mgt 487 ❋ final

*A publishing company is making far more money from its magazines and journals, so it has decided to downscope its book business, which will enable it to focus exclusively on new developments and growth in magazines and journals. What is the long-term outcome of the firm's decision?* a. Lower performance b. Higher performance c. Reduced workforce d. Higher risk

Higher performance

*The short-term outcomes of downscoping include reduced debt costs and an emphasis on strategic controls. What is the long-term outcome that results from the short-term outcomes?* a. Higher risk b. Higher performance c. Lower performance d. Loss of human capital

Higher performance

*Which of the following is NOT a managerial function for top-level executives during the acquisition process?* a. Searching for viable acquisition candidates b. Identifying and pursuing other opportunities with external stakeholders c. Preparing for negotiations d. Managing the integration process after the acquisition

Identifying and pursuing other opportunities with external stakeholders

*A firm owns a wide variety of consumer goods businesses. Its portfolio includes a grocery store, shoe store, and gas station. How might the diversification of its businesses impact its ability to have successful acquisitions?* a. Managers are unequipped to evaluate the success of businesses on a deeper level than finances b. Managers are too focused on new acquisitions to maintain the success of the firm's current businesses c. The firm is used to service-based businesses d. Managers have been successful at juggling several different businesses

Managers are unequipped to evaluate the success of businesses on a deeper level than finances

*Which of the following statements does NOT describe a challenge associated with the integration process of an acquisition?* a. Meld two or more similar businesses' cultures b. Link different financial and control systems c. Build effective working relationships d. Determine the leadership structure and those who fill it for the integrated firm

Meld two or more similar businesses' cultures

*Strategic competitiveness is achieved when a firm manages political, economic, and other risks while implementing its international strategies. The degree to which a firm achieves strategic competitiveness through international strategies is increased when they successfully implement...* a. a national diversification strategy b. an international expansion strategy c. an international diversification strategy d. political and economic risk analysis

an international diversification strategy

*Disney bought Pixar to extend and begin a new partnership in its renewed focus on animation. Steve Jobs, the CEO of Pixar at the time, vowed to preserve the independent nature of Pixar. Since then, the two have put out hits such as the Toy Story, The Incredibles, and Nemo franchises. This partnership is an example of a(n)...* a. merger b. acquisition c. joint venture d. strategic alliance

merger

*In what international strategy are strategic and operating decisions decentralized to the strategic business units in individual countries or regions in order to allow each unit the opportunity to tailor its products to the local market?* a. International business-level b. Transnational c. Multidomestic d. Global

multidomestic

*The 4 determinants of national advantage are factors of production; demand conditions; firm strategy, structure, and rivalry; and...* a. nature and size of domestic market b. related and supporting industries c. factors of distribution d. unrelated industries

related and supporting industries

*A company is looking to expand internationally in the least costly way as possible. Which entry mode should it choose?* a. Licensing b. Exporting c. A greenfield venture d. A cross-border acquisition

licensing

*A common reason firms enter cross-border strategic alliances is...* a. complete control over their foreign operations b. limited domestic growth opportunities and foreign government economic policies c. abundance of domestic growth opportunities and foreign government economic policies d. help from domestic partners from an operational perspective

limited domestic growth opportunities and foreign government economic policies

*Which of the following characteristics can be used to describe licensing as an entry mode?* a. Low risk b. Shared costs c. Maximum control d. Time consuming

low risk

*Two craft stores have just been bought by craft giant Ultimate Crafts. By rebranding the small stores, Ultimate Crafts' executives hope to gain strategic competitiveness in what way?* a. Diversification b. Market power c. Developing new capabilities d. Decreasing debt

market power

*The need to create _____ for stakeholders is a primary influence on a firm's decisions to engage in merger and acquisition activity* a. growth b. value c. profitability d. shares

value

*Southern Poultry, a large poultry operation, has agreed to be acquired by its' best customer, Chicken 'N Biscuits, a chain of fast-food restaurants, to ensure the long-term health of the operation. This type of acquisition is called...* a. a takeover. b. a vertical acquisition. c. a horizontal acquisition. d. a merger.

vertical acquisition

*What is explicit collusion?* a. A competition-reducing strategy where firms indirectly coordinate their production & pricing decisions by observing each other b. A competition-reducing strategy where 2 or more firms negotiate directly to determine the amount to produce and the prices c. A competition-reducing strategy in which firms do not take competitive actions against rivals d. A competition-reducing strategy in which firms share some of their resources from different stages of the value chain

A competition-reducing strategy where 2 or more firms negotiate directly to determine the amount to produce and the prices

*When would a firm choose to downsize rather than downscope?* a. A firm has excess resources after acquiring another firm b. A firm wants to cut businesses that are unrelated to its core business c. A firm wants to correct managerial mistakes d. A firm wants to build resources and expand operations

A firm has excess resources after acquiring another firm

*What is an international diversification strategy?* a. A strategy through which a firm expands the sales of its goods across the borders of global regions and countries into a potentially large number of geographic locations or markets b. An international strategy through which the firm seeks to achieve both global efficiency and local responsiveness c. An international strategy in which decisions are decentralized to the business units in individual countries/regions for allowing each unit the opportunity to tailor its products to the local market d. A strategy through which the firm sells its goods outside its domestic market

A strategy through which a firm expands the sales of its goods across the borders of global regions and countries into a potentially large number of geographic locations or markets

*How are shareholders are affected by acquisitions?* a. Acquired firms' shareholders often earn above-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn below-average returns b. Acquired firms' shareholders often earn above-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn returns that are close to zero c. Acquired firms' shareholders often earn below-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn above-average returns d. Both acquired and acquiring firms' shareholders often earn above-average returns

Acquired firms' shareholders often earn above-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn returns that are close to zero

*A jewelry firm has recently acquired its gem supplier. The jewelry firm prides itself on always being the first to predict new trends. Which of the following attributes of the firm helps it to maintain a long-term competitive advantage in markets?* a. Merged firm maintains a low to moderate debt position b. Acquisition is friendly c. Acquiring firm has financial slack d. Acquiring firm has a sustained and consistent emphasis on research and development (R&D) and innovation

Acquiring firm has a sustained and consistent emphasis on research and development (R&D) and innovation

*Which of the following is an attribute of a successful acquisition?* a. Merged firm maintains moderate to high debt position b. Acquisition is unfriendly c. Acquiring firm conducts ineffective due diligence to select target firms and effectively evaluate the target firms' health d. Acquiring firm has financial slack

Acquiring firm has financial slack

*Which cooperative strategy is the most costly to implement?* a. Corporate-level cooperative strategy b. Business-level cooperative strategy c. Strategic alliance d. Network cooperative strategy

Corporate-level cooperative strategy

*When a company in a cooperative strategy is implementing mechanisms to ensure that its partner does not use its trade secrets outside the relationship, a firm is practicing which cooperative strategy management practice?* a. Cost maximization b. Cost minimization c. Opportunistic minimization d. Opportunity maximization

Cost minimization

*A firm in France that makes loafers has decided to expand its operation to the US. The firm has decided to partner with a US shoe manufacturer to produce the loafers. What type of strategic alliance would best fit the partnership?* a. Synergistic b. Diversifying c. Franchising d. Business

Diversifying

*_______ generally leads to more positive outcomes in both the short and long term* a. Downsizing b. Downscoping c. A leveraged buyout d. A non-leveraged buyout

Downscoping

*Based on the various long-term outcomes, which restructuring strategy is the least recommended to implement?* a. Downsizing b. Leveraged buyouts c. Downscoping d. Corporate restructure

Downsizing

*Tommy's Toys has seen declining profits over the past decade. The firm has decided to close all its stores and move to online-only. Although it will need to expand its warehouse operations by about 100 employees, it will be eliminating approximately 500 retail sales employees. What is this restructuring strategy called?* a. Downscoping b. A leveraged buyout c. Downsizing d. Restructuring

Downsizing

*MarTech must constantly develop products and seek new markets. Its products are made up of a combination of hardware, requiring multiple component parts, and software which is regularly updated. What type of alliance network will MarTech use in order to develop additional advantages?* a. A stable alliance network b. A joint venture alliance network c. A dynamic alliance network d. A nonequity alliance network

Dynamic alliance network

*The long-term outcomes of a leveraged buyout are higher performance and higher risk. What two short-term outcomes lead to these long-term outcomes?* a. Reduced labor costs and reduced debt costs b. Reduced debt costs and emphasis on strategic controls c. Emphasis on strategic controls and high debt costs d. Reduced labor costs and high debt costs

Emphasis on strategic controls and high debt costs

*A company is considering entering the global market. It is looking for a cost-effective method to work with a company that is already in the host country. Which mode of entry should they choose?* a. Exporting b. Setting up a greenfield venture c. Entering into a strategic alliance d. Making a cross-border acquisition

Entering into a strategic alliance

*Because the resources and relationships among partners is complex, most R&D strategic alliances are what type?* a. Equity b. Nonequity c. Cross-border d. Joint venture

Equity

*A stable alliance network is formed primarily to do what?* a. Explore new ideas that may lead to product innovation b. Allow partners to develop new markets c. Exploit economies of scale and/or scope between the partners d. Enable partners to gain entry into new markets

Exploit economies of scale and/or scope between the partners

*Germany is known for its technical training system, with an emphasis on continuous product and process improvements. If Germany did not have such a system, it would lack which determinant of national advantage?* a. Firm strategy, structure, and rivalry b. Demand conditions c. Related and supporting industries d. Nature and size of domestic market

Firm strategy, structure, and rivalry

*What are advantages of a vertical complementary strategic alliance versus a horizontal complementary strategic alliance?* a. Firms can share resources for separate parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain b. Firms can share resources for the same parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain c. Firms can prevent their partners from having access to their most valuable resources, which helps them prevent opportunistic behavior by their partners d. A firm can give its partner access to its most valuable resources, which enables both partners to maximize its success

Firms can share resources for separate parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain

*Which of the following is a positive effect of downscoping?* a. Firms have fewer employees that they have to compensate b. Managerial effectiveness decreases c. Firms spend less in operations costs d. Firms refocus on their core business

Firms refocus on their core business.

*If firms did not participate in cross-border strategic alliances, what might happen for firms expanding internationally?* a. Firms would be more successful in entering foreign markets because they would be minimally influenced by other firms b. Firms would be more successful in their domestic markets because they would not be as concerned with establishing a foreign market c. There would be no measurable impact if firms did not implement cross-border strategic alliances d. Firms would struggle to implement international strategies without the ability to use the resources and expertise of local firms in the foreign markets they were trying to enter

Firms would struggle to implement international strategies without the ability to use the resources and expertise of local firms in the foreign markets they were trying to enter

*How can firms implementing an international strategy become limited by diversification?* a. Too many consumer cultures start to mirror one another as customers mold themselves to demand the same thing as a result of international diversification of the same products b. Eventually, too many firms implement an international diversification strategy for similar products, making the market too saturated for any firm to be successful c. Greater geographic dispersion across borders results in increased costs of coordination between units and distribution of products d. As a firm becomes more geographically dispersed, it loses its ability to keep track of its operations

Greater geographic dispersion across borders results in increased costs of coordination between units and distribution of products

*Risks associated with cooperative strategies include a partner's failure to present its resources to the other, as well as one firm acting opportunistically towards the other with the use of the partner's resources. How can these two risks be a result of each other?* a. If a firm acts fairly towards its partner, the partner might misrepresent its resources to keep them from gaining any more access b. If one firm feels that the other will act opportunistically, it might withhold its promised resources to keep the partner from gaining access to proprietary information c. If one firm presents its resources first, the other will not present its resources to compete against the partner d. When one firm doesn't present its resources, it is likely that it is going to try to act opportunistically towards its partner

If one firm feels that the other will act opportunistically, it might withhold its promised resources to keep the partner from gaining access to proprietary information

*A large software company is acquiring a small tech startup that has built an app for developers to code websites on their smartphones. It is rumored the software company grossly overestimated the future growth as a result of the acquisition. If this is true, what common acquisition problem has the software company encountered?* a. Integration difficulties b. Inability to achieve synergy c. Too much diversification d. Inadequate evaluation of target

Inadequate evaluation of target

*The main objective of the collaborating firms in a cooperative strategy is to...* a. increase competitive advantage b. neutralize each other's competitive advantage c. decrease the other's competitive advantage d. decrease both partners' competitive advantage

Increase competitive advantage

*What are the 3 basic benefits that firms can enjoy by successfully using international strategies?* a. Increased market size, increased economies of scale and learning, development of a competitive advantage through location b. Decreased market size, decreased economies of scale and learning, development of a competitive disadvantage through location c. Increased market size, decreased economies of scale and learning, development of a competitive advantage through location d. Decreased market size, increased economies of scale and learning, development of a competitive disadvantage through location

Increased market size, increased economies of scale and learning, development of a competitive advantage through location

*A large car manufacturer has cut all but two of the employees in its marketing department to save money and return to profitability. What is the likely long-term outcome of this move?* a. Loss of human capital and lower performance b. Loss of human capital and higher risk c. Higher performance and higher risk d. Lower performance and higher risk

Loss of human capital and lower performance

*Which of the following is the result of a merged firm that maintains a low to moderate debt position?* a. Lower financing cost b. Higher risk c. Inevitable trade-offs that are associated with high debt d. Maintenance of long-term competitive advantage in markets

Lower financing cost

*If Ikea used a multidomestic strategy in which it practiced global efficiency and local responsiveness instead of its current successful global strategy, what would be the most likely outcome?* a. It would sacrifice the efficiency of centralized operations and distribution, which could affect its cost position, potentially driving up costs and prices b. It would need less time to open stores in other countries based on speedy research of prime locations c. Its products would stay the same, with the quirky Swedish selection Ikea currently offers d. Its products would be even harder for customers to build themselves upon purchase

It would sacrifice the efficiency of centralized operations and distribution, which could affect its cost position, potentially driving up costs and prices

*A firm seeks to implement an international strategy in an unfamiliar location. The firm is unaware of the economics and cultural preferences of the location. The firm is influenced by which environmental trend?* a. Insensitivity to foreign culture b. Liability of foreignness c. Regionalization d. Localization

Liability of foreignness

*A firm created a game that is customized for many different locations. The company has expanded its local markets in many locations in several countries. Because each location does so much on its own, the corporation doesn't share knowledge internally because of the differences across markets, decentralization, and the different international business-level strategies employed by local units. It has not been able to develop economies of scale. What strategy is the company using?* a. Transnational strategy b. Multidomestic strategy c. Global strategy d. International strategy

Multidomestic

*In what strategy do several firms form multiple partnerships to reach their shared objectives?* a. Complementary strategic alliance b. Cross-border strategic alliance c. Network cooperative strategy d. Uncertainty reducing strategy

Network cooperative strategy

*A convenience store chain recently implemented an international diversification strategy by opening stores in new countries. As a US company, the chain is still learning how to manage its new geographical diversification. Six months in, the firm has seen a drop in its return on investment. Should executives be concerned?* a. Yes, the firm should see a quick increase in return on investment since there are more stores b. No, typically when a firm implements an international diversification strategy, its return on investment decreases initially and then increases quickly as the firm learns how to manage the increased geographical diversification it has created c. No, the firm should see its return on investment drop and then increase gradually to match its return on investment before implementing an international diversification strategy d. Yes, the firm should have kept its previous rate of return on investment before implementing an international diversification strategy

No, typically when a firm implements an international diversification strategy, its return on investment decreases initially and then increases quickly as the firm learns how to manage the increased geographical diversification it has created.

*A car manufacturer and its partner in a cooperative strategic alliance have minimal contract terms. Both firms are hoping to learn from each other to develop new, innovative products. By implementing few contractual terms in their alliance, the two firms are managing their cooperative strategy using which approach?* a. Cost maximization b. Cost minimization c. Opportunity maximization d. Opportunity minimization

Opportunity maximization

*How is an opportunity maximization approach a more effective than the cost minimization approach of cooperative strategy?* a. Opportunity maximization comes with a high level of trust between partners, which leads to an increased likelihood of success b. Opportunity maximization enables firms to decrease their cost structure, which leads to an increased likelihood of success c. Opportunity maximization leads to more contractual obligations for each partner, which leads to an increased likelihood of success d. Opportunity maximization allows firms to take advantage of each other's resources without limitations imposed by one another

Opportunity maximization comes with a high level of trust between partners, which leads to an increased likelihood of success

*To remain relevant, firms must explore opportunities to maintain their competitive advantage. In doing so, some opportunities may be out of reach of the firm's normal capabilities. By entering into strategic alliances, how can a firm achieve competitive advantage?* a. Partnering with another firm in a strategic alliance and trading valuable resources enables both firms to further develop their products or markets to gain competitive advantage b. Both firms can achieve competitive advantage over one another, by using each other's most valuable resources c. Both firms can behave opportunistically towards one another to keep the other from gaining competitive advantage d. One firm can gain competitive advantage by taking advantage of its partner's resources and giving its partner less valuable resources

Partnering with another firm in a strategic alliance and trading valuable resources enables both firms to further develop their products or markets to gain competitive advantage

*Your company is conducting a political risk analysis before signing a contract to transport equipment within a South American country. Which of the following findings in the political risk analysis would indicate that the company should NOT sign the contract?* a. Potential nationalization of invested assets b. Devaluation of the country's currency c. Uncertain prices for critical commodities d. High government debt

Potential nationalization of invested assets

*The strategy through which a firm changes its set of businesses or its financial structure is called...* a. downsizing b. restructuring c. an acquisition d. a merger

Restructuring

*U.S. Elite has decided to implement an international strategy in China. The firm is looking to grow manufacturing and start selling internationally while increasing its competitive advantage in the process. Why is a cross-border strategic alliance the most effective option?* a. The alliance enables U.S. Elite to share resources for manufacturing and knowledge about the Chinese market b. The alliance keeps U.S. Elite from sharing resources with Chinese manufacturers to help them with manufacturing c. The alliance gives U.S. Elite minimal responsibility for its foreign operations in China d. The alliance gives the Chinese manufacturer sole control of U.S. Elite operations

The alliance enables U.S. Elite to share resources for manufacturing and knowledge about the Chinese market

*When a firm takes over another firm in an unfriendly acquisition process, what is a challenge to its future success?* a. The firm will have a high probability of synergy and competitive advantage by maintaining strengths b. The firm will struggle to maintain long-term competitive advantage in markets c. The firm will struggle to effectively integrate its operations d. Financing will be harder to obtain

The firm will struggle to effectively integrate its operations

*A software firm has formed a cooperative strategic alliance with a startup to develop the startup's product, an app. The startup promised to connect the software firm with other startup companies looking for software services. So far, the startup has not followed through, while the software firm has neared completion of its portion of the app development. Which risk has manifested in the alliance?* a. The software firm has misrepresented its resources to the startup b. The startup has failed to make its resources available to the software firm c. The software firm has failed to make its resources available to the startup d. The startup is acting opportunistically towards the software firm

The startup has failed to make its resources available to the software firm.

*Ronson Foods, which operates 400 supermarkets in 12 states in the northeastern United States, is considering acquiring East Coast Organics, a small chain of 26 specialty food stores. While many see the potential in this acquisition, some analysts worry about the integration process following the acquisition. What is a difference between the two that might cause difficult integration?* a. East Coast Organics has a smaller share of the market b. Both firms are experiencing financial instability c. Ronson Foods and East Coast Organics have been competing in the same domestic market d. There may be cultural differences in operations between the two firms

There may be cultural differences in operations between the two firms.

*Why would firms choose to use complementary strategic alliances?* a. To reduce competition b. To launch competitive responses to their competitor's actions c. To expand operations d. To focus on long-term product development and distribution opportunities

To focus on long-term product development and distribution opportunities

*A software firm that has developed online courses for web development has decided to partner with a computer manufacturer to build a laptop with a special keyboard and interface elements for web development. The idea came after a competitor implemented a similar strategy. What is a motive for the education and computer firms to implement a cooperative strategy?* a. To minimize their rivals' returns b. To gain a higher a price point than their rivals c. To outperform rivals with a similar idea d. To neutralize competition with rivals

To outperform rivals with a similar idea

*Why would a firm in a standard-cycle market want to pursue a strategic alliance?* a. To gain access to a restricted market b. To speed up new market entry c. To share risky R&D expenses d. To overcome trade barriers

To overcome trade barriers

*An American sandal company has completely saturated its local market. The sandals have started to build a demand in Australia, a market the company is unfamiliar operating in. Why might the sandal company enter into a cooperative strategy with an Australian firm?* a. To explore export options from the United States to Australia b. To give responsibility of the company's expansion to the Australian firm c. To share unique resources to design, produce, and launch the product in Australia d. To take advantage of the Australian company in a hostile takeover

To share unique resources to design, produce, and launch the product in Australia

*Which of the following is an example of a problem that can prevent an acquisition from being successful?* a. Ability to achieve synergy b. Little to no debt c. Adequate evaluation of target d. Too much diversification

Too much diversification

*Upon reaching saturation level in the US market, a fitness tracker firm decides to expand its service internationally, where its technology is superior. This illustrates which incentive for implementing an international strategy?* a. Searching for needed resources to help improve these technological capabilities b. Using rapidly developing technologies in other countries c. Competing with similar services in other countries d. Gaining classification as an international company

Using rapidly developing technologies in other countries

*A tech startup is exploring ways to develop an app that allows patients to visit their doctors virtually. The startup is partnering with a local practice to compile data to be accessible through the app. The company anticipates the project will take 2-3 years. What type of business-level strategy best fits this partnership?* a. Competition-reducing strategy b. Vertical complementary strategic alliance c. Uncertainty-reducing strategy d. Competition response strategy

Vertical complementary strategic alliance

*What does it mean when an acquisition cannot achieve synergy?* a. When a firm is in extraordinary debt as the result of acquiring another firm b. When the acquiring firm and acquired firm do not effectively share resources, economies of scale, and economies of scope across the businesses c. When a firm has too many business units and no clear method of measuring their performance d. When a firm becomes so large it does not have the economics necessary to manage the complexity of the organization

When the acquiring firm and acquired firm do not effectively share resources, economies of scale, and economies of scope across the businesses

*A cross-border strategic alliance is...* a. a strategy through which firms combine some of their resources to create an advantage by competing in one or more product markets b. an alliance in which firms share some of their resources from the same stage of the value chain c. a strategy in which firms share some of their resources to create economies of scope d. a strategy in which firms with HQs in different countries decide to combine some of their resources to create a competitive advantage

a strategy in which firms with HQs in different countries decide to combine some of their resources to create a competitive advantage

*Interactions among the four determinants of national advantage influence a firm's....* a. ability to be successful in its domestic market b. choice of international business-level strategy c. choice of national business-level strategy d. competency within its domestic market

choice of international business-level strategy

*A strategy in which firms collaborate to achieve a shared objective is known as...* a. corporate strategy. b. a strategic alliance. c. cooperative strategy. d. international strategy.

cooperative strategy

*A strategy through which a firm collaborates with one or more companies to expand its operations is called...* a. corporate-level cooperative strategy b. diversifying strategic alliance c. synergistic strategic alliance d. cross-border strategic alliance

corporate-level cooperative strategy

*Two approaches used to manage cooperative strategies are...* a. cost minimization and opportunity maximization b. cost maximization and opportunity maximization c. cost minimization and opportunity minimization d. cost maximization and opportunity minimization

cost minimization and opportunity maximization

*A firm whose operations are human-capital intensive would most likely use which of the following entry modes?* a. Licensing b. A cross-border acquisition c. Exporting d. A greenfield venture

cross-border acquisiton

*One of the biggest economic risks of international strategy that can reduce the value of a firm's assets is...* a. security risk b. currency fluctuations c. sufficient access to electrical power d. potential nationalization of invested assets

currency fluctuations

*When a firm makes continual improvements to the processes used to produce, sell, and distribute its products across country borders, its ability to learn how to reduce costs and increase the value of its products for its customers is enhanced. The firm is...* a. increasing its market size b. achieving strategic competitiveness c. developing economies of scale and learning d. gaining a local advantage

developing economies of scale and learning

*An auto company has entered into a strategic alliance with a motor manufacturer. The auto company is depending on the motor manufacturer's expertise in developing motors for small sports cars. The auto company holds a 60% stake, and the motor manufacturer holds 40%. The strategic alliance between the two firms is a(n)...* a. cooperative strategy. b. joint venture. c. equity strategic alliance. d. nonequity strategic alliance.

equity strategic alliance

*The complexities of cooperative strategies increase the challenge of effectively implementing them and may contribute to alliance _______* a. success. b. failure. c. partnerships. d. extensions.

failure

*A firm can cope with differences in governmental policies and practices in a host country by...* a. forming a strategic alliance b. setting up a wholly owned subsidiary c. setting up in a host country where governmental policies and practices are similar to the firm's home market d. establishing communication between the firm and the host country's government

forming a strategic alliance

*All of the following are incentives for pursuing an international strategy EXCEPT...* a. extending a product's life cycle b. gaining easier access to raw materials c. gaining access to consumers in emerging markets d. gaining a bigger share of the national market

gaining a bigger share of the national market

*When a firm buys a competitor, supplier, distributor, or business in a highly related industry so a core competency can be used to gain competitive advantage, this demonstrates an acquisition strategy to gain...* a. decreased market power b. resources c. higher profitability d. increased market power

increased market power

*A US auto manufacturer is founded to focus on environmentally friendly cars. As it expands, it sets its sights on operating in France, where the population highly values compact "green" cars. By implementing an international strategy in France, the company will hope to gain...* a. increased market size. b. increased economies of scale and learning. c. development of a competitive advantage through location. d. decreased market size.

increased market size

*A semiconductor company has established a plant in South Africa, where the power grid is somewhat unreliable. Which economic risk is most relevant to the semiconductor company?* a. Infrastructure b. Potential naturalization of private assets c. Lack of natural resources d. Security risk

infrastructure

*When a firm uses a franchise, the franchisee gains the license of the franchisor's trademark and method of doing business through a(n)...* a. one-time royalty fee b. ongoing franchise royalty rate c. initial franchise fee and ongoing royalty rate d. initial franchise fee

initial franchise fee and ongoing royalty rate

*A strategy through which the firm sells its goods or services outside its domestic market is called a(n) _____ strategy* a. local b. international c. national d. domestic

international

*Environmental trends, such as liability of foreignness, can impact a firm's choice of _____ strategy* a. international corporate-level b. national c. domestic d. business-level

international corporate level

*The probability of disruption of the operations of multinational enterprises by political forces or events whether they occur in host countries, home country, or result from changes in the international environment describes which of the following risks associated with international strategy?* a. Economic risk b. Reputational risk c. Political risk d. Financial risk

political risk

*A clothing brand that sells wholesale to fashion boutiques has just expanded its operations to South Korea. In that country, labor costs and various materials are cheaper. If South Korea contemplates closing its border to importing and exporting because of an international military conflict, the clothing manufacturer would suffer as a result of which environmental risk?* a. Economic risks b. International risks c. Political risks d. Cultural risks

political risks

*A popular clothing store features young designers and has been successful. To gain strategic competitiveness, the clothing store acquires social-media sensations' designs and brings their designs to life in the store. What type of acquisition is the store using to increase its strategic competitiveness?* a. Unrelated acquisition b. Related acquisition c. Cross-border acquisition d. Vertical acquisition

related acquisition

*An international diversification strategy creates the potential for firms to do all of the following EXCEPT...* a. sustain a competitive advantage without the need to continually upgrade it b. generate the resources required to sustain a large-scale R&D operation c. achieve greater return on their innovations d. reduce the often-substantial risks of R&D investments

sustain a competitive advantage without the need to continually upgrade it

*When a target firm does not solicit an acquiring firm's bid, it is a(n)...* a. acquisition b. merger c. takeover d. cross-border acquisition

takeover

*Spark is the only energy company in the fictional country Blacksburgia and therefore holds a monopoly in its home country. Spark's lack of competition in its home country can contribute to an international strategy in which of the following way?* a. Access to raw materials is not a problem in the home country b. The company has perfected its consumer relationship c. Other countries may have companies offering similar products d. The resources gained at home can be invested in international markets

the resources gained at home can be invested in international markets

*A large car manufacturer has acquired its tire supplier through a vertical acquisition. Instead of realizing economies of scale by adding to its value chain, the manufacturer has had a very small return on its investment. The firm is struggling to prioritize its efforts between manufacturing and acting as a tire supplier for outside businesses. With so much production power and so little use of it, the manufacturer's operations have become ineffective. What common problem of acquisitions has the manufacturer encountered?* a. Inability to achieve synergy b. Too much diversification c. Too large d. Inadequate evaluation of target

too large