ISP
An unstructured but in-depth interview of a small group of individuals by a moderator to learn the group's attitudes about a company or its products is called a ________.
focus group
Businesspeople seeking to understand more about another culture in order to successfully conduct business within that culture would be best advised to do which of the following?
Observe the behavior of people who have gained respect within that cultural environment
________ implies that for a given business activity, some firms may be more skilled in accomplishing this activity than other firms.
Resource heterogeneity
________ in the RBV are defined as the tangible and intangible assets that a firm controls that it can use to conceive and implement its strategies.
Resources
When conducting a _______________, it's best to examine both PESTEL and Porter's five forces analyses because these tools focus on the external environment.
SWOT analysis
In the aircraft manufacturing industry, at least for large commercial jets, Boeing and Airbus are the only competitors. There is not a significant threat of entry because
entering the aircraft manufacturing industry requires huge capital investments.
Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will be successful today only if its
internal strengths change with its external environment in a dynamic fashion.
A(n) ________ advantage is the one that a company gains from incorporating a business activity within itself rather than leaving it to a relatively inefficient market.
internalization
________ is the belief that only individuals and private groups should control a nation's political activities.
Anarchism
Buzztronic is a market leader in consumer electronics. If Ficolee and Ficola, companies that manufacture televisions, develop the same customer knowledge base and create products with the same customer appeal as Buzztronic, then
Buzztronic will have a resource that is valuable but no longer rare.
Which of the following factors most contributes to the U.S. automotive industry being characterized by high entry barriers?
Car manufacturers require large-scale production in order to be cost-competitive.
________ consists of specific learned norms based on attitudes, values, and beliefs of a group of people.
Culture
Which of the following terms is used to refer to habits or ways of behaving in specific circumstances that are passed down through generations?
Customs
_____ is advantageous because it avoids the cost of establishing manufacturing operations in the host country and it may help a firm achieve experience curve.
Exporting
A company that wants to enter a new geographic market within China or Saudi Arabia should avoid joint ventures with companies that are based in that country. Partnering with a foreign entity props up that entity's business rather than weakening it through competition.
FALSE
A wholly owned subsidiary limits a firm's control over marketing and sales in different countries.
FALSE
Interviews and focus groups are two main sources of secondary data that help managers make informed decisions.
FALSE
Portfolio investment is the purchase of physical assets of a company in another country to gain a degree of management control.
FALSE
The process of collecting and analyzing original data and applying the results to current research needs is called primary market research.
TRUE
_____ are the advantages associated with entering a market early.
First-mover advantages
There are several disadvantages of franchising as an entry mode. Which of the following is one of them?
Franchising may inhibit the firm's ability to take profits out of one country to support competitive attacks in another.
Gadgets, Inc., wants to enter a foreign market on a small scale. This will allow it to learn about the market while limiting the firm's exposure to that market.
TRUE
Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges?
Individualism
Which of the following is true of a "follow the leader" scenario in the context of foreign direct investment?
It is a frequent practice in industries with a limited number of large firms.
Within the VRIO framework, resources and capabilities that are not valuable are also known as weaknesses.
TRUE
In nearly every case, which of the Five Forces is the most important in determining the relative power structure in an industry?
No single force is dominant in most every case.
The ________ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment.
PESTEL framework
In the context of the resource-based model of competitive advantage, which of the following scenarios best exemplifies resource immobility?
PaluniInc. has been able to outperform its competitors because the uniqueness of its employee experience is difficult for competitors to replicate.
Which of the following statements regarding patents is accurate?
Patents may decrease, rather than increase, the costs of imitation.
According to Hofstede's framework, people generally prefer little consultation between superiors and subordinates in cultures where ________ is high.
Power distance
________ are those that use outdated and obsolete technologies or employ low-wage workers with few skills.
Sunset industries
In which of the following situations is the power of suppliers high in an industry?
Suppliers' industry is more concentrated than the industry it sells to.
A small used tire shop faces significant potential competition because of the low capital requirements compared with business environments such as universities and laboratories.
TRUE
Which of the following is true of licensing?
The firm does not have to bear the development costs and risks associated with opening a foreign market.
The government maintains control over the banking industry in a country. Which of the following is most likely true if the country has a mixed economy?
The government considers banking sector as important to national security.
Against Betty's judgment, her boss decides to market Frankfurter's beef sausages in the town of Xunagshi, believing that it would rake in a huge profit. Which of the following, if true, would prove that her boss's decision is a bad one?
Xunagshi has a large Hindu population, all of whom are forbidden from eating beef.
Yubaba Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. Axe Inc., a supermarket chain, follows a multidomestic strategy. Which of the following statements is most likely true of this scenario?
Yubaba Inc. will sell the same products in both domestic and foreign markets, whereas Axe Inc. will customize its product offerings to suit local requirements.
Entertainment 720 Inc. operates in 20 countries around the globe. The company clearly understands that the skin and hair type of customers varies from one country to another. Consequently, its products are customized to suit local needs and preferences of customers, even though the costs incurred while producing these products are exceptionally high. This strategy helps the company behave as a local firm in a foreign market. In this scenario, which of the following strategies does Entertainment 720 most likely implement?
a multidomestic (or localization) strategy
Which of the following is the best characterization of sociocultural forces?
a society's culture, norms, and values
Rainholm Industries is a large snack-food conglomerate that operates in more than 50 countries and employs more than 80,000 people across the world. It operates through multiple regional product divisions, which tend to function as autonomous profit-and-loss centers. This allows the company to reap significant economies of scale. Though each division acts as an autonomous firm with its individual regional leaders, frequent sharing of knowledge between the divisions allows for global learning. These factors help the company reconcile product and service differentiations at low cost. Which of the following strategies does Rainholm Industries most likely use?
a transnational strategy
Hooper's Store, a luxury motorcycle company, sells the same motorcycles and offers the same superior services in both its home country and foreign markets. The market it operates in faces low pressures for both local responsiveness and cost-reductions. Which of the following strategies within the integration-responsiveness framework does Hooper's Store most likely pursue?
an international strategy
Countries differ significantly in their cultures, politics, laws, and economies. International managers must work to understand these differences and to incorporate their understanding into market- and site-selection decisions. Which of the following steps of the market screening process involves an evaluation of the government bureaucracy?
assessment of the national business environment
Which of the following steps of the market screening process involves examining the cost of transporting goods?
assessment of the national business environment
A firm's marketing skills and teamwork as well as its cooperation among managers are examples of
capabilities.
Organizational and managerial skills that find their expression in a company's structure, routines, and culture are referred to as
capabilities.
Which of the following philosophies asserts that ownership of the means of production belongs in the hands of individuals and private businesses?
capitalism
If a firm's resources and capabilities are costly to imitate because imitating firms may not understand the relationship between the resources and capabilities controlled by a firm and that firm's competitive advantage, this competitive advantage is said to be protected from imitation by
causal ambiguity.
When developing a market-potential indicator for an emerging market, the ________ factor attempts to assess channels of distribution and communication.
commercial infrastructure
The U.S. legal system is largely based on ________.
common law
A greenfield investment is another name for a company's decision to ________.
construct a new facility in a foreign market
Frozen Gold is a fast-growing chain of ice cream shops. It has acquired an edge over its competitors through its ability to provide a wide array of unique flavors and a hip atmosphere in stores. This advantage of Frozen Gold best exemplifies a
core competency.
A ________ is a political system in which government leaders are elected directly by the wide participation of the people or by their representatives.
democracy
In a firm's external environment, ________ trends primarily capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class.
demographic
Tesla is addressing environmental concerns regarding the carbon emissions of gasoline-powered cars by building zero-emission battery-powered vehicles. This best represents which of the following PESTEL categories?
ecological
Vinny, the CEO of Rainholm Industries is looking to employ a ________ strategy, which would take advantage of economies of scale and location economies. He wishes to pursue and establish a global division of labor based on wherever best-of-class capabilities reside at the lowest possible cost for Rainholm Industries.
global standardization
Blue Cat Inc., a manufacturer of high-technology medical devices, has its product development centers located in the United States and South Korea. The manufacturing units are located in China and the Philippines to benefit from low labor costs and access to original equipment manufacturers. This allows the company to competitively price its devices. Also, the various phone models sold by the company are uniform in all the foreign markets it operates in. In this scenario, which of the following strategies does Blue Cat most likely pursue?
global-standardization strategy (or global strategy)
Which of the following is a major driver of foreign direct investment?
globalization
Ownership restrictions and performance demands are used by ________.
host countries to restrict FDI
The first step in the screening process for potential markets and sites is to ________.
identify the basic appeal of a market
Partnerships between a government and a host company in the context of foreign direct investment lead to ________.
increased market access for the host company
In ________ cultures, economic systems tend to provide incentives and rewards for a person's private business initiatives.
individualist
Which of the following is an income-elastic product?
jewelry
In many countries, political considerations make _____ the only feasible entry mode.
joint ventures
Economies of scale are cost advantages that accrue for firms with
larger output.
Walmart sells live animals (snakes, eels, toads, etc.) for food preparation in China whereas IKEA sells kimchi refrigerators and metal chopsticks in South Korea. These examples illustrate the need for ________ which often requires the competing firm to tailor their products and services to meet the needs of the market in which they are competing.
local responsiveness
When a firm is facing high pressure for local responsiveness and low pressure for cost-reductions, the firm is likely to adopt a(n) ________ strategy according to the integration-responsiveness framework.
localization (or multidomestic)
According to Hofstede's framework, a culture that scores low on ________ can change more rapidly because tradition and commitment are not impediments to change.
long-term orientation
According to Hofstede's framework, cultures that score high on ________ value respect for tradition, thrift, and perseverance, and have strong work ethics.
long-term orientation
Firms entering a market via a _____ must bear all the costs and risks associated with the venture.
wholly owned subsidiary
The possibility that a company will create a future competitor by charging another company for access to its knowledge is a(n) ________ that can encourage FDI.
market imperfection
The ________ theory states that when an aspect of the market makes a transaction less efficient than it could be, a company will undertake foreign direct investment to internalize the transaction and thereby remove the efficiency-reducing aspect.
market imperfections
The ________ theory states that a firm tries to establish a dominant presence in an industry by undertaking foreign direct investment.
market power
Which of the following variables attempts to estimate market openness when creating a market-potential indicator for an emerging market?
market receptivity
Genco Pura Olive Oil Company has established themselves as a strong differentiator in their respective SBUs but now wishes to explore international strategies. They are prepared to fully customize their product offerings to meet the needs of the foreign country that they are entering; having conducted many surveys on local preferences, tastes, and requirements, the Genco Pura Olive Oil Company will more than likely pursue a ________ strategy.
multidomestic (or localization)
According to the international product life cycle theory, in which of the following stages is a good produced in the home country because of uncertain domestic demand and to keep production close to the research department?
new product stage
In a totalitarian political system, ________.
one agent monopolizes political power
According to Porter's Five Forces approach, the overall goal of applying the Five Forces analysis to an industry is to make a judgment about its
overall attractiveness.
A process is said to be ________ when events early in the evolution of a process have significant effects on subsequent events.
path dependent
Which of the following methods is used by a host country to restrict incoming foreign direct investment?
performance demands
Value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups:
primary activities and support activities.
The "Natural Nourishment" granola bars manufactured by Global Good Foods have been the top-selling granola bars in the market. Though the market for granola bars is flooded with competitors, Global Good has been able to maintain its market position for a long time. This is mainly attributed to the pleasant texture of its granola, which comes from a proprietary processing technique used by the company. This competency of Global Good Foods will be considered as a(n) _____ resource in the VRIO framework.
rare
ESPN's development of an extensive offering of X-Games coverage that is unmatched by any other sports outlet is an example of which element of the VRIO framework?
rarity
Home nations discourage foreign direct investment outflows because it ________.
replaces jobs in the home nation
The process of obtaining information that already exists within the company or that can be obtained from outside sources is called ________.
secondary market research
During which stage of the market or site screening process do managers normally want to visit locations?
selection of the market or site
Which of the following is the final step in the screening process for potential markets and sites?
selection of the market or site
Which of the following stages of the market or site screening process involves competitor analysis?
selection of the market or site
In recent years a growing number of U.S. consumers have become more health-conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a ________ trend.
sociocultural
Firms that possess and exploit costly-to-imitate, rare and valuable resources in choosing and implementing their strategies may enjoy a period of
sustained competitive advantage.
We Ensure Inc., an insurance firm, replaced its existing project management software with new software from another supplier. Since the new software has different features and abilities, We Ensure has had to spend $10,000 on training its employees to use it. In this scenario, $10,000 represents We Ensure's
switching cost.
If a resource or capability is valuable and rare but not costly to imitate, exploiting this resource will generate a(n)
temporary competitive advantage.
STRIKEBYTE Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE Inc. will best enable it to gain and sustain a competitive advantage?
the expertise acquired by the employees in the company
Central planning is rooted in the ideology that ________.
the welfare of a group is more important than individual well-being
Scenario: The French Government has placed many restrictions upon the use of the English language within their borders. They argue that the inflow of English movies, music, and literature is responsible for the dilution of their rich culture. Their argument is vulnerable to criticism because ________.
they fail to take other social and cultural factors into account
The internet service provider industry in the country of Wakanda is an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms. Thus, in the internet service provider industry, the
threat of new entrants is most likely low.
When developing a market-potential indicator for an emerging market, the size of the market is typically estimated from the nation's ________.
total population
Konesia is a country whose political leaders do not tolerate opposing viewpoints and often suppress or punish dissidents. The lives of Konesians are tightly controlled by its rulers. Which of the following political systems prevails in the country?
totalitarianism
Which of the following political ideologies states that every aspect of people's lives must be controlled for a nation's political system to be effective?
totalitarianism
In ____, the contractor agrees to handle every detail of the project for a foreign client, including the training of operating personnel.
turnkey projects
According to Hofstede's framework, managers should be more precise in their directions to subordinates when ________.
uncertainty avoidance is high
WeComput Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled WeComput Inc. to increase its profitability by lowering its production costs. Thus, WeComput's competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework.
valuable
Coca-Cola has collaborative arrangements whereby it produces concentrate that it sells to other companies to bottle its drinks. Which of the following terms best describes this type of arrangement?
vertical integration
Which of the following features about a buyer indicates that the buyer has high bargaining power?
when the buyer operates in an industry where products are undifferentiated