IBUS380 Exam 3

Which of the following statements is true of countertrade? A) Countertrade is practiced by countries when there is a lack of hard currency. B) Countertrade involves products whose prices on world markets tend to remain steady. C) Countertrade usually involves industrial products and computer software. D) Hedging risk in countertrade is prohibited.

A) Countertrade is practiced by countries when there is a lack of hard currency.

Which of the following steps of the strategy development process for exports involves performing market research and interpreting results obtained from the research? A) identification of a potential market B) match needs of the market to the company's abilities C) initiation of meetings D) commitment of resources

A) identification of a potential market

Which of the following statements is true of objectives? A) Objectives of individual business units in a company tend to be stated in the most general terms. B) Objectives become more precise at the level of individual departments. C) Objectives at the highest level in an organization tend to be more specific. D) Objectives at the highest level in an organization are more concrete as they contain numerical targets.

B) Objectives become more precise at the level of individual departments.

A company proposes that in exchange for a hard-currency sale, it will make a hard-currency purchase of an unspecified product from the buyer nation in the future. Which of the following is the company proposing? A) a counterpurchase B) an offset C) a buyback D) a barter

B) an offset

Which of the following allows a country to earn back some of the currency it pays out for imports? A) switch trading B) counterpurchase C) buyback D) barter

B) counterpurchase

An Asian jewelry company maintains production facilities in South Korea, Vietnam, and Malaysia. Which of the following is the company exemplifying? A) lean production B) decentralized production C) vertical integration D) continuous production

B) decentralized production

Which of the following statements is true of the environmental forces that affect strategy formulation? A) Socialist economic systems normally levy light taxes on business profits. B) Countries that excessively spend on R&D tend to have lower levels of prosperity. C) Approval of the host government is almost always necessary for making direct investments. D) Free-market economies tend to levy high taxes on business profits.

C) Approval of the host government is almost always necessary for making direct investments.

A British toy company manufactures all of its product lines in a single facility in Europe. Which of the following is the company demonstrating? A) continuous production B) lean production C) centralized production D) horizontal integration

C) centralized production

Which of the following is a special ability of a company that competitors find extremely difficult to equal? A) comparative advantage B) absolute advantage C) core competency D) economy of scale

C) core competency

Which of the following is the first stage of the strategy-formulation process? A) identification of value-creating activities B) formulation of strategies C) identification of company mission and goals D) identification of core competency

C) identification of company mission and goals

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors? A) identification of a potential market B) match market needs to the company's abilities C) initiation of meetings D) commitment of resources

C) initiation of meetings

Which of the following is a strategic factor that influences a company's international entry mode selection? A) market consumption capacity B) market receptivity C) market size D) market intensity

C) market size

Which of the following strategies is appropriate for companies in industries where buyer preferences do not converge across national borders? A) retrenchment strategy B) global strategy C) multidomestic strategy D) mass customization strategy

C) multidomestic strategy

Which term refers to the major objectives that a firm wants to accomplish through pursuing a specific course of action? A) tactics B) value chains C) strategic goals D) control frameworks

C) strategic goals

________ refers to the concentration of production facilities in one location.

Centralized production

________ refers to any one of several different arrangements that business parties negotiate so that they can trade goods for good, primarily with countries that have limited amounts of foreign exchange.

Countertrade

Which of the following is true of distributors? A) The use of distributors increases the exporter's control over the price buyers are charged. B) They are compensated with a fixed salary plus commissions based on the value of their sales. C) They are seldom required to take ownership of the merchandise when it enters their country. D) They can stunt the growth of the exporter's market share by charging very high prices.

D) They can stunt the growth of the exporter's market share by charging very high prices.

Which of the following is an advantage of exporting? A) vulnerability to tariffs B) logistical complexities C) potential conflicts with distributors D) access to new markets

D) access to new markets

Which of the following terms refers to the decision of whether to produce a component internally or to outsource it from another company? A) buyer decision process B) decision problem C) per curiam decision D) make-or-buy decision

D) make-or-buy decision

Which of the following clarifies the organization's purpose, values, and direction? A) code of ethics B) SWOT analysis C) strategic plan D) mission statement

D) mission statement

________ refers to a situation in which facilities are spread over several locations, with one facility for each national business environment in which the company markets its products.

Decentralized production

________ take ownership of the merchandise when it enters their country and accept all the risks associated with generating local sales.

Distributors

________ is the most common form of international business activity.

Exporting

________ occur(s) when a firm sells its products to a domestic customer, which in turn exports the product, in either its original form or a modified form.

Indirect exporting

What strategy involves adapting products and their marketing strategies to national markets to suite local preferences?

Multinational strategy

________ is the process of identifying and selecting an organization's objectives and deciding how the organization will achieve those objectives.

Planning

________ is a countertrade whereby one company sells to another its obligation to make a purchase in a given country.

Switch trading

________ is the process of dividing a company's activities into primary and support activities and identifying those that create value for customers.

Value-chain analysis

The centralization of production facilities is a typical policy for companies that pursue ________.

a global strategy

The decentralization of production facilities is a typical policy for companies that pursue ________.

a multinational strategy

The make-or-buy decision primarily relates to ________.

acquiring components

The export of industrial equipment in return for products produced by that equipment is called_______.

buyback

Kathleen, a manager at Parker Airline, has the responsibility of deciding how many passengers Parker Airline can serve at a given time. Kathleen is most likely involved with ________.

capacity planning

The process of assessing a company's ability to produce enough output to satisfy market demand is called ________.

capacity planning

A company that sells undifferentiated products in all their markets and do not need to locate near their markets in order to stay on top of changes in buyer preferences use ________.

centralized production

The main benefit of a multinational strategy is that it allows companies to ________.

closely monitor buyer preferences in each local market AND respond effectively to emerging buyer preferences

The sale of goods and services to a country by a company that promises to buy a specific product from that country in the future is called a(n) ________.

counterpurchase

Companies with decentralized production facilities are often pursuing ________ strategies.

differentiation

A(n) ________ exports products on behalf of an indirect exporter.

export management company

An offset agreement differs from a counterpurchase agreement in that an offset agreement ________.

fails to specify the type of product that must be purchased

Agency relationships are popular among exporters because they are easy to terminate should difficulties arise. True or False?

false

Capacity planning applies only to manufacturing companies. True or False?

false

It is important for low-cost competitors to locate near their markets in order to keep track of buyer preferences. True or False?

false

Marketing and sales are examples of support activities in the value chain of an organization. True or False?

false

Objectives at the highest level in a company are always stated in the most specific terms. True or False?

false

Typically, indirect exporting relies on local sales representatives or distributors. True or False?

false

Decentralized decision making is beneficial when ________.

fast-changing national business environments put a premium on local responsiveness

What is the first step in selecting a foreign market?

identification of potential market

Adapting products and their marketing strategies in each of the national markets of a company to suit local preferences is called a ________ strategy.

multinational

Companies often establish largely independent, self-contained units in each of its national markets to implement a ________ strategy.

multinational

The main benefit of a multidomestic strategy is that it ________.

responds quickly and effectively to emerging buyer preferences

Global products are most commonly seen in industries where there is ________.

significant price competition

A ________ is a course of actions taken by managers to help a company meet its objectives.

strategy

Buyback is defined as ________.

the export of industrial equipment in return for products produced by that equipment

All parties ranging from suppliers and employers to consumers who are affected by a company's activities are called its stakeholders. True or False?

true

Companies can achieve economies of scale in production by expanding into international markets. True or False?

true

Companies selling undifferentiated products find centralized production most effective. True or False?

true

Core competencies are developed by organizations over long periods of time. True or False?

true

Core competencies are the special ability of a company that competitors find extremely difficult or impossible to equal. True or False?

true

Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all. True or False?

true

Differentiation strategies demand that producers provide extra value by offering customers something unique, such as superior quality, added features, or special brand images. True or False?

true

Direct exporting is when a company sells its products directly to buyers in a target market. Indirect exporting occurs when a company sells its products to intermediaries who then resell to buyers in a target market. True or False?

true

Distributors are firms who take ownership of the merchandise when it enters their country. True or False?

true

Most large companies use exporting to increase sales and open up new markets when the domestic market has become saturated. True or False?

true

Objectives of individual business units in an organization exclusively contain numerical targets of performance. True or False?

true

Strategy is the set of planned actions that managers take to help a company meet its objectives. True or False?

true

Supply issues (location and availability of vendors) are also important in location planning. True or False?

true

Technology development along with business infrastructure, human resource management and procurement are examples of support activities in the value chain of an organization. True or False?

true

The most common method used for buying and selling goods internationally is exporting. True or False?

true

The process of assessing a company's ability to produce enough output to satisfy market demand is called capacity planning. True or False?

true

Worker productivity tends to be lower in most developing nations than in developed nations. True or False?

true