INB 200 exam 2
Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors? initiation of meetings match market needs to the company's abilities commitment of resources identification of a potential market
A
Which of the following terms refers to a stock market with no central geographic location? cybermarket foreign exchange market capital market international bond market
A
A ________ strategy is one in which a company emphasizes on serving the needs of a narrowly defined market segment by being the low-cost leader, differentiating its product, or both. global focus stability retrenchment
B
A company that is selling unprofitable business units is most likely following a ________ strategy. growth retrenchment stability combined
B
A retrenchment strategy is designed to ________. encourage growth through joint ventures reduce the scale or scope of a corporation's operations focus exclusively on internally generated growth guard against organizational change
B
British toy company manufactures all of its product lines in a single facility in Europe. Which of the following is the company demonstrating? continuous production centralized production horizontal integration lean production
B
Citizens of one country who are living and working in another are called ________. local employees expatriates domicile residents repatriates
B
Companies involved in direct exporting typically rely on ________. distributors All of the above export management companies agents
B
Export/import financing in which a bank acts as an intermediary Bwithout accepting financial risk is called ________. counterpurchase documentary collection open account buyback
B
Firms using a geocentric staffing model are primarily concerned with ________. employing local managers with technical expertise hiring the best person available regardless of nationality ensuring that home office views and policies are maintained gaining support and assistance from local communities
B
The centralization of production facilities is a typical policy for companies that pursue ________. product differentiation a global strategy horizontal integration a multinational strategy
B
The customary means by which a company fills up vacancies in its offices is called ________. an employment policy staffing policy outsourcing onboarding
B
The key element of political risk of greatest concern for global companies is ________. currency and liquidity problems government regulation, government bureaucracy, and political stability letting past political events blind future opportunities the cost of transporting materials and goods
B
Which of the following financing methods entails the greatest risk for importers? confirmed letter of credit advance payment open account documentary collection
B
Which of the following forecasting techniques employs statistical models based on key economic indicators to forecast exchange rates? financial analysis fundamental analysis probability bounds analysis technical analysis
B
Which of the following is a barrier to buying products from international suppliers? extremely low tariffs additional transportation costs lower flexibility to respond to market conditions high political risk
B
Which of the following is a characteristic of foreign direct investment? low exposure to political risk high profit potential relatively low financial investment simple management
B
Which of the following requires an importer to pay for the imported goods when they are delivered? air way bill of lading sight draft time draft onboard bill of lading
B
Which of the following statements is true of objectives? Objectives of individual business units in a company tend to be stated in the most general terms. Objectives become more precise at the level of individual departments. Objectives at the highest level in an organization tend to be more specific. Objectives at the highest level in an organization are more concrete as they contain numerical targets.
B
Which of the following steps of the market screening process involves the analysis of the quality of workforce, materials, and infrastructure? selection of the market or site measurement of market or site potential assessment of the national business environment identification of basic appeal of a market
B
Which of the following stipulates that an identical product must have an identical price in all countries when the price is expressed in a common currency? purchasing power parity the law of one price the comparative advantage theory the efficient market view
B
_______ is the most common form of international business activity. Management contract Exporting Greenfield strategy Licensing
B
________ is the process of identifying and selecting an organization's objectives and deciding how the organization will achieve those objectives. Stratification Planning Economic transition Value chain analysis
B
to cool off an inflationary economy, a government might ________. lower interest rates raise interest rates lower foreign exchange rates raise foreign exchange rates
B
A ________ strategy typically increases the cost structure for international companies and forces them to charge higher prices to recover such costs. retrenchment global multidomestic blue ocean
C
A business-level strategy in which a company exploits economies of scale is called a ________. differentiation strategy stability strategy low-cost leadership strategy retrenchment strategy
C
A strategy designed to reduce the scale or scope of a corporation's business is called a ________ strategy. growth differentiation retrenchment
C
British pounds of a British trading company that are deposited in a U.S. bank are called ________. Eurodollars U.S. dollars Europounds Pounds
C
Devaluation of a nation's currency ________. gives foreign companies in the country an edge over domestic companies leads to a decline in the supply of goods and services lowers the price of a country's exports increases consumers' buying power
C
Eurobonds are popular because ________. they are less risky than traditional bonds they are always denominated in euros governments of nations in which they are sold do not regulate them European companies are considered very stable
C
Scenario: Beanstalk InternationalBeanstalk International is a rapidly growing company with well-established subsidiaries in several nations. The company wants to follow a strategy of adapting its products and marketing activities in each national market to suit local preferences. This strategy aims at creating value for its customers.Which of the following should managers at Beanstalk conduct to identify and distinguish between the primary and support activities in the organization? fundamental analysis structural analysis value chain analysis technical analysis
C
The first step in the screening process for potential markets and sites is to ________. assess the national business environment select a favorable market or site identify the basic appeal of a market measure the market or site potential
C
The make-or-buy decision primarily relates to ________. forming joint ventures reducing production acquiring components obtaining foreign faciliti
C
The world's three most important financial centers are ________. Zurich, Paris, and Washington China, Brazil, and Mexico Tokyo, London, and New York Dubai, Beijing, and Germany
C
When the value of a country's currency declines, the price of its ________. exports and imports on world markets declines exports and imports on world markets increases exports on world markets declines and the price of its imports increases exports on world markets increases and the price of its imports declines
C
Which of the following is an appropriate and widely-used method for staffing international business operations? collective narcissism cronyism geocentric approach nepotism
C
Which of the following processes will a computer assembling firm engage in if it decides to manufacture its own monitors and printers? outsourcing niche marketing vertical integration lean production
C
Which of the following strategies is appropriate for companies in industries where buyer preferences do not converge across national borders? retrenchment strategy global strategy multidomestic strategy mass customization strategy
C
________ refers to the continuous monitoring of events in other locations keeps managers aware of potential business opportunities and threats. Logistics Warehousing Environmental scanning Operations research
C
A ________ strategy can be implemented successfully for communicating promotional messages only if a sufficiently large and profitable market segment exists. dual extension method product extension/communications adaptation method product adaptation/communications extension method dual adaptation method
D
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 ________. lean production vertical integration continuous production centralized production
D
A document ordering the importer to pay the exporter a specified sum of money at a specified time is called a ________. letter of credit bill of lading management contract bill of exchange
D
A(n) ________ manager champions the ways of foreign markets as comparable, if not more enlightened, than the practices of his or her parent company and home nation. geocentric ethnocentric monocentric polycentric
D
An important advantage of polycentric staffing is that it ________. re-creates local operations in the image of home-country operations employs managers from home who will look out for the company's interests helps a company develop global managers who can adjust easily to any business environment eliminates the high cost of relocating expatriate managers and their families
D
Deciding the sequence of operations a company will use to create its product is called ________. product planning capacity planning location economies process planning
D
Foreign bonds issued and traded in Asia outside Japan and normally denominated in dollars are called ________. bulldog bonds Yankee bonds samurai bonds dragon bonds
D
Predictable exchange rates reduce the need for ________. currency conversion currency swap currency depreciation currency hedging
D
Which of the following clarifies the organization's purpose, values, and direction? code of ethics SWOT analysis strategic plan mission statement
D
Which of the following forecasting techniques employs charts of past trends in currency prices and other factors to forecast exchange rates? financial analysis fundamental analysis value chain analysis technical analysi
D
Which of the following is a major drawback of ethnocentric staffing? loss of control over home-country operations loss of control over host-country operations difficulty in the transfer of special know-how between branches high costs of relocating managers
D
Which of the following is not one of the three steps in increasing market share, revenue, and profits? select market with most potential for entry or expansion assess alternative markets evaluate respective costs, benefits, and risks perform a situation analysis
D
Which of the following phases of human resource planning involves decruitment? aking an inventory of the company's current human resources promoting employees to positions of greater responsibility estimating the company's future human resource needs normally occurs when a company decides to discontinue manufacturing or selling in a market.
D
Which of the following steps of the market screening process involves examining the cost of transporting goods? selection of the market or site measurement of market or site potential identification of basic appeal of a market assessment of the national business environment
D
Which of the following steps of the strategy development process for exports involves performing market research and interpreting results obtained from the research? commitment of resources initiation of meetings match needs of the market to the company's abilities identification of a potential market
D
Which of the following terms refers to the decision of whether to produce a component internally or to outsource it from another company? per curiam decision decision problem buyer decision process make-or-buy decision
D
_______ would most likely be recruited for non-managerial positions at foreign subsidiaries that do not require specialized skills. Home-country specialists Current employees from the company headquarters Recent graduates from colleges in the home country Workers from the local host-country market
D
________ refers to the concentration of production facilities in one location. Lean production Horizontal integration Continuous production Centralized production
D
T/F The spread of nationalization encourages the growth of the international equity market.
F
T/F investors increase risk by holding international securities whose prices move independently.
F
T/F: A common example of a push strategy is the creation of consumer demand through a television advertising campaign.
F
T/F: A push strategy is most appropriate when buyers display a great deal of brand loyalty toward one particular brand name.
F
T/F: In ethnocentric staffing, operations outside the home country are managed by individuals from the host country.
F
T/F: Marketing and sales are examples of a support activities in the value chain of an organization.
F
T/F: Product differentiation is more likely when nations share the same level of economic development.
F
T/F A Eurocurrency refers to a currency on deposit outside its country of issue.
T
T/F: As the unpredictability of exchange rates increases, so does the cost of insuring against the accompanying risk.
T
T/F: Emerging markets typically have fewer forms of mass media for use in implementing a pull strategy.
T
T/F: Fluctuating exchange rates increase the need for currency hedging.
T
T/F: Full employment or low unemployment rates can lead to higher inflation
T
T/F: Inflation in an economy can be controlled by increasing the interest rates.
T
T/F: Objectives of individual business units in an organization exclusively contain numerical targets of performance.
T
T/F: The intentional lowering of the value of a currency by a nation's government is called devaluation.
T
T/f: A pull strategy is the most efficient promotional strategy when distribution channels are lengthy.
T
The first phase of HR planning involves taking an inventory of a company's current human resources.
T
The stock market is also known as the ________.
equity-capital market
Company debt normally takes the form of ________, and it is an asset that can be traded anywhere at any time.
global bonds
_________ refers to shares of ownership in a company's assets that give shareholders a claim on the company's future cash flows.
stock
Which of the following factors is responsible for growth in the international equity market? advent of cybermarkets spread of countertrade centrally planned economies government partnerships
A
Which of the following is a characteristic of exporting? local market knowledge high financial exposure rapid market entry logistical simplicity
A
Which of the following normally takes the form of a wire transfer of money from the bank account of the importer directly to that of the exporter prior to shipment of merchandise? advance payment open account documentary collection letter of credit
A
Adapting products and their marketing strategies in each of the national markets of a company to suit local preferences is called a ________ strategy. multinational blue ocean global retrenchment
A
Advance payment is commonly used for export/import financing when ________. two parties are unfamiliar with each other the buyer has obtained credit for the transaction the buyer has good credit rating at banks the transaction is for a relatively high amou
A
An expanded money supply ________. A) reduces the cost of borrowing B) makes it difficult for financial institutions to lend money C) increases the cost of borrowing D) diminishes the entrepreneurial initiatives of a country
A
Countries differ significantly in their cultures, politics, laws, and economies. International managers must work to understand these differences and to incorporate their understanding into market- and site-selection decisions. Which of the following steps of the market screening process involves an evaluation of the government bureaucracy? assessment of the national business environment measurement of market or site potential identification of basic appeal of a market selection of the market or site
A
Firms using a(n) ________ primarily use parent country nationals to staff higher-level foreign positions. ethnocentric staffing model geocentric staffing model monocentric staffing model polycentric staffing model
A
Governments in developing countries impose fewer consumer protection laws in order to ________. hold down production costs and consumer prices enable companies to focus on profit-making exclusively decrease the flow of foreign direct investment into the country decrease the complexity of the legal procedures for foreign direct investment
A
Rates that the world's largest banks charge one another for loans are called ________. interbank interest rates London Interbank Bid Rates exchange rates official bank rates
A
Scenario: Sam Dearing, Budding International FinancierSam Dearing is a summer intern in the arbitrage department at a prestigious Wall Street firm. Sam is hoping to be offered a full-time position at the firm after he graduates from college, and therefore, Sam knows that he must demonstrate a strong understanding of how exchange rates work.Sam already knows that the ________ tells us the value of one country's currency we must pay to receive a certain amount of another. exchange rate par value law of one price purchasing power parity theory
A
Storage facilities, retail outlets, and production equipment in the host country are examples of ________. fixed assets intangible assets current assets liquid assets
A
The absence of government regulation in the Eurobond market ________. substantially reduces the cost of issuing a bond lowers the risk level of the bond makes Eurobonds less popular than foreign bonds exists because of the difficulty of regulating a multi-country market
A
The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S. dollar is R43.125/$. The annual inflation rates in India and in the United States are 19 percent and 3 percent respectively. What would be the new exchange rate at the end of the year? R49.8224/$ R37.327/$ R0.0267/$ $37.327/R
A
The lowering of the value of a currency by a nation's government is called ________. devaluation securitization fundamental disequilibrium currency hedging
A
The major objective of the European Central Bank is to ________. set monetary policy for EU countries that adopt the euro ensure that EU interest rates are equal to U.S. rates control taxes as a means of monitoring EU debt reduce spending by EU countries
A
The process of assessing a company's ability to produce enough output to satisfy market demand is called ________. capacity planning process management lean production product structure modeling
A
When the Brazilian Real changes from 1000 Real per U.S. Dollar to 1500 Real per U.S. Dollar, the Real is ________. devalued revalued unchanged, unless the government intervenes accelerated
A
Which element of the marketing mix includes the development of the tangible and intangible features that meet customer needs in diverse markets? product pricing promotion place
A
Which of the following communication strategies uses the same home-market product and marketing promotion in target markets? product/communications extension product extension/communications adaptation product adaptation/communications extension product/communications adaptation
A
Which of the following determines the process that a company will use to create its product? a firm's business-level strategy a firm's global strategy a firm's corporate-level strategy a firm's multinational strategy
A
