MGT 491 Exam 3 Ch. 10

The administrative and political distance between two trading countries decreases when

there is a well-functioning capital market in the host country.

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

Atangadi is a strategist who wants to decide on the appropriate strategy to help his firm "go global." Which of the following should he consider while choosing his strategy?

He must be aware of the fact that despite globalization and the emergence of the internet, firm geographic location has actually maintained its importance.

Myriad Inc., a well-established and reputed multinational enterprise (MNE), is headquartered in a highly developed economy. It wants to start its operations in New Denistan, considered one of the less-developed nations in the world. How will this strategic move most likely affect Myriad Inc.?

It will benefit from economic arbitrage.

Fun Foods Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Fun Foods snacks. The countries into which the company wants to expand require a high degree of local responsiveness when it comes to food, and the citizens of those countries already spend plenty of money on snacks. Which action should the leaders of Fun Foods take?

Pursue a multidomestic strategy that includes new "local" brands.

Which of the following is most likely an accurate statement?

The multinational enterprise Starship benefited from advances in communications technology.

How will an increase in coordinated economic and political integration between countries affect the world economy?

There will be gains in social welfare and living standards across the globe.

MacAdam Enterprises sells the same sparkplugs in more than 30 countries. MacAdam is an example that helps to support the globalization hypothesis.

True

Administrative and political distances, such as the presence or absence of colonial ties, are part of the CAGE distance framework.

True CAGE is an acronym for different kinds of distance:Cultural Administrative and political Geographic Economic Administrative and political distances can include the presence or absence of colonial ties, trading block, and shared currency or monetary/political association. It can further include political hostilities and weak legal and financial institutions.

New Zoya is a country of English-speaking people and has a very profitable economy. Which of the following countries is most likely to be the closest to New Zoya in terms of cultural distance?

Valyria, where people speak English and have a low standard of living

For which of the following companies will geographic distance be the most relevant factor in deciding whether to trade with a target country?

a firm that extracts and exports iron ore

Sky Pioneers Inc. manufactures airplane parts. It wants to globalize and is willing to spend a considerable amount to protect its intellectual property. Which of these business ventures makes the most sense for Sky Pioneers?

acquiring an airplane-parts manufacturer in another country

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

factor

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.

A greater cultural distance between two trading countries

increases the liability of foreignness

Under the CAGE distance framework, the administrative and political distance between two countries primarily increases with

the absence of a trading bloc.

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

Multinational enterprises (MNEs) like Harley-Davidson, Rolex, and Starbucks are said to be following an international strategy because

they offer the same products or services in all their stores throughout the world.