ch 7 gba
Which of the following does NOT accurately characterize the differences between a localized multidomestic strategy and a global strategy?
A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries.
Which of the following is NOT one of the strategy options for competing in the markets of foreign countries?
A profit sanctuary strategy
What strategy is considered more conducive to transferring and leveraging subsidiary skills and capabilities across borders?
A. A transnational strategy
Which of the following is LIKELY to be viewed as a pro-business government policy from the perspective of companies competing on an international basis?
Australia introduces a permanent employer-sponsored visa program for skilled manpower.
Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the European Union benefit from the decline in the value of ringgit against the euro?
Because decline in the value of ringgit against euro reduces the cost of furniture manufactured in Malaysia, making it more competitive in European markets
Which of the following is NOT a reason why crafting a strategy to compete in one or more foreign markets is inherently complex?
Because similarities in buyer tastes and preferences facilitate standardization of products and services
Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true?
Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.
Competing in the markets of foreign countries generally does NOT involve which of the following?
Crafting a multidomestic strategy that works just as well in one country as in another and that also has the appeal of turning the world market into a mostly homogeneous market
Which of the following is NOT an advantage of strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms?
Creating permanent arrangements between the domestic and foreign firms
Which of the following factors does NOT determine whether to employ entry strategy options?
Cross-border transfer activities and home country advantages
What supports competitive offensives in one market with resources and profits diverted from operations in another market?
Cross-market subsidization
Which of the following exemplifies location-based advantage for the companies competing on an international basis?
De Beers sets up operations in the mining region of South Africa.
What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets?
Deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country
What aspect of the diamond framework is MOST LIKELY responsible for GlenmarkPharma setting up manufacturing facilities in the United States, the world's largest market for pharmaceuticals?
Demand conditions
Which of the following is NOT a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets?
Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly.
Which of the following is NOT a risk of cross-border alliances between domestic and foreign firms?
Disengaging from the alliance once its purpose has been served
What is it called when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit?
Dumping practices
Which of the following statements about fluctuating exchange rates and the related effects on companies competing in foreign markets is true?
Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.
Which of the following strategies identifies a multidomestic approach?
Hard Rock Cafes in Hawaii offer fish tacos and ahi tuna sandwich.
Which of the following is an example of a modification in the company's business model to accommodate the unique local circumstances of developing countries?
In China, Dell moved from its traditional Internet-based orders to orders over phone and fax.
Which of the following statements regarding multidomestic and global competition is false?
In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.
Which of the following statements regarding global competition is false?
In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails.
What can happen when international rivals compete against one another in multiple-country markets?
It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war.
What is a primary drawback of a localized multidomestic strategy?
It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates.
What is the best way to achieve the efficiency potential of a global strategy?
It requires that resources and best practices be shared, value chain activities be integrated, and capabilities be transferred from one location to another as they are developed.
Apollo Tires sets up a manufacturing unit in Mexico. Following this, Renault-Nissan signs a supply contract with the tire multinational. In which of the following ways is Renault-Nissan likely to gain from the pact?
Knowledge sharing within same value chain system
When concentrating production in a few locations, which of the following can allow a manufacturer to lower unit costs, boost quality, or master a new technology more quickly?
Learning-curve effects
Which of the following is NOT an accurate statement as concerns competing in the markets of foreign countries?
Localizing a global company's product offerings country-by-country leads to low-cost advantage.
Which of the following exemplifies cross-country differences in demographic, cultural, and market conditions?
McDonald's offers 100% beef-free products in its outlets in India.
Which of the following is an example of a cross-border alliance?
Renault-Nissan sells more than one in ten cars worldwide.
Which of the following is NOT a typical host government requirement that affects the operations of foreign companies?
Requiring foreign companies to use vertical integration to support operations of local companies
Which of the following is the most UNLIKELY element of a "think global, act global" approach to crafting a global strategy?
Scattering plants across many countries, with each plant producing product versions for local area markets
Which of the following is the most unlikely element of a localized multidomestic strategy?
Selling directly to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market
What does the World Trade Organization (WTO) NOT do primarily?
Sets countries' tariff rates
Greenfield ventures, like all market entry strategies can pose serious problems to achieving foreign market entry success. What is NOT deemed a barrier to success?
Such ventures are the fastest entry route to achieve a sizeable market share.
Which of the following is an example of an export strategy?
The Unites States is the world's largest producer and supplier of artificial fur.
Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is NOT accurate?
The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.
Which of the following statements regarding multidomestic competition is false?
The benefits from global integration and standardization are high.
Which of the following is NOT a factor analyzed and relied on by firms when developing competitive strength in a foreign market?
The level of industry-related support activities to foster customization of products and services
A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States.
This is a true statement.
Why do companies decide to enter a foreign market?
To capture economies of scale in product development, manufacturing, or marketing
Exxon Mobil enters into a pact with Gazprom, the world's largest natural gas extractor, to set up a processing unit in Moscow. Which of the following is most likely the reason for Exxon Mobil to opt for this strategic alliance?
To gain access to low-cost inputs of production
Which of the following is NOT a reason why a company decides to enter foreign markets?
To impart technical knowledge to high-cost human resources in developing nations
Televisa, a Mexican media company, became the world's most prolific producer of Spanish-language soap operas owing to its expertise in Spanish culture and linguistics. Which of the following strategies did Televisa employ to defend against global giants?
Transfer company expertise to cross-border markets and initiate actions to contend on an international level.
Which of the following is NOT a viable strategy option for a local company in competing against global challengers?
Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments
The diamond framework is NOT LIKELY to answer which of the following questions about competing on an international basis?
What are the disadvantages of allowing foreign competition?
In which of the following situations is employing a "think local, act local" multidomestic strategy highly questionable?
When a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide
Which of the following is a condition that makes an internal startup strategy appealing over an acquisition?
When an internal startup has the necessary scale and resource strengths to compete with rivals
When is a think-local, act-local approach to strategy making appropriate?
When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited
Profit sanctuaries are country markets or geographic regions where:
a company derives substantial profits because of its protected market position or unassailable competitive advantage.
Transferring core competencies and resource strengths from one country market to another is:
a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.
The advantages of manufacturing goods in a particular country and exporting them to foreign markets:
are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.
A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets in many different parts of the world:
becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported.
A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets:
becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.
A European manufacturer that exports goods made at its European plants to the United States:
becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar.
The advantages of using a licensing strategy to participate in foreign markets include:
being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets.
A think-global, act-global strategic theme puts emphasis on:
building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another.
Using domestic plants as a production base for exporting goods to selected foreign country markets:
can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets.
The competitive advantage opportunities that a global competitor can gain by dispersing performance of its activities across many nations include all of the following, EXCEPT:
centralizing value chain activities to foster just-in-time inventory activities.
To use location to build competitive advantage, a company that operates transnationally or globally must:
consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities.
In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by:
dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets.
Sharing and transferring resources and capabilities across borders may also contribute to the development of broader or deeper competencies and capabilities, thereby helping a company achieve:
dominating depth in some competitively valuable area
Viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets include all of the following, EXCEPT:
focusing on local markets whose circumstances will be most challenging to the company's business model.
Companies racing for global market leadership:
generally have to consider establishing competitive positions in the markets of emerging countries.
A "think-local, act local" multidomestic strategy entails:
giving local managers considerable strategy-making latitude and often producing different product versions for different countries.
A strategy that incorporates elements of both multidomestic and global strategies is termed a "transnational" strategy, but sometimes it is referred to as a(n):
glocalization strategy.
The reason the world economy is globalizing at an accelerated pace is because:
growth-minded companies are racing to build stronger competitive positions in the markets of more countries.
The advantages of using an acquisition strategy to pursue opportunities in foreign markets include:
having a high level of control and speed as an entry strategy to overcome trade barriers.
The advantages of using a franchising strategy to pursue opportunities in foreign markets include:
having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees.
The diamond framework can be used to reveal the answers to all of the following that are important for competing on an international basis EXCEPT:
how to formulate an exit strategy to push foreign competitors out of the market.
The reasons why a company opts to expand outside its home market include all of the following EXCEPT:
identifying resources and capabilities in the company's home market.
Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations, EXCEPT:
if resources retain their foreign contexts so there is competitive advantage over a broader domain.
Profit sanctuaries are found to differ by a company's strategy, such that a(n):
international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share.
A primary drawback of a global strategy is that it:
involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise.
A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world:
is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported.
Companies often implement a transnational strategy because it:
is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner.
A "think local, act local" multidomestic type of strategy:
is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse.
The strength of a "think local, act local" multidomestic strategy is that:
it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.
A "think local, act local" multidomestic strategy works particularly well in all of the following situations, EXCEPT when there are:
large demands to pursue conflicting objectives simultaneously.
Companies that compete internationally can pursue competitive advantage in world markets(or offset domestic disadvantages) by:
locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination.
The big problem a franchisor faces is:
maintaining quality control due to a lack of commitment to consistency and standardization.
The difference between political risks and economic risks is that:
political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.
The risks of strategic alliances often include all of the following EXCEPT:
potential for royalty from trustworthy firms.
The approach of a firm using a "think global, act local" version of a transnational strategy entails:
pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.
The essential difference between a "think global, act global" and a "think global, act local" approach to strategy-making is that:
the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions.
In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations, EXCEPT when:
the addition of new production capacity will not adversely impact the supply-demand balance in the local market.
A global strategy allows for:
the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked.
Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous, EXCEPT when:
there are reasons to decouple buyer-related activities in favor of locational advantages.
Companies that compete on an international basis have a competitive advantage over their purely domestic rivals:
to benefit from coordinating activities across different countries' domains.
The big issue an acquisition-minded firm must consider is whether:
to pay a premium price for a successful local company or to buy a struggling firm at a discount price.
A key approach for a company to grow sales and profits in several country markets is to:
transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities.
A global strategy is one in which a company performs all of the following tasks, EXCEPT:
uses local brand names to cater to a country's specific needs.
The basic strategy options for local companies in competing against global challengers include:
utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals.
A greenfield venture in a foreign market is one:
where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up.
Companies operating in an international marketplace have to respond to all of the following, EXCEPT:
whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.
One of the biggest strategic challenges to competing in the international arena includes:
whether to offer a standardized product worldwide or a customized product offering in each different country market.
