International business FINAL

The norms and value systems of an organization constitutes its

Corporate culture

Which of the following factors limits a firm's ability to use the same marketing message

Cultural differences

A firms failure to understand host country cultural differences that require different approaches to marketing and management is referred to as

Cultural myopia

Megan, a U.S citizen, is the operations manager at the Middle East office of HS Constructions Inc., an American firm. In this situation, she is an example of an

Expatriate manager

Licensing is NOT attractive to which of the following firms

Firms requiring tight control of operations for realizing experience curve and location economies

Which of the following modes of entry into foreign markets can result in a lack of control over quality

Franchising

Which of the following modes of entry is suitable for service firms where the risk of loosing control over the management skills or technological know how is not much of a concern and where the firms valuable asset is their brand name

Franchising

Which of the following is a factor that has contributed to greater retail concentration in developed countries

An increase in car ownership

If a firm is unable to keep its national markets separate, individuals or business may undercut its attempt at price discrimination by engaging in

Arbitrage

Which of the following is a disadvantage of a large scale entry into a foreign market

Availability of fewer resources to support expansion in other desirable markets

Which of the following is an advantage of longer distribution channels

Greater market access

Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets

High costs and risks

Which of the following postulates that top managers typically overestimate their ability to create value from an acquisition

Hubris hypothesis

From a strategic perspective, the key issue in international labor relations is

The degree to which organized labor can limit the choices of an international business

Which of the following is a disadvantage of small scale entry for an international firm considering foreign expansion

The difficulty of building market share and capturing first mover advantages

Which of the following factor helps a firm shorten channel length

The entry of large discount superstores

Which of the following is necessary for a firm to ensure profitable price discrimination

The firm must be able to keep its national markets separate

In terms of expatriate pay, what do firms typically do when a reciprocal tax treaty is not in force

The firm pays the expatriate's income tax to the host country government

A principal concern of domestic unions about multinational firms is that a company can counter it bargaining power with

The power to move production to another country

Spring, an American firm, recently acquired another company, Tavel Inc., in Indonesia. The high level managers at Tavel quit because they could not cope with the domineering and straightforward approach of their American counterparts. This illustrates how acquisitions may fail because

There is a clash between the cultures of the acquired and the acquiring firm

Which of the following is an advantage of acquisitions as a means of entering foreign markets

They are quick to execute and help firms to rapidly build their presence in the target foreign market

In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational

Turnkey project

The members of a cross functional team should have

The ability to contribute functional expertise

Which of the following factors creates a potential market for new products

Affluent consumers

An expatriate manager refers to

A citizen of one country who is working abroad in one of the firm's subsidiaries

Which of the following is an advantage of choosing exporting as a mode of entry into foreign markets?

A firm can avoid the cost of establishing manufacturing operations in the host country

Which of the following is a risk of entering developing nations like India and China on a large scale

Absence of prior foreign entrants

The risks associated with learning to do business in a new culture are less if the firm:

Acquires an established host-country enterprise

Which of the following is an argument against standardized advertising

Advertising regulations may block implementation of standardized advertising

Which of the following is the most common approach to expatriate pay, which equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home

Balance sheet approach

The long term goal for organized labor to establish international trade secretariats was to

Be able to bargain transnationally with multinational firms

Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for companies based in developing nations

Benchmark one's operations and performance against foreign multinationals

Which of the following is an example of an industry in which cross licensing agreements are increasingly becoming common

Biotechnology

How can a wholly owned subsidiary be established in a foreign market

By acquiring an established firm in the host nation

According to Christopher Bartlett and Sumatra Ghoshal, how can local companies differentiate themselves from foreign multinationals

By focusing on market niches

How can firms avoid incurring high transport costs when exporting bulk products

By manufacturing bulk products regionally

Other things being equal, the rate of new product development seems to be greater in countries where

Competition between firms is intense

Which of the following factors constrains a firm's ability to sell a standardized product to a global market using a standardized marketing strategy

Differences in product and technical standards

Which of the following factors constrains the globalization of markets

Differences in technical standards

In the context of strategic pricing, which of the following takes places whenever a firm sells a product for a price that is less than the cost of producing it

Dumping

What kind of demand is seen when a small change in price produces a large change in demand

Elastic

The liability associated with foreign expansion is greater for foreign firms that

Enter a national market early

The probability of survival for an international business increases if it:

Enters a national market after several other foreign fims have already done so

According to Mendenhall and Oddou, what is the major problem in the selection of appropriate candidates for overseas assignments in many firms

Equating domestic performance with overseas performance potential

Which of the following staffing policies is followed by firms that can reduce the issue of compensation to that of how much home country expatriates should be paid

Ethnocentric

Organized labor responds to the increased bargaining power of multinational corporations by trying to

Impose regulations on multinationals through organizations such as GATT

If a firm favors a push strategy, using direct selling to educate potential consumers about the features of its products, what kind of products would it most likely sell

Industrial products

What kind of demand is seen whenever a large change in price produces only a small change in demand

Inelastic

Which of the following is a reason why firms often overpay for the assets of an acquired firm

Interest of more than one party in acquiring a particular firm

Small scale entry into foreign markets make it difficult to build market share because it

Is associated with a lack of commitment demonstrated by the foreign firm

In international business, a product that is not widely available in a foreign market and satisfies an unmet need

Is likely to have a greater value

Why do firms pursuing global standardization or transnational strategies tend to prefer establishing wholly owned subsidiaries?

It allows firms to use the profits generated in one market to improve its competitive position in another market

In the terms of expatriate pay, which of the following is a characteristics of a foreign service premium

It compensates expatriates for having to live in an unfamiliar country

Which of the following is true of price discrimination

It involves charging whatever the market will bear

Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets

It is a useful strategy to earn great returns from the know how of a technologically complex process

Which of the following is a disadvantage of franchising

It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser

In terms of expatriate pay, which of the following is true of a foreign service premium

It is paid as a percentage of base salary, with 16 percent being the average premium

In the context of international labor relations, which of the following is true of organized labor

It limits a firms ability to integrate and consolidate its global operations

Which of the following is an important attribute for a product development team to function effectively and meet all of its development milestones

It should be led by a "heavy weight" project manager who has high status within the organization

Axiom international, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different . The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also would be politically acceptable. Which of the following modes of entry intro foreign markets is most suitable for Axiom International

Joint venture

Which of the following is a drawback of licensing as a mode of entry into foreign markets

Licensing does not give a firm tight control over manufacturing, marketing, and strategy

Which of the following refers to choices about product attributes, distribution strategy, communication strategy, and pricing strategy that a firm offers its targeted markets

Marketing mix

Which of the following is true of Theodore Levitt's arguments concerning the globalization of world markets

Modern transportation is facilitating a convergence of tastes and preferences among consumers in advanced countries of the world

Which of the following refers to the fact that a firms pricing strategy in one market may have an impact on its rivals pricing strategy in another market

Multipoint pricing

Which of the following factors determines the value that an international business can create in a foreign market

Nature and indigenous competition

In terms of communication strategy, in highly developed countries such as the United States

Noise is extremely high

Which of the following exists whenever consumers in different countries are charged different prices for the same product

Predatory pricing

Which of the following marketing strategies relies on access to advertising media

Pull strategy

Which of the following is a reason why a relatively poor country may be an attractive target for inward investment

Rapid economic growth

Why should a high tech firm avoid selecting licensing as a mode of entry

Risk of loosing control over technology

According to Mendenhall and Oddou, which of the following dimensions that predicts success in a foreign market posting stregthens an expatriates self esteem, self confidence, and mental well being

Self orientation

According to Mendenhall and Oddou, which of the following is a dimension that predicts and allows expatriates to adapt their interests in food, sport, and music

Self orientation

Franchising as a mode of entry into foreign markets is employed primarily by

Service firms

Which of the following types of entry into a foreign market allows a firm to learn about the foreign market while limiting the firm's exposure to that market

Small scale entry

When are the effects damaging for an international business

When potential consumers in a target country have a bias against foreign firms

In which of the following situations can an international business command higher prices for a particular product in a foreign market

When the product offers greater value to customers in the foreign market

Which of the following entry modes into a foreign market best serves a high tech firm

Wholly owned subsidiaries

Jupiter Systems is a high tech firm looking to set up operations in a foreign country. The firm's core competency is in technological know how. Which of the following modes of entry would be most favorable to the firm if it wants to keep a tight control over its technology

Wholly owned subsidiary

What triggers the conflict of interest over strategy and goals in joint ventures?

shifts in relative bargaining power of venture partners