MAN4720 Chapter 8

Most firms enter international markets sequentially, introducing their __________ first.

largest and strongest lines of business

Associations such as the European Union, Organization of American States, and the North American Free Trade Agreement encourage:

regional strategies

International corporate-level strategy focuses on:

the scope of a firm's operations through geographic diversification

Spotnick Enterprises is exploring options for entering into international markets. The key stakeholders have expressed that the primary concern is that Spotnick maintain the maximum amount of control possible in order to protect its proprietary technology. What type of entry would be best for Spotnick?

a greenfield venture

Firms with core competencies that can be exploited across international markets are able to:

achieve synergies and produce high-quality goods at lower costs

The Zolloffe Co. is exploring options for entering into international markets. Time is of the essence. The key stakeholders have expressed that the primary concern is that Zolloffe gain access to new markets as quickly as possible in order to spur corporate growth. What type of entry would be best for Zolloffe?

an acquisition

A global corporate-level strategy differs from a multidomestic corporate-level strategy in that in a global strategy:

competitive strategy is dictated by the home office

Leeway Corp. wants to pursue a business-level international strategy to export to developed countries. Which of the following strategies would Leeway most likely select?

cost leadership

When a firm becomes internationally diversified, the initial impact on returns is that they:

decrease

Internationally diversified firms:

earn greater returns on their innovations through larger or more numerous markets

An international diversification strategy is one in which a firm:

expands into a potentially large number of geographic locations or markets

FanFare United is a global firm with operations in 20 countries. The home office of FanFare United determines the strategies that business units are to use in each country or region. FanFare is applying a multidomestic strategy.

false

While there are multiple means of entering new international markets, firms should use one method consistently with all of its various products and across its different markets in order to reduce administrative complexity.

false

Firms able to continually improve the processes used to produce, sell, distribute, and service their products across country borders enhance their ability to:

learn how to continuously reduce costs while increasing the value of their products

The positive results associated with increasing international diversification have been shown to:

level off and become negative as diversification increases past some point

Disney suffered lawsuits in France, at Disneyland Paris, because of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of the:

liability of foreignness

__________ is the set of costs associated with various issues firms face when entering foreign markets, including unfamiliar operating environments; economic, administrative, and cultural differences; and the challenges of coordination over distances.

liability of foreignness

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are __________ and __________.

liability of foreignness; regionalization

Operating in multiple international markets can provide firms with __________ perhaps even in terms of __________.

new learning opportunities; research and development activities

The four determinants in Porter's model of international competitive advantage include all of the following EXCEPT:

political and economic institutions

In France, fine dressmaking and tailoring have been a tradition predating Queen Marie Antoinette. Cloth manufacturers, design schools, craft apprenticeship programs, modeling agencies, and so forth, all exist to supply the clothing industry. This is an example of the __________ in Porter's model.

related and supporting industries

International strategy refers to a(n):

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

All of the following are correct about what managers should know about firms based in a country with a national competitive advantage EXCEPT:

success is guaranteed as the firm implements its chosen international business-level strategy

A multidomestic corporate-level strategy is one in which:

the firm customizes the product for each country in which it competes

Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ greatly from its home market, instead expanding within the twelve-nation region that includes its home country. Which of the following statements is true?

the firm is using a regional approach to international expansion

Which of the following is an advantage associated with greenfield ventures?

the level of control over the firm's operations

Which of the following is NOT an incentive for firms to become multinational?

to avoid high domestic taxation on corporate income

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

transnational

Effectively implementing the __________ international corporate-level strategy often produces higher performance than does implementing either the __________ or __________ strategies.

transnational; multidomestic; global

A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy. Instead, the actual strategic choices managers make may be the most compelling reasons for success or failure.

true

A major advantage of multidomestic strategies is the ability to customize products and services for the specific market, although this sacrifices economies of scale.

true

A transnational strategy is difficult to use because of its conflicting goals.

true

After a firm decides to compete internationally, it must select its strategy and choose a mode of entry into international markets.

true

By choosing a region where markets are more similar, the firm may be able to better understand those markets and cater to their needs, but also achieve economies through sharing of resources.

true

Four types of distances are associated with the liability of foreignness: cultural, administrative, geographic, and economic.

true

International diversification is a strategy through which a firm expands the sale of its goods or services across the borders of global regions and countries into a potentially large number of geographic locations of markets. Instead of entering one or just a few markets, the international diversification means that the firm enters multiple markets.

true

Michael Porter's determinants of national advantage describe factors associated with the firm's domestic environment that contribute to its dominance in a particular global industry.

true

Rendell Corp. has just entered international markets. While it has begun to see some benefits, it is also challenged by the high cost of transportation and the expense of tariffs. Rendell most likely used exporting as its mode of entry.

true

The global strategy offers greater opportunities to take innovations developed at the corporate level, or in one market, and apply them in other markets.

true

The stabilization of returns through international diversification helps reduce a firm's overall risk.

true

The three basic benefits of international strategies are increased market size, economies of scale and learning, and location advantages.

true

All of the following complicate the implementation of an international diversification strategy EXCEPT:

widespread multilingualism

The decision of what entry mode to use is primarily based on all of the following factors EXCEPT the:

worldwide economic situation