Strategic Management Chapter 8

Which of the following is NOT a disadvantage of international acquisitions?

It is the slowest way to enter a new market.

_____is the set of costs associated with unfamiliar operating environments; economic, administrative and cultural differences; and the challenges of coordination over distances.

Liability of foreignness

Bunyan Heavy Equipment, a U.S. firm, is investigating expanding into Russia using a greenfield venture. The committee researching this project has delivered a negative report. The MAIN concern of the committee is probably

Russia's recent actions to gain state control of private firms' assets

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.

The firm is using a regional approach to international expansion

If intellectual property rights in an emerging economy are not well-protected, the number of firms in the industry is rapidly growing, and the need for global integration is high, _________is the preferred entry mode.

a joint venture or wholly owned subsidiary

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

a. achieve synergies and produce high-quality goods at lower costs

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

a. learn how to continuously reduce costs while increase the value of their products.

U.S. cola companies entered the global market because of

a. limited growth opportunities in their domestic market.

If conflict in a strategic alliance or joint venture is not manageable, a(n) _________may be a better option.

acquisition

In Porter's model, if a country has both_____and_________production factors, it is likely to serve an industry well by spawning strong home-country competitors that can also be successful global competitors.

advanced; specialized

A licensing agreement

allows a foreign firm to purchase the rights to manufacture and sell a firm's products within a host country

Moving into international markets is a particularly attractive strategy to firms whose domestic markets

b. are limited in opportunities for growth.

The increased pressures for global integration of operations have been driven mostly by

b. increasing demand for similar products

International strategy refers to a(n)

b. strategy through which the firm sells products in markets outside the firm's domestic market.

U.S. companies moving into the international market need to be sensitive to the need for local country or regional responsiveness because of

c. consumer needs, political and legal structures, and social norms vary by country.

Raymond Vernon states that the classic rationale for international diversification is to

c. extend the product's life cycle

Working in multiple international markets can provide firms with _____ perhaps even in terms of

c. new learning opportunities; research and development activities

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

c. to avoid high domestic taxation on corporate income

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.

Arkadelphia Polymers, Inc., earns 60 percent of its revenue from exports to Europe and Asia. The CEO of the company would be

concerned if the value of the dollar strengthened.

Which of the following is NOT a factor pressuring companies for local responsiveness?

d. availability of low labor costs

The location advantages associated with locating facilities in other countries can include all of the following EXCEPT

d. evasion of host country governmental regulations

The benefits of expanding into international markets include each of the following opportunities EXCEPT

d. favorable tax concessions and economic incentives by home-country governments.

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

d. transnational; multidomestic; global

In Porter's model, a specialized factor of production would include

d. workers with advanced engineering skills

When a firm INITIALLY becomes internationally diversified, its returns

decrease

Internationally diversified firms

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

A global corporate-level strategy emphasizes

economies of scale

An international diversification strategy is one in which a firm

expands into a potentially large number of geographic locations and markets.

A U.S. manufacturer of adaptive devices for persons with disabilities is considering expanding internationally. It is a fairly small company, but it is looking for growth opportunities. This company should primarily consider the option of

exporting

Japan, due to a lack of undeveloped land, would be an unusual choice of location for a U.S. cattle company to set up local grazing operations. This limiting factor would be identified in what part of Porter's determinants of national advantage?

factors of production

A transnational corporate-level strategy seeks to achieve

global efficiency and local responsiveness.

In addition to the four basic dimensions of Porter's "diamond" model, _________may also contribute to the success or failure of firms.

government policy

The means of entry into international markets that offers the greatest control is

greenfield ventures

The problems associated with exporting include

high transportation costs and the expense of tariffs

Under industry structural analysis, _________rivalry is viewed as detrimental to profitability. Under the model of national advantage, ______rivalry is viewed as______ as it results in competition and surviving firms are able to compete against global rivals.

high; high; beneficial

Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model?

highway systems and the supply of debt capital

Which of the following is NOT a typical disadvantage of licensing

incompatibility of the licensing partners

A nation's competitiveness depends on the capacity of its industries to ______and thereby maintain its competitive advantage.

innovate

The transnational strategy is becoming increasingly necessary to compete in international markets for all the following reasons EXCEPT

it is easy to use

A fundamental reason for a country's development of advanced and specialized factors of production is often its

lack of basic resources

A global strategy

lacks responsiveness to local markets

Most firms enter international markets sequentially, introducing their ________first.

largest and strongest lines of business

The choices that a firm has for entering the international market include all of the following EXCEPT

leasing

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

level off and become negative as diversification increases past some point.

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

liability of foreignness; regionalization.

A multidomestic corporate-level strategy has ______need for global integration and______need for local market responsiveness.

low; high

A global corporate-level strategy assumes

more standardization of products across country markets

The four aspects of Porter's model of international competitive advantage include all of the following EXCEPT

political and economic institutions

Which of the following is NOT a disadvantage associated with exporting?

potential loss of proprietary technologies

Terrorism creates an economic risk for firms, which

reduces the amount of investment foreign companies will make in a country perceived to be terror-prone.

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

regional strategies

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

A firm may narrow its focus to a specific region of the world

so that it can better understand the cultures, legal and social norms, and other factors that are important for effective competition in those markets

All of the following are reasons why firms use international strategic alliances EXCEPT

strategic alliances are easy to manage.

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.

Factors of production in Porter's model of international competitive advantage include all of the following EXCEPT

technology

A multidomestic corporate-level strategy is one in which

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

One of the primary reasons for failure of cross-border strategic alliances is

the incompatibility of the partners

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

the level of control over the firm's operations

Disney suffered lawsuits in France at Disneyland Paris as a result 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.

International corporate-level strategy focuses on

the scope of operations through both product and geographic diversification.

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

the worldwide economic situation

A large domestic market can provide the country's industries a chance at dominating the world market because

they have been able to develop economies of scale at home.

In China, Starbucks is standardizing its operations while simultaneously decentralizing some decision-making responsibility to local levels to meet customers tastes. Starbucks is following the ________international corporate-level strategy.

transnational

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

transnational

All of the following are international corporate-level strategies EXCEPT the_______strategy

universal

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

widespread multilingualism.