International Business Ch. 13

Carrefour has been more successful than Walmart in Europe, whereas Walmart has been more successful than Carrefour in the United States. What is the most likely reason for these results?

First-mover advantages

A company should probably use a concentration strategy for international expansion when there are ___________.

High growth rate and long competitive lead times

The origin of investment proposals differs from the origin of divestment proposals in that the divestment proposals are more likely to come from ___________.

Higher up in the organization

Which of the following reasons most compels companies to make location decisions on one international opportunity at a time rather than comparing among two or more?

If an important customer develops opportunities in a foreign country, a company may have little alternative except to follow that customer;s lead

In terms of political risk, it is most accurate to state that high risk ___________.

If avoided, may lead to higher competitive risk

Escalation of commitment is best described as the ___________.

Increased likelihood of investing in a country because of having spent considerable time and money in examining it

Sales expansion is probably the most important variable in determining international location decisions. This statement is most likely based on the assumption that ________.

Increased sales will lead to more profits

The major use of the matrix as a tool in international location strategy is to ____________.

Indicate the relative placement of countries in terms of attributes

International mangers most likely need to understand how to evaluate international geographic alternatives because ___________.

The commitment of resources to one locale may require forgoing projects in other locales

Which of the following is true about projected demographic changes up to the year 2050 that could affect future production and sales locations?

The growth in per capita GDP should be higher in today's developing economies than in today's developed economies

Gucci, a maker of luxury fashion and leather goods, plans to expand its sales market. The firm needs to compare countries fro the market potential of its products. Which of the following is the best indicator for Gucci to use?

The number of millionaires in each country

The ability to compare production costs among countries in an effort to determine where to locate production is significantly hampered by all of the following EXCEPT

The number of ways the same product can be made

A company's operations are most likely to be taken over by a host government when ___________.

The operations are substantial and have a widespread effect on the country because of the company's size

Which of the following BEST explains why Burger King has developed such a strong presence in many of the small countries of Latin America and the Caribbean?

These countries are close to Burger King's headquarters

Which of the following BEST explains why foreign subsidiary managers are often reluctant to propose divestments in the countries where they are working?

They are afraid of proposing the elimination of their jobs

Which of the following is LEAST likely reason for inaccuracies in published governmental data?

Translation errors from the host country language

Opal Computers is considering international production expansion. After scanning to decide on a few countries to consider more closely, Opal managers will most likely need to __________.

Travel to the locations to analyze and collect specific date

For U.S. forms, the most comprehensive source of export opportunities information is from the

U.S. Department of Commerce

A go/no-go decision means _________.

An individual project decision is based on whether the project meets threshold criteria

Fidelity Manufacturing is considering expanding its operations into the Phillipines. A manager at Fidelity has the task of predicting political risk in the Phillipines. Which of the following approaches should the manager LEAST use to accomplish the task?

Analyzing the market share of competitors in the country

When examining economic and demographic variables to compare countries' sales potential for your product, which of the following should NOT be considered?

Countries may depend heavily on the import of raw materials

The concept of liquidity preference in international operations refers to __________.

A company's willingness to accept a lower rate of return on investments in countries where it can more easily sell them and convert the proceeds at a favorable rate

Assume Company a receives a proposal from Country B to be a joint venture partner abroad. Country A is most likely to make its decision based on

A go/no-go basis

We now have technology to allow people to communicate globally without traveling as much. Leading researchers on urbanization and planning suggest that the most likely consequence of this is ___________.

A greater number of self-motivated workers e-mailing and teleconferencing with colleagues.

Demographers project that the share (percentage of population) of what we now consider the working-age of population in developed countries will decrease up to the year 2050. Which of the following is the most likely result of this trend?

A higher percentage in per capita GDP in today's developing economies than in today's developed economies

Instead of comparing different proposals involving foreign operations, companies often make decisions by looking at proposals one at a time. Which of the following is NOT a possible reason for this behavior?

A lack of comparable data on different countries renders comparison impossible

Companies are more likely to gain advantages by locating near competitors for all of the following reasons EXCEPT to ____________.

Agree with competitors on production limitations

Which of the following statements is NOT true about risk as it affects companies' choice of location for foreign operations?

Companies choose the cheapest location regardless of risks

Which of the following is NOT true about the harvesting or divesting of foreign operations?

Companies have tended to divest too soon, rather than working to improve performance

In which of the following situations would tax rate differences among countries be most important for deciding where to place an investment?

Companies want tot serve an entire region within a regional trading block

A manager has the task of collecting and analyzing data that will help the firm decide where to locate its international operations. Which of the following BEST describes how the manager should handle this task?

Compare the costs of data collection with the probable payoff it will generate for the firm.

Labor cost advantages gained by moving into a country with low wages may be short-lived because ________.

Competitors follow leaders into low-wage areas

________ is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent

Countertrade

By expanding the size of the market, exporting can enable a firm to achieve _____, thereby lowering its unit costs.

Economies of Scale

Dawson Manufacturing produces and sells DVD players and its planning to expand sales internationally. Dawson has narrowed down the list of potential countries to India and Guatemala. A Dawson manager has the task of obtaining data regarding the number of DVD players sold annually in India and Guatemala. If unable to locate this information, she might most likely estimate the sales potential of these two countries by ____________.

Examining the sales history of flat-screen televisions

Which of the following BEST explains Blockbuster's failed expansion into Germany?

Laws limiting hours of operation

The lower survival rate of foreign companies in comparison to local firms for many years after they begin operations is known as ___________.

Liability of foreignness

An example of a first-mover advantage in international operations is _____________.

Lining up the best suppliers and distributors before competitors enter the market

Which of the following is generally the most costly information source for companies?

Marketing research and consulting companies

Risks to companies from natural disasters and communicable diseases are ________.

Most prevalent in the poorest countries of the world

Which of the following BEST describes the purpose of using of an opportunty-risk matrix for comparing countries

Narrow alternatives so decision makers can make a detailed analysis of the strongest candidates

The crowding of foreign market to prevent competitors' advantages is known as _____________.

Oligopolistic reaction

In a concentration strategy of international expansion, a company would go to ___________.

One or a few foreign countries and build a strong involvement there before going to other countries

Top executives at Jordan, a U.S. consulting firm, are debating whether or not to expand into a country with a great deal of violence by staffing mostly with U.S. personnel. A vice president argues that Jordan should send its employees there. Which of the following statements LEAST supports the vice president's position?

Operating costs are lower in violent areas

Which of the following is the LEAST likely reason that inaccuracies appear in published information about countries?

Poor methodology used in data collection

In a diversification strategy for international expansion, a company would move ____________.

Rapidly into many foreign countries, and then gradually increase its presence in those countries

Elison Enterprises is planning international geographic expansion. A manager at Elison has been given the task of scanning for locations primarily to __________.

Reduce the number of options available to a manageable number for further detailed analysis

Which of the following is most likely a true statement about companies' acquisition of resources/assets abroad?

Resources availability limits a firm's production location choices.

A company's location should be flexible enough to __________.

Respond to new opportunities and withdraw from less profitable ones

Which of the following most accurately compares the techniques of scanning versus detailed analysis of countries?

Scanning considers a large number of countries so that only the most promising ones undergo a detailed analysis.

Comparing countries in international business is LEAST useful for determining the ________.

Selection of which managers to send to which countries

Grids are a useful method of comparing countries for international business expansion because they _____________.

Set minimum scores for proceeding further

Which of the following best explains why U.S. firms typically place earlier and greater emphasis on expansion into Canada and the United Kingdom?

Similarities in culture and legal systems

The letter of credit used for financing international trade:

States that the bank will pay a specifies sum of money to a beneficiary on presentation of particular, specified documents

A manager needs to prepare a grid to compare countries for location of the firm's international operations. It would be most useful for the managers to ___________.

Use a team made up of people from different functions within the company

Top executives at Jordan, a U.S. consulting firm, are debating whether or not to expand into a country with a great deal of violence by staffing mostly with U.S. personnel. A vice president argues that Jordan should forgo sending its employees there because of the high risk for them of kidnappings in the region? Which of the following statements best supports the vide president's position?

Violence is a harbinger of additional risks that affect operations negatively.

US companies generally put earlier and more sale-seeking emphasis on countries ________.

Where operating conditions seem similar to those at home

Executives at Wilson Enterprises need to determine how to leverage and improve the firm's existing competencies on a global basis. What are the two most basic questions that they must answer?

Which markets should we serve and where should production be located to serve those markets?

Exporting is nearly always a way to increase the revenue and profit base of a company because:

the international market is normally so much larger than the firm's domestic market