis of common law?
Assessing potential threats
What is the benefit of environmental scanning?
Expropriation
What kind of government seizure compensates foreign-owned businesses?
import tariff
What type of tariff is assessed as a percentage of the value of the imported product?
Political instability
Which challenge of emerging markets is associated with corruption and weak legal frameworks that discourage business investments?
stability based on laws
Which of the following BEST describes a political system?
Cultural and financial factors
Which of the following are environmental conditions that influence a firm's product development?
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?
Rule of law
Which of the following describes a legal system with clear rules that are publicly disclosed, enforced fairly, and respected by individuals, organizations, and the government?
The origins of Islamic law date back to Roman law and the Napoleonic Code.
Which of the following does NOT describe Islamic law, also known as shariah law?
Organizational structure
Which of the following identifies the reporting relationships in an organization?
Violating host-country laws and regulations
Which of the following is a key risk associated with global branding
Purchasing power parity
Which of the following is used by managers to analyze data to estimate market potential in a certain location?
General Agreement on Tariffs and Trade
Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade disagreements?
Efficiency
Which of the following refers to reducing the cost of a firm's global activities?
Exporting
Which of the following represents a low-control strategy?
increasing the requirements for licenses
Which of the following situations will discourage business activities of foreign firms in an emerging market?
Trade among the EU members takes place unobstructed
Which of the following statements BEST describes the European Union (EU)?
direct investment from abroad
Which of the following trends supports improving economic conditions in Africa?
Media availability and quality
Which of the following determine(s) the nature of international marketing communications?
The government will support foreign business by enacting laws that decrease import quotas.
economic freedom
adaptation
the firm's efforts to modify one or more elements of its international marketing program to accommodate specific customer requirements in a particular market
true
true or false: NAFTA allowed member-country firms to submit bids for government contracts in the three signing countries (Canada, Mexico, and the United States).
socialism
what does this statement describe: "collective welfare outweighs individual welfare"
