Chapter 10 Global Strategy

In Michael Porter's diamond framework, _____ conditions describe a country's endowments in terms of natural, human, and other resources.

factor

Midas Touch, a venture capital firm, has the opportunity to invest in one of two firms that are in the process of globalizing. Coolco, an air-conditioner manufacturer, faces intense pressure from its home market. Barker, a dog-toy manufacturer, has encountered little competition in its country of origin. In which company should Midas Touch invest?

Coolco, because firms that face stiff competition at home tend to do better abroad

Between the two countries, trade of luxury items manufactured in Carpatia will be most affected. Economic distance most affects industries or products for which demand varies by income (such as cars).

It will benefit from economic arbitrage. Companies from wealthy countries trade with companies from poor countries to benefit from economic arbitrage

Janessa Inc., a reputed brand for fine art supplies, is implementing an international strategy. Slalom Corp., a maker of mini computer tablets, is pursuing a global-standardization strategy. Which of the following statements most likely holds true in this scenario?

Slalom Corp. focuses more on cost-reductions when compared to Janessa Inc.

Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?

They reduce a firm's exposure to loss of reputation.

ow did Canada, Mexico, and the United States reduce the administrative and political distance between them?

by establishing the North American Free Trade Agreement (NAFTA)

Save On Everything Inc., a supermarket chain, is implementing a multidomestic strategy. Solar Future Inc., a company that manufactures solar panels for commercial and domestic purposes, is pursuing a global-standardization strategy. How will the two companies most likely differ from each other?

Unlike Solar Future Inc., Save On Everything Inc. will be able to pursue a differentiation strategy at the business level.

Vassar Systems Inc. wants to globally expand its market. It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property, though that may mean investing a significant amount of capital and other resources. In this scenario, which of the following foreign entry modes would best suit Vassar Systems?

acquisition

Which of the following statements best explains why Walmart is finding it difficult to replicate its existing business model in India?

because of the large economic distance between the United States and India

Which of the following has been a key driver for firms to expand globally during the Globalization 3.0 stage?

benefits from lower labor costs in manufacturing and services

significant differences between its U.S. personnel policies and Germany's culture

blue ocean. similar to a blue ocean strategy because they both focus on product differentiation and low costs.

Which of the following modes of entering a foreign market allows for the lowest level of control?

exporting

Which of the following types of organizations comparatively requires the lowest levels of investment and control?

franchising

Emirates, Etihad Airlines, and Qatar Airways are a threat to U.S. legacy carriers because they offer

higher quality for lower costs for international routes. are using a blue ocean strategy to attract new customers and thereby threaten the dominance of U.S. legacy carriers. This strategy involves offering higher quality at lower cost for international routes than the U.S. carriers.

Unilever's new-concept center is situated in downtown Shanghai, China, attracting hundreds of eager volunteers to test the firm's latest product innovations on-site while Unilever researchers monitor consumer reactions. In this example, Unilever is trying to reap the benefits of

location economies.

Carpatia and Novenica are neighboring countries with strong economic disparities. However, both the countries share a common national language and the same political ideologies. The relationship between these two countries will most likely affect the trade of

luxury items manufactured in Carpatia. Between the two countries, trade of luxury items manufactured in Carpatia will be most affected. Economic distance most affects industries or products for which demand varies by income (such as cars).

Michael Porter's diamond framework explains

national competitive advantage.

Which of the following is part of Geert Hofstede's cultural dimensions?

power distance

Which of the following statements accurately explains the primary reason behind Walmart's failure in Germany?

significant differences between its U.S. personnel policies and Germany's culture

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 it attempts to share best practices across units. Global learning and human resource strategies for executives are coordinated at the network level. Bertelsmann is following a(n)

transnational strategy. This type of strategy attempts to combine the benefits of localization and standardization strategies by creating a global matrix structure.