CH 7 400 or 40(1)?

Select all that apply Competitive advantage for global firms typically arises from which of the following characteristics? (Check all that apply.)

A company culture of promoting innovation Relentless, continuing improvement within the firm

______ strategy is a strategy based on a firms' differentiating their products and services to adapt to local markets.

Multidomestic

______ is the increasing international exchange of goods, services, money, people, ideas, and information within a specific area, such as Europe, North America, or Asia.

Regionalization

What can be concluded about companies that are successful globally?

They first succeeded in highly competitive domestic markets.

The ______ is a framework for explaining why countries foster successful multinational corporations.

diamond of national advantage

The international entry strategy that requires the least investment of resources and has the least risk is ______.

exporting

Companies sometimes expand to foreign markets to offset the ______ in their domestic market.

market saturation

Which of the following are motivations for international expansion? (Check all that apply.)

to increase the company's market size

A ______ is a business in which a multinational company owns 100% of the stock.

wholly owned subsidiary

_______ is an opportunity to profit by buying and selling the same good in different markets.

Arbitrage

Select all that apply Which of the following statements about related and supporting industries' role in creating a diamond of national advantage are correct? (Check all that apply.)

Competitive supplier bases often decrease manufacturing costs. Related and supporting industries enable firms to manage their supply chain's inbound logistics more effectively. Close working relationships with suppliers help develop competitive advantages, for example through joint research and development.

Select all that apply The benefits of strategic alliances and joint ventures include which of the following? (Check all that apply.)

Costs are shared with partners. Risks associated with doing business in a host country are lessened through partnering with local companies. Partnering with host country firms provides information on local market conditions, legal issues, and culture.

______ are the nature of home-market demand for the industry's product or service.

Demand conditions

Select all that apply Which of the following are ways a firm can establish a wholly owned subsidiary? (Check all that apply.)

Develop a new operation. Purchase an existing company in the home country.

Select all that apply Which of the following are risks and challenges of using an international strategy? (Check all that apply.)

Different activities in the value chain typically have different optimal locations. A lack of local responsiveness may alienate local customers An inability to be receptive to new ideas and innovation from foreign subsidiaries may lead to missed opportunities.

______ is producing goods in one country to sell to residents of another country.

Exporting

______ are a nation's position in factors of production.

Factor endowments

______ are the conditions in the nation governing how companies are created, organized, and managed as well as the nature of domestic rivalry.

Firm strategy, structure, and rivalry

Select all that apply Which of the following describe risks and limitations of strategic alliances? (Check all that apply.)

Firms may work at cross-purposes and not achieve goals. Cultural issues may lead to conflict between partners. Partners may withhold resources and information.

______ is a contractual arrangement in which a company receives a royalty or fee in exchange for the right to its intellectual property or other aspects of its operation; the agreement usually covers a long period of time.

Franchising

______ firms have at least 20% of their sales in each of the three major economic regions—North America, Europe, and Asia.

Global

______ is the rise of market capitalism around the world.

Globalization

______ is a contractual arrangement in which a company receives a royalty or fee in exchange for the right to use its trademark, patent, trade secret, or other valuable intellectual property.

Licensing

Select all that apply Which of the following statements about arbitrage as a motivation for international expansion are correct? (Check all that apply.)

Multinational companies that buy large volumes increase their bargaining power with suppliers. It involves buying something from where it is cheap and selling it somewhere else for a higher price. Arbitrage opportunities are more profitable to multinational companies because they often buy large volumes.

______ is shifting a value-creating activity from a domestic location to a foreign location.

Offshoring

______ is using other firms to perform value-creating activities that were previously performed in-house.

Outsourcing

______ risk is the potential threat to a firm's operations in a country due to ineffectiveness of the domestic governmental system.

Political

Select all that apply Rivalry is particularly intense in nations with which of the following conditions? (Check all that apply.)

There is a high likelihood for potential entrants from related industries. There is strong consumer demand. There are a large number of suppliers for that industry.

Select all that apply Which of the following are characteristics of a multidomestic strategy? (Check all that apply.)

There is little pressure to keep cost low. Decisions are generally decentralized. It emphasizes adapting products and services to local markets.

Select all that apply Which of the following statements about demand conditions are correct? (Check all that apply.)

They refer to the demands that consumers place on an industry for goods and services. When consumers place high demands on firms, firms are motivated to meet these high standards. Industries that have demanding customers often are able to anticipate future global demand conditions and proactively respond to these requirements.

Select all that apply Which of the following characterize globalization? (Check all that apply.)

a growing similarity of laws, rules, norms, values, and ideas across countries an increase in international exchange, including trade in goods and services an increase in the exchange of money, ideas, and information

A transnational strategy is used in industries where the pressure for ______.

both local adaptation and lowering costs are high

Select all that apply A global strategy emphasizes ______. (Check all that apply.)

centralizing operations to a few locations lowering costs economies of scale through producing standardized products and services

Which of the following is the main reason most firms are regional and not global?

distance

Select all that apply Which of the following are the main types of risk when expanding internationally? (Check all that apply.)

economic political currency

When a company decides to locate some operations in another country to gain access to needed talent, it is primarily seeking to ______.

enhance its performance

Select all that apply Companies optimize the location for their activities for which of the following reasons? (Check all that apply.)

enhancing performance risk reduction lowering costs

Ranked by the extent of investment and risk, from least to the most, what is the order of entry for international expansion?

exporting, licensing, franchising, strategic alliance, joint venture, wholly owned subsidiary

Select all that apply Which of the following are the primary considerations when selecting a mode of foreign entry? (Check all that apply.)

extent of investment and risk degree of ownership and control

Select all that apply Which of the following describe strengths of using an international strategy? (Check all that apply.)

leveraging and diffusing a parent firm's knowledge and core competencies lowering costs due to less need to tailor products and services

Many companies expand internationally in order to increase their market size so that they ______.

lower costs through increased economies of scale

Select all that apply Locating a research and development office overseas can yield which of the following advantages? (Check all that apply.)

performance enhancement cost reduction risk reduction

Select all that apply Euromoney magazine's semiannual "Country Risk Rating" evaluates which of the following? (Check all that apply.)

political and economic risks financial and credit risks

Select all that apply Which of the following are considerations that can affect quality when locating overseas? (Check all that apply.)

quality of external and internal coordination availability of needed talent speed of learning

Select all that apply Which of the following describe two limitations of using an international strategy? (Check all that apply.)

inability to take advantage of new ideas and innovations occurring in local markets limited ability to adapt to local markets

The two opposing pressures that managers face when they decide to go overseas are pressure to ______.

lower unit costs and tailor products for local adaptation

Companies sometimes launch products overseas when sales have flattened because the product has reached the ______ stage in the firm's home country.

maturity

Select all that apply Which of the following are among the basic strategies that companies can use to compete in the global marketplace? (Check all that apply.)

multidomestic strategy transnational strategy international strategy

______ strategy is based on firms' centralization and control by the corporate office, with the primary emphasis on controlling costs. It is used in industries where the pressure for local adaptation is low, and the pressure for lowering costs is high.

Global

______ strategy is based on firms' optimizing the trade-offs associated with efficiency, local adaptation, and learning.

Transnational

Select all that apply Which of the following are examples of factor endowments? (Check all that apply.)

factors of production, such as skilled human resources, land, and capital supporting infrastructure of a country such as transportation and communication systems

Many firms first expand internationally ______.

on a small scale and increase their level of investment and risk as they gain greater experience

Many firms first expand internationally ______. Multiple choice question.

on a small scale and increase their level of investment and risk as they gain greater experience

Which of the following refers to the presence, absence, and quality in the nation of supplier industries and other related industries that supply services, support, or technology to firms in the industry value chain?

related and supporting industries

Select all that apply Which of the following are factors of the diamond of national advantage? (Check all that apply.)

related and supporting industries demand conditions factor endowments firm strategy, structure, and rivalry

Select all that apply Which of the following are examples of political risk? (Check all that apply.)

social unrest demonstrations and terrorism military turmoil