Chapter #10

Silca Electronics Inc. is a consumer-electronics company based in the country of Pelo. It has approximately 300 stores across the country and is already active in three foreign countries. It attempts to establish itself successfully in the country of Zevar, and uses its low-cost strategy to do so. However, due to the additional costs associated with training, coordinating across geographic distances, and other costs associated with doing business in an unfamiliar cultural and economic environment, Silca Electronics Inc. incurs huge financial losses in Zevar. In this scenario, Silca Electronics Inc.'s failure to establish itself successfully in Zevar occurs most likely because a. it underestimates its liability of foreignness when entering the Zevar market. b. it underestimates its dwindling reputation before it enters the Zevar market. c. it overestimates the geographic and cultural distance between Pelo and Zevar. d. it overestimates its need to protect its intellectual property. e. it underestimates its liability of newness when entering the Zevar market.

a

Japanese and European engineering companies entered China to participate in building the world's largest network of high-speed trains worth billions of dollars. Companies such as Kawasaki Heavy Industries (Japan), Siemens (Germany), and Alstom (France) were joint-venture partners with domestic Chinese companies. These firms now allege that the Chinese partners built on the Japanese and European partners' advanced technology to create their own, next-generation high-speed trains. This example best highlights the _____ that firms can experience when expanding overseas. a. loss of reputation b. intellectual property exposure c. liability of foreignness d. liability of newness e. threat of new entrants

b

Ridemore Autos Inc. has shifted its research and development unit from its home country to Germany. This allows the company to be better informed about the latest developments in the automotive industry by tapping into the highly advanced automotive industry in Germany. In this scenario, Ridemore Autos Inc. is reaping the benefits of a. dislocation mobility. b. location economies. c. economies of scope. d. resource immobility. e. resource ambiguity.

b

Which of the following entry modes was used extensively in Globalization 1.0 stage? a. joint ventures b. exports c. strategic alliances d. greenfield operations e. acquisitions

b

Fierce domestic competition in Lobekland makes a tough environment for any motorcycle company. Success requires top-notch engineering of chassis and engines, as well as keeping costs and fuel consumption in check. As a result, Lobekland's motorcycles have a competitive advantage in the global market. According to Porter's diamond framework, this scenario shows the influence of competitive intensity in a. related complementors. b. unsupportive complementors. c. a focal industry. d. supportive complementors. e. a peripheral industry.

c

The _____ states that geographic location alone should not lead to firm-level competitive advantage because firms are now, more than ever, able to source inputs globally. a. dynamic capabilities framework b. dynamic fit framework c. death-of-distance hypothesis d. local-responsiveness hypothesis e. real options framework

c

Allgreva Inc. is located in Movaria near the nation of Clozame. Allgreva is considering expanding into Clozame. Both countries have similar consumer incomes and knowledge bases and share a common language. Also, the transportation networks between the countries are strong. Even so, the two nations have a long-standing dispute concerning the control of an area of land along their common border. Currently, Movaria rules this land. Which of the following would most likely prevent Allgreva from expanding into Clozame? a. administrative distance b. cultural distance c. economic distance d. political distance e. geographic distance

d

The German multimedia conglomerate Bertelsmann operates in more than 60 countries throughout the world and owns many regional leaders in their specific product categories, including Random House Publishing in the United States. Bertelsmann operates its more than 500 regional media divisions as more or less autonomous profit-and-loss centers. but attempts to share best practices across units; global learning and human resource strategies for executives are coordinated at the network level. Bertelsmann is an example of following a(n) a. global-standardization strategy. b. geographic fit strategy c. multi-domestic strategy. d. transnational strategy. e. international strategy.

d

Toyota's global success in the 1990s and early 2000s was based to a large extent on a network of world-class suppliers in Japan. This tightly knit network allowed for fast two-way knowledge sharing—this in turn improved Toyota's quality and lowered its cost, which it leveraged into a successful blue ocean strategy at the business level. This example shows the effectiveness of a. demand conditions. b. factor conditions. c. Porter's five forces. d. related and supporting industries/complementors. e. competitive intensity in a focal industry.

d

The transnational strategy is similar to a(n) _____ strategy because they both focus on product differentiation and low costs. a. liquidation b. niche strategy c. product diversification d. international e. blue ocean

e