International Business Final

____ is a way to reach overseas customers by exporting through domestic-based export intermediaries.

Indirect exports

Which of the following types of societies would most likely foster more entrepreneurship?

Individualistic and low uncertainty-avoidance

Which of the following is one of the four major characteristics associated with a growing entrepreneurial firm?

Internationalization

Which of the following stakeholders has the most concern over short-term revenue falling during mergers and acquisitions?

Investors

Which of the following is a disadvantage of the home replication strategy?

It lacks local responsiveness.

Which of the following is a disadvantage of licensing and franchising?

Little control over marketing

Which of the following strategies has the lowest interdependence on knowledge management?

Localization strategy

_____ refers to a philosophy or way of thinking that places the highest priority on the creation of superior customer value in the marketplace.

Market orientation

____ is the informal interpersonal relationships among managers of different units that may greatly facilitate intersubsidiary cooperation among various units.

Micro-macro link

____ innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation.

Open

In a non-equity-based alliance, which of the following should be high for possible upgrading to equity-based relationships?

Potential as real option

Which of the following is a benefit of large-scale entries?

They demonstrate strategic commitment to certain markets.

According to the economic theory of supply and demand, a drop in price generates stronger demand.

True

An advantage of joint ventures is the shared costs, risks, and profits.

True

As a key element in achieving alignment, trust stems from perceived fairness and justice from all supply chain members.

True

Cartels are often labeled as anticompetitive and outlawed by antitrust laws.

True

Competitive dynamics are the actions and responses undertaken by competing firms.

True

Cultural distance is the difference between two cultures along some identifiable dimensions.

True

Cultural values and norms are examples of informal institutions.

True

Family background and educational attainment correlate with entrepreneurship.

True

Firms are allowed to organize strategic alliances with rivals for cost reduction.

True

Firms that are first to introduce new goods or services are likely to earn "monopoly profits" until competitors emerge.

True

Firms with fewer than 500 employees in the United States are considered small- and medium-sized enterprises.

True

In a broad sense, every supply chain is a strategic alliance involving a variety of players, each of which is a profit-maximizing, stand-alone firm.

True

In the context of alliance formation, shared capabilities is one of the driving forces in deciding whether to take a contract or an equity approach.

True

Individuals who discover, evaluate, and exploit previously unexplored opportunities are referred to as entrepreneurs.

True

International entrepreneurship is defined as "a combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations."

True

Localization is appealing, but expensive.

True

MNEs that engage in a transnational strategy promote global learning.

True

Managers involved in alliances require collaborative relationship skills.

True

Market-seeking firms go to countries that have a strong demand for their products and services.

True

Microfinance emerged in response to the lack of financing for entrepreneurial opportunities in many developing countries.

True

One of the late-mover disadvantages is the establishment of entry barriers by the first-mover.

True

Price elasticity refers to the changes in demand when price changes.

True

Prisoners' dilemma is a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect.

True

Strategic investments in an equity-based alliance involve one partner investing in another.

True

The antitrust policies in the United States make it difficult for incumbents to raise entry barriers for new entrants.

True

The global standardization strategy lacks local responsiveness.

True

The integration-responsiveness framework allows managers to deal with the pressures for both global integration and local responsiveness.

True

The international division structure is an organizational structure typically set up when a firm first engages in a home replication strategy.

True

The more tacit the capabilities of a firm in an alliance, the greater the preference for equity involvement.

True

The relationship between strategy and structure is reciprocal.

True

The scale of entry refers to the amount of resources committed to entering a foreign market.

True

The term "supply chain" is almost synonymous with "value chain," encompassing both inbound and outbound logistics.

True

Which of the following is an equity mode of entry?

Wholly owned subsidiaries

A(n) ____ is the transfer of the control of operations and management from one firm to another with the former becoming a unit of the latter.

acquisition

____ focuses on flexibility that can overcome short-term fluctuation in the supply chain.

Agility

____ perform an important "middleman" function by linking sellers and buyers overseas.

Export intermediaries

_____ strategy centers on leveraging home-grown competencies abroad.

Extender

A letter of credit increases transaction costs by increasing transaction risks.

False

A supply chain can't be changed after it is established.

False

An industry without a price leader makes it easier for firms in that industry to form collusions.

False

Antitrust authorities provide easy approvals for both alliances and acquisitions with less intervention.

False

Collusive price setting refers to price setting by monopolists or collusion parties at a level lower than the competitive level.

False

Contractual alliances involve sharing of ownership.

False

Cost pressures often push MNEs to adapt locally.

False

Cross-border mergers are more common than acquisitions.

False

Enhancing agility often entails making a series of make-or-buy decisions.

False

Equity-based alliances include co-marketing, research and development, contracts, turnkey products, strategic suppliers, and strategic distributors.

False

Ethnocentrism should be encouraged in international marketing.

False

Firms dealing with global agnostics can leverage global brands and their relatively more standardized products and services.

False

Firms with strong patents can challenge rivals for infringements, making mutual forbearance impossible.

False

Foreign direct investment is the only way in which SMEs can enter foreign markets.

False

Franchising is typically used in manufacturing industries.

False

From a resource-based view, explicit knowledge is strategically more important than tacit knowledge.

False

In general, governments in developed economies impose more procedures to start a company than those in poorer countries.

False

In the context of segmentation based on customer categories, global citizens are always skeptical about whether global brands deliver high quality goods.

False

Industrial parks refer to the clustering of economic activities in certain locations.

False

Innovation-seeking firms often single out the most efficient locations featuring a combination of scale of economies and low cost factors.

False

Innovations flow only from the host countries to the home country in a transnational strategy.

False

Liability of foreignness is the inherent disadvantage firms experience in home countries.

False

Market commonality refers to the degree of similarity between two rival's products.

False

Non-equity modes of entry include acquisitions and wholly-owned subsidiaries.

False

SMEs tend to be less entrepreneurial than large firms.

False

Tacit collusions typically lead to a cartel or trust.

False

The "O" in the VRIO framework indicates opportunity.

False

The existence of multiple currencies and the resultant currency risks can be viewed as informal trade and investment barriers.

False

The first phase in an alliance dissolution is mediation by third parties.

False

The global standardization strategy, despite its complexity, is still the best option at being cost effective, locally responsive, and learning-driven.

False

The resource-based view suggests that firms need to take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries.

False

Which of the following conforms to the notion put forward by the school of thought associated with stage models?

Firms enter culturally distant countries in later stages when they may gain more confidence.

Which of the following alliances is a contractual alliance?

Franchising

Which of the following is a popular way to enter into international service markets?

Franchising

Which is one of the four phases in an alliance dissolution?

Going public

Which of the following strategies is usually the first one adopted when firms venture abroad?

Home replication strategy

The institution-based view driving alliances and acquisitions focuses on _____ concerns.

antitrust

Blue ocean strategy focuses on _____.

developing new markets

Technically, place in the four Ps of marketing is also often referred to as the _____.

distribution channel

Co-marketing refers to _____.

efforts among a number of firms to jointly market their products and services

Dumping is defined as a(n) _____.

exporter selling below cost abroad

With regard to investment in start-ups, investment by _____ is considered as informal investment.

friends

A disadvantage of acquisitions is _____.

high development costs

The _____ strategy focuses on a number of foreign countries/regions, each of which is regarded as a standalone market worthy of significant attention and adaptation.

localization

In the context of acquisitions, the similarity in cultures, systems, and structures between firms is called _____.

organizational fit

A(n) ____ is an investment in real operations as opposed to financial capital.

real option

In supply chain management, _____ is a focus to establish, maintain, and enhance associations with customers.

relationship orientation

Microfinance provides micro loans used to:

start small businesses.

Mutual forbearance is a type of _____.

tacit collusion

The country-of-origin effect refers to _____.

the positive or negative perception of firms and products from a certain country

In theory, a global matrix structure supports the goals of the _____ strategy.

transnational

The _____ strategy endeavors to be simultaneously cost efficient, locally responsive, and learning-driven around the world.

transnational

Which of the following is a defining characteristic of entrepreneurship?

Ability to exploit opportunity

____ is the ability to recognize the value of new information, assimilate it, and apply it.

Absorptive capacity

____ refers to the ability to change supply chain configurations in response to long-term changes in the environment and technology.

Adaptability

_____ is designed to combat monopolies and cartels.

Antitrust policy

Which of the following is a first-mover advantage?

Avoidance of clash with a dominant firm at home

Which of the following must be practiced to avoid blunders in international marketing?

Be susceptible to nationalistic feelings of local consumers, employees, and governments

"People of the same trade seldom meet together, even for merriment and diversion, but their conversation often ends in a conspiracy against the public." This quote from Adam Smith is referring to which of the following business relationship terms?

Collusion

Which are the two primary pressures MNEs confront?

Cost reductions and local responsiveness

_____ refers to the positive or negative perception of firms and products from a certain country.

Country-of-origin effect

____ is an attack on a competitor's other markets if this competitor attacks a firm's original market.

Cross-market retaliation

____ best suits situations where the pressures to globalize are relatively low, and local firms' strengths lie in a deep understanding of local markets.

Defender strategy

_____ is defined as a plan to raise prices after eliminating local rivals.

Dumping

_____ refers to all the communications that marketers insert into the marketplace.

Promotion

Which of the following is an advantage shared by both greenfield operations and acquisitions?

Protection of know-how

_____ is defined as the extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm.

Resource similarity

____ is the informal benefits individuals and organizations derive from their networks.

Social capital

Which of the following alliances is an equity-based alliance?

Strategic investment

____ is the flow of products, services, finances, and information that passes through a set of entities from a source to the customer.

Supply chain

Which of the following motives for acquisition faces the resource-based issue of access to complementary resources?

Synergistic