Chp 7

Which of the following does NOT accurately characterize the differences between a localized multidomestic strategy and a global strategy? A. A global strategy entails extensive strategy coordination across countries and a multidomestic strategy entails little or no strategy coordination across countries. B. A global strategy often entails use of the best suppliers from anywhere in the world, whereas a multidomestic strategy may entail fairly extensive use of local suppliers (especially where use of local sources is required by host governments). C. A global strategy tends to involve use of similar distribution and marketing approaches worldwide, whereas a multidomestic strategy often entails adapting distribution and marketing to local customs and the culture of each country. D. 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. E. A global strategy relies upon the same technologies, competencies, and capabilities worldwide, whereas a multidomestic strategy often entails the use of somewhat different technologies, competencies, and capabilities as may be needed to accommodate local buyer tastes, cultural traditions, and market conditions.

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 LIKELY to be viewed as a pro-business government policy from the perspective of companies competing on an international basis? A. Argentina increases its interest rate on loans to foreign entrants from 15% to 19%. B. The European Union imposes a 16% tariff on the import of agricultural produce. C. Australia introduces a permanent employer-sponsored visa program for skilled manpower. D. Denmark levies a per metric ton carbon tax on electricity. E. The Chinese government favors partial local ownership of foreign-owned companies.

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? A. Because decline in the value of the ringgit against the euro raises the cost of furniture manufactured in Malaysia, making it less competitive in European markets. B. Because decline in the value of the ringgit against the euro reduces the cost of furniture manufactured in Malaysia, making it more competitive in European markets. C. Because decline in the value of the ringgit against the euro has no impact on the cost of furniture manufactured in Malaysia, both in Malaysian or European markets. D. Because decline in the value of the ringgit against the euro makes European goods more competitive as compared to Malaysian goods. E. Because decline in the value of the ringgit against the euro makes Malaysian goods less competitive in the U.S. market.

Because decline in the value of the ringgit against the 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? A. Because factors that affect industry competitiveness vary from country to country B. Because of the potential for location-based advantages to conducting value chain activities in certain countries C. Because different government policies and economic conditions make the business climate more favorable in some countries than others D. Because of the risks for shifts in currency exchange rates E. Because similarities in buyer tastes and preferences facilitate standardization of products and services

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? A. Fluctuating exchange rates do not pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Companies that are manufacturing goods in a particular country and are exporting much of what they produce are disadvantaged when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D. 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. E. Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

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.

Which of the following is NOT a reason why the world economy is globalizing at an accelerated pace? A. Countries previously closed to foreign companies have opened their markets. B. Countries that previously had planned economies now embrace mixed or market economies. C. Information technology is shrinking the importance of geographic distance. D. Growth-minded companies are racing to build stronger competitive positions in the markets of more countries. E. Countries opposed to market or mixed economies have stringent trade barriers in place.

Countries opposed to market or mixed economies have stringent trade barriers in place.

Which of the following exemplifies location-based advantage for the companies competing on an international basis? A. Microsemi Corporation acquires California-based Actel Corporation. B. RBC Wealth Management closes operations in South Florida. C. Samsung diversifies and ventures into textiles and food processing. D. Hyundai signs a memorandum of understanding with the government of South Korea to halt exports. E. De Beers sets up operations in the mining region of South Africa.

De Beers sets up operations in the mining region of South Africa.

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? A. Prepare to compete on the basis of low price. B. Modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding). C. Change the local market to better match the way the company does business elsewhere. D. Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly. E. Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.

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 strategies identifies a multidomestic approach? A. Texas Instruments strongly encourages its trading partners to use the UN/EDIFACT standard. B. Hard Rock Cafes in Hawaii offer fish tacos and ahi tuna sandwich. C. Coca Cola's general market approach is controlled from Atlanta. D. Nestle established its own distribution network in China. E. Air Asia adapts its price to industry pressures.

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? A. Mahindra and Mahindra ranked number one in J. D. Power Asia Pacific's new-vehicle overall quality category. B. Home Depot could rely on its value propositions only in some developing countries. C. Unilever developed a low-cost detergent, named Wheel, for the Indian market. D. Japan is known for its competitive strength in consumer electronics. E. In China, Dell moved from its traditional Internet-based orders to orders over phone and fax.

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? A. In global competition, rivals vie for worldwide market leadership and the leading competitors compete head-to-head in the markets of many different countries. B. In globally competitive industries, a company's competitive position in one country both affects and is affected by its position in other countries. C. In multidomestic competition, there is greater cross-country variation in market conditions and the nature of the competitive contest among rivals than tends to be the case in globally competitive markets. D. With multidomestic competition, the competitive contest is localized, with rivals battling for national market leadership; moreover, winning in one country market does not necessarily signal that a company has the ability to fare well in the markets of other countries. E. 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.

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? A. In global competition, rivals vie for worldwide market leadership. B. In globally competitive industries, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C. In global competition, a firm's overall competitive advantage (or disadvantage) grows out of its entire worldwide operations. D. In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails. E. In global competition, many of the same rival companies compete against each other in many different countries, but especially so in countries where sales volumes are large and where having a competitive presence is strategically important to building a strong global position in the industry.

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? A. It could create attractive industries that would have otherwise badly deteriorated. B. It could produce a business lineup consisting of too many slow-growth, declining, low-margin, or competitively weak businesses. C. It could create a greater diversity in the types of value chain activities between each business. D. 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. E. It could increase shareholder interests by concentrating corporate resources on foreign business activities to contend for market leadership.

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? A. It hinders the use of cross-border coordination of a company's activities and increases a company's vulnerability to adverse shifts in currency exchange rates. B. It makes it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods. C. It makes it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions. D. 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. E. It is unsuitable for competing in the markets of emerging countries and posing added difficulty in modifying a company's business model to compete on the basis of low price.

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? A. It demands managerial attention to be focused on objective-setting specifically oriented toward production practices. B. 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. C. It requires that the best identified resources and capabilities be centralized at headquarters. D. It requires value chain activities to be dispersed across many countries to elevate cost control management as a primary focus in all countries. E. It requires giving local managers considerable latitude for executing strategies for the country markets they are responsible for.

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.

Which of the following is NOT an accurate statement as concerns competing in the markets of foreign countries? A. Localizing a global company's product offerings country-by-country leads to low-cost advantage. B. There are country-to-country differences in consumer buying habits and buyer tastes and preferences. C. A company must contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements. D. Product designs suitable for one country are often inappropriate in another. E. Market growth rates vary from country to country.

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? A. Nike produces its own line of skate shoes. B. Starbucks acquires a large coffee farm in Costa Rica. C. Ireland provides low-costs loans to foreign entrants to stimulate capital investment. D. Intel's silicon chips are identical across the world. E. McDonald's offers 100% beef-free products in its outlets in India.

McDonald's offers 100% beef-free products in its outlets in India.

Which of the following countries had the highest labor wage rates in 2013? A. Canada B. China C. Norway D. South Korea E. United States

Norway

Which of the following does NOT exemplify cross-country differences in demographic, cultural, and market conditions? A. Fisher and Paykel produces energy-efficient, top-loading washing machines for sale in France. B. Starbucks develops a new line of Vietnamese coffee drinks for sale in Southeast Asian markets. C. Ireland provides low-costs loans to foreign entrants to stimulate capital investment. D. Pizza Hut's store layouts and menus are identical across the world. E. Ben & Jerry's Ice Cream produces kimchi-flavored ice cream for sale in South Korea.

Pizza Hut's store layouts and menus are identical across the world.

Which of the following is an example of a cross-border alliance? A. Facebook took over WhatsApp for $19 billion in February 2014. B. Hyundai Motor Company plans to open a new manufacturing plant in the Czech Republic. C. The insurance company Geico is a wholly owned subsidiary of Berkshire Hathaway. D. Renault-Nissan sells more than one in ten cars worldwide. E. Carrefour, a French grocery chain, established a new wholly-owned venture in Poland.

Renault-Nissan sells more than one in ten cars worldwide.

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? A. Such ventures can require costly capital investments. B. Such ventures can have a tendency to divert valuable resources from current business. C. Such ventures really need well-functioning strong markets. D. Such ventures are the fastest entry route to achieve a sizeable market share. E. Such ventures require legal protections of foreign investors.

Such ventures are the fastest entry route to achieve a sizeable market share.

Which of the following is an example of an export strategy? A. The popular Harry Potter character Voldemort can only be leased or rented for use by amusement park operators. B. ZipCar allows taxi fleet operators to use its trademarks, services, and products for a fee. C. The Unites States is home to the world's three largest producers and suppliers of artificial heart valves. D. American Airlines' common stock, owned by AMR Corp., is not available for public purchase. E. Facebook generates 51% of its advertising revenue outside the United States.

The Unites States is home to the world's three largest producers and suppliers of artificial heart valves.

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is NOT accurate? A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Exporters win when the currency of the country from which the goods are being exported grows weaker relative to the currencies of the countries that the goods are being exported to. D. The advantages of manufacturing goods in a particular country can be undermined when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

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? A. Buyers in different countries are attracted to different product attributes. B. The benefits from global integration and standardization are high. C. Industry conditions and competitive forces in each national market differ in important respects. D. The mix of competitors in each country market varies from country to country. E. Winning in one country market does not necessarily signal the ability to fare well in other countries.

The benefits from global integration and standardization are high.

A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States. A. This is a true statement. B. No, the U.S. dollar must be stronger. C. Yes, because it provides for a weakened foreign demand for U.S.-made goods. D. Yes, because it makes such plants less cost competitive with foreign plants. E. Yes, because it provides incentives of foreign companies to locate manufacturing facilities in the U.S. to make goods for U.S. consumers.

This is a true statement.

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? A. Develop business models that exploit shortcomings in local distribution networks or infrastructure. B. Utilize keen understanding of local customer needs and preferences to create customized products or services. C. Take advantage of aspects of the local workforce with which large international companies may be unfamiliar. D. Transfer company expertise to cross-border markets and initiate actions to contend on an international level. E. Use acquisition and rapid-growth strategies to better defend against expansion-minded internationals.

Transfer company expertise to cross-border markets and initiate actions to contend on an international level.

Which of the following is an NOT an example of a cross-border alliance? A. A New York-based wine importer and an Australian wine producer create and market the Yellowtail wine brand. B. Pharmaeutical giants Eli Lilly and Kyowa Hakko Kogyo develop and perform clinical tests of a new cancer treatment called therapyyo. C. The insurance company Geico is a wholly owned subsidiary of Berkshire Hathaway. D. Western Union purchases the global payments division of British-owned Travelex Ltd. E. Lidl, a German deep-discount supermarket chain, establishes a new wholly-owned venture with a supermarket chain in Poland.

Western Union purchases the global payments division of British-owned Travelex Ltd.

The diamond framework is NOT LIKELY to answer which of the following questions about competing on an international basis? A. Where will the foreign entrants come from? B. Which countries have the weakest foreign rivals? C. What are the attributes of a country's business environment? D. What location of value chain activities is most beneficial? E. What are the disadvantages of allowing foreign competition?

What are the disadvantages of allowing foreign competition?

During the 1980s, the YKK Group developed and manufactured all its fastening products within Japan. Which of the following aspects of the global strategy was YKK trying to achieve? A. YKK catered to homogenous buyer needs across countries and regions. B. YKK centralized its value chain thereby facilitating centralized control. C. YKK engaged in higher levels of R&D by spreading risks over higher-volume output. D. YKK sold the same products under the same brand name everywhere. E. YKK established a single plant to produce different versions of the same product.

YKK centralized its value chain thereby facilitating centralized control.

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 A. control over its resource capabilities. B. a dominating depth in some competitively valuable area. C. an intensity of resource diversification. D. precision and compliance in resource agility and responsiveness. E. direct investments in foreign countries.

a dominating depth in some competitively valuable area.

Transferring core competencies and resource strengths from one country market to another is A. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage. B. best accomplished with a multidomestic strategy as opposed to a global strategy. C. feasible only with a global strategy; it can't be done with a multidomestic strategy. D. unlikely to result in a competitive advantage. E. nearly always the easiest and most sure-fire way to build competitive advantage in trying to compete successfully in foreign markets.

a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.

Which of the following is NOT one of the strategy options for competing in the markets of foreign countries? A. a profit sanctuary strategy B. an international strategy C. a global strategy D. a multidomestic strategy E. a transnational strategy

a profit sanctuary strategy

What strategy is considered more conducive to transferring and leveraging subsidiary skills and capabilities across borders? A. a transnational strategy B. an international strategy C. a think-local, act-global strategy D. a cross-border integrated strategy E. a standardized integrated strategy

a transnational strategy

The advantages of manufacturing goods in a particular country and exporting them to foreign markets A. are largely unaffected by fluctuating exchange rates. B. are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders. C. can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. D. are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. are multiplied by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.

The advantages of manufacturing goods in a particular country and exporting them to foreign markets A. are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. B. are greatest when local consumers prefer products manufactured inside the country's borders. C. are largely unaffected by fluctuating exchange rates. D. can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. E. are largely unaffected by tariffs or quotas.

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 A. is competitively disadvantaged when the euro declines in value against the Brazilian real. B. is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C. 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. D. is competitively advantaged when the euro appreciates in value against the Brazilian real. E. has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.

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.

An Irish dairy producer that exports gourmet cheeses made at its Kerry plants to the United States A. is competitively disadvantaged when the euro declines in value against the U.S. dollar. B. is largely unaffected by fluctuating exchange rates between the euro and the U.S. dollar. It would, however, be affected if its plants were in the U.S. C. becomes less competitive in the U.S. market when the euro rises in value against the U.S. dollar. D. becomes more competitive in European markets when the euro declines in value against the U.S. dollar. E. has no interest in whether the euro grows stronger or weaker versus the U.S. dollar unless its chief competitors are other companies located in countries whose currency is also the euro.

becomes less competitive in the U.S. market when the euro rises in value against the U.S. dollar.

A U.S. organic personal hygiene product manufacturer that exports toothpaste and deodorant made at its U.S. plants for shipment to the U.K. market A. is competitively disadvantaged when the U.S. dollar declines in value against the British pound. B. is largely unaffected by fluctuating exchange rates. It would, however, be affected if its plants were in the U.K or other foreign countries. C. becomes more competitive in the U.K. when the U.S. dollar gains in value against the British pound. D. becomes more competitive in the U.K. when the U.S. dollar declines in value against the British pound. E. has no interest in whether the dollar grows stronger or weaker versus the British pound unless it is competing only against companies located in the U.K.

becomes more competitive in the U.K. when the U.S. dollar declines in value against the British pound.

The advantages of using a licensing strategy to participate in foreign markets include A. being especially well-suited to achieve scale economies. B. being able to charge lower prices than rivals. C. being able to achieve first-mover advantages quickly and easily. D. being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets. E. being able to achieve higher product quality and better product performance than with an export strategy.

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 A. executing a global domination strategy that focuses the company's resource strengths on entry strategies across all country boundaries. B. ensuring that value chain activities are defined by country-specific attributes to capitalize on economies of scale. C. building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another. D. elevating resources and capabilities developed on a country-by-country basis so as to capitalize on a country's uniqueness. E. implementing mass-customization techniques that can address local preferences efficiently.

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 A. can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets. B. can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country and does not have to compete head-to-head against strong host country competitors. C. can be a powerful strategy since a company can maintain a one-country production base allowing it to capitalize on company competencies and capabilities. D. can be a weak strategy when competitors are pursuing multi-country strategies. E. can be a powerful strategy because a company is not vulnerable to fluctuating exchange rates.

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 A. being able to shift production from one country to another to take advantage of exchange rate fluctuations, differing wage rates, differing energy costs, or differing trade restrictions. B. being in better position to choose where and how to challenge rivals. C. shortening delivery times to customers by having geographically scattered distribution facilities. D. locating buyer-related activities (such as sales, advertising, after-sale service and technical assistance) close to buyers. E. centralizing value chain activities to foster just-in-time inventory activities.

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 A. employ either an export strategy or a franchising strategy. B. scatter its production plants across many countries in different parts of the world so as to minimize transportation costs. C. 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. D. locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs. E. concentrate all of its value chain activities in the one country that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

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.

A "think-global, act-global" approach to strategy making is preferable to a "think-local, act-local" approach when A. a big majority of the company's rivals are pursuing localized multidomestic strategies. B. country-by-country differences are small enough to be accommodated within the framework of a mostly uniform global strategy. C. host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards. D. plants need to be scattered across many countries to avoid high shipping costs. E. market growth rates vary considerably from country to country.

country-by-country differences are small enough to be accommodated within the framework of a mostly uniform global strategy.

Competing in the markets of foreign countries generally does NOT involve which of the following? A. country-to-country differences in consumer buying habits and buyer tastes and preferences B. country-to-country variations in host government restrictions and requirements and fluctuating exchange rates C. whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide D. in which countries to locate company operations for maximum locational advantage, given country-to-country variations in wage rates, worker productivity, energy costs, tax rates, and the like E. 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

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 one of the four conditions that make entry via an internally developed start-up strategy in a foreign country appealing? A. having scale economies to compete against local rivals B. having the ability to gain increased access to distribution channels and networks C. adding new production capacity will adversely impact the supply-demand balance in the local market D. creating an internal start-up is cheaper than making an acquisition E. creating an internal start-up is cheaper than entering into strategic alliances and cooperative agreements

creating an internal start-up is cheaper than entering into strategic alliances and cooperative agreements

Which of the following is NOT an advantage of strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms? A. competing on a more global scale while still preserving their independence B. gaining better access to scale economies in production and/or marketing C. filling competitively important gaps in their technical expertise and/or knowledge of local markets D. sharing distribution facilities and dealer networks, thus mutually strengthening their access to buyers E. creating permanent arrangements between the 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? A. cross-border transfer activities and home country advantages B. the nature of the firm's objectives C. whether the firm has a full range of resources and capabilities needed to operate abroad D. country-specific factors such as trade barriers E. transaction costs involved (the cost of contracting with a partner and monitoring compliance with the terms of the contract)

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? A. cross-market subsidization B. a foreign market strategy C. a domestic-only company D. a home market offensive E. a multidomestic company

cross-market subsidization

What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets? A. deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country B. deciding on the appropriate level of sustainable profitability C. deciding on the relative cost competitiveness of the home country D. deciding on the degree of globalization to maintain expansion capabilities E. deciding on the resources and capabilities of allies

deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country

Profit sanctuaries are country markets or geographic regions where a company A. can rank the competitive advantage opportunities in each industry. B. possesses good strategic fit with other businesses and identifies the value chain where this fit occurs. C. derives substantial profits because of its protected market position or unassailable competitive advantage. D. creates substantial investment strategies because it is losing competitive advantage over competitors. E. invests its dividends in expanding its foreign market presence.

derives substantial profits because of its protected market position or unassailable competitive advantage.

Market size and growth rates in different countries can be influenced positively or negatively by A. the ability of management to tailor a strategy to take into consideration differences among country markets. B. which countries have the weakest foreign rivals. C. competitive rivalry that is only moderate in some countries. D. differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries. E. the large size of emerging markets such as Brazil, Russia, China, and India.

differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries.

Which of the following is NOT a risk of cross-border alliances between domestic and foreign firms? A. overcoming language and cultural barriers B. launching new initiatives to stay abreast of shifting market conditions C. developing mutually agreeable ways of dealing with key issues or differences D. disengaging from the alliance once its purpose has been served E. becoming overly dependent on foreign partners for essential expertise

disengaging from the alliance once its purpose has been served

In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by A. building a state-of-the-art facility to fully capture scale economies via an export strategy. B. using export, licensing, or franchising strategies so as to minimize risk and capital investment. C. locating buyer-related activities in all countries where it sells its product. D. 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. E. avoiding the use of strategies that entail coordinating its domestic strategic moves with its strategic moves in the various foreign markets it enters.

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.

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? A. dumping practices B. price-clearing system C. clearance sale D. discounting practices E. competitive advantage

dumping practices

Viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets include all of the following, EXCEPT A. trying to change the local market to better match the way the company does business elsewhere. B. being prepared to modify aspects of the company's business model to accommodate local circumstances. C. preparing to compete on the basis of low price. D. staying away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances. E. focusing on local markets whose circumstances will be most challenging to the company's business model.

focusing on local markets whose circumstances will be most challenging to the company's business model.

What factor is NOT LIKELY responsible for Apple's decision to set up mobile phone manufacturing facilities in India? A. growth potential of India's emerging market B. global standardization of mobile phone technology C. potential location advantages in wages, inflation rates, and tax rates that reduce costs D. franchising opportunities in India E. comparatively lower exchange rate and political risks

franchising opportunities in India

The primary reasons that companies opt to expand into foreign markets are to A. raise the entry barriers for industry newcomers, neutralize the bargaining power of important suppliers, grow sales faster, and increase the number of loyal customers. B. avoid having to employ an export strategy, avoid the threat of cross-market subsidization from rivals, and enable the use of a global strategy instead of a multidomestic strategy. C. grow sales faster than the industry average, reduce the competitive threats from rivals, and open up more opportunities to enter into strategic alliances. D. boost returns on investment, broaden their product lines, avoid tariffs and trade restrictions, and escape dealing with strong labor unions. E. gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.

gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.

Acquisition of an existing firm rather than via internal development may be the least risky and cost-efficient means of overcoming entry barriers such as A. putting its own strategy into place. B. accelerating efforts to build a strong market presence. C. moving directly to the task of transferring resources and personnel, integrating and redirecting activities into its own operation. D. fast-tracking exports into a foreign market by marketing indirectly thru local rivals. E. gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.

gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.

Companies racing for global market leadership A. generally have to consider establishing competitive positions in the markets of emerging countries. B. are well-advised to avoid all the risks and problems of competing in emerging country markets. C. seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage to the domestic market leaders. D. can usually be expected to earn sizable profits quickly in emerging country markets. E. usually encounter very low barriers in entering the markets of emerging countries.

generally have to consider establishing competitive positions in the markets of emerging countries.

A "think-local, act-local" multidomestic strategy entails A. offering a narrow product line aimed at serving buyers in the same segments of country markets worldwide. B. giving local managers considerable strategy-making latitude and often producing different product versions for different countries. C. adopting aggressive efforts to locate facilities in those country markets that have superior resources. D. pursuing strong product differentiation and competing in many buyer segments. E. extensive efforts to transfer a company's competencies and resource strengths from one country to another so as to keep entry costs into new country markets low.

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) A. glocalization strategy. B. international strategy. C. think-local, act-global strategy. D. cross-border integrated strategy. E. standardized integrated strategy.

glocalization strategy.

A localized or multidomestic strategy A. is generally inferior to a global strategy when it comes to pursuing product differentiation. B. has two big drawbacks: (1) it hinders transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities; and (2) it does not promote building a single, unified competitive advantage, especially one based on low cost. C. is generally preferable to a global strategy in situations where buyers are price sensitive because a "think-local, act-local" type of multidomestic strategy is better suited to achieving low unit costs than a global strategy. D. is generally best suited for globally standardized industries, in which small country-by-country differences can be accommodated. E. involves much less adherence to using the same basic competitive strategy theme (low-cost, differentiation, best-cost, or focused) in all country markets.

has two big drawbacks: (1) it hinders transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities; and (2) it does not promote building a single, unified competitive advantage, especially one based on low cost.

The advantages of using an acquisition strategy to pursue opportunities in foreign markets include A. having a high level of control and speed as an entry strategy to overcome trade barriers. B. allowing a company to achieve scalable economies. C. eliminating the costs and risks associated with establishing a foreign business location. D. achieving variable product quality and competitive product performance. E. exporting goods at higher costs than rivals in those locations.

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 A. 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. B. being particularly well-suited to the global expansion efforts of companies with multidomestic strategies. C. allowing a company to achieve scale economies. D. being well suited to companies who employ cross-border transfer strategies. E. being well suited to the global expansion efforts of manufacturers.

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 reasons why a company opts to expand outside its home market include all of the following EXCEPT A. gaining access to new customers for the company's products/services. B. spreading its business risk across a wider market base. C. achieving lower costs through economies of scale, experience, and increased purchasing power. D. exploiting its core competencies and capabilities. E. identifying resources and capabilities in the company's home market.

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 A. when high transportation costs make it expensive to operate from central locations. B. whenever buyer-related activities are best performed in locations close to buyers. C. if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. D. when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions or (3) adverse political developments. E. if resources retain their foreign contexts so there is competitive advantage over a broader domain.

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) A. domestic-only company has access to many profit sanctuary locations worldwide. B. 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. C. globally competitive company generally has a profit sanctuary outside its home market in countries where it is a market leader and enjoys a strong competitive position. D. transnational company has profit sanctuaries in every country where it operates. E. company competing in a few country markets has more profit sanctuaries.

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 A. allows firms to address local needs as precisely as locally based rivals can. B. permits firms to be more responsive to changes in local market conditions, either in the form of new opportunities or competitive threats. C. provides for lower transportation costs and also may involve higher tariffs. D. involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise. E. raises production costs due to the greater variety of designs and components.

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 A. is competitively disadvantaged when the U.S. dollar declines in value against the Brazilian real. B. 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. C. becomes less competitive in foreign markets when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. D. is competitively advantaged when the U.S. dollar appreciates in value against the Brazilian real. E. is unaffected by changes in the valuation of foreign currencies against the Brazilian real—all that matters to a U.S. company is the valuation of the U.S. dollar against the Brazilian real.

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 A. combines flexible coordination with the pursuit of conflicting objectives simultaneously. B. provides an easy mode of operating to transfer and share resources and capabilities across borders. C. is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner. D. is the least complex and easiest to implement of all the strategy choices. E. is capable of achieving an efficiency potential through centralized decision making and strong headquarter control.

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 A. is very risky, given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods. B. is usually defeated by a "think-global, act-global" type of strategy. C. is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse. D. is generally an inferior strategy when one or more foreign competitors are pursuing a global low-cost strategy. E. can defeat a global strategy if the "think-local, act-local" multicountry strategist concentrates its efforts exclusively in those foreign markets which have superior resources.

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 A. it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country. B. it employs strategies that are almost totally different from and also unrelated to its strategies in other countries. C. it operates independent plants, located in different countries, thus promoting greater achievement of scale economies. D. it avoids host country ownership requirements and import quotas. E. it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.

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? A. different styles of management, organization, and strategy B. knowledge sharing within same value chain system C. availability of natural resources at low cost D. growth potential and large size of the market E. government policies in the host country

knowledge sharing within same value chain system

A "think-local, act-local" multidomestic strategy works particularly well in all of the following situations, EXCEPT when there are A. regulations enacted by the host governments requiring that products sold locally meet strictly defined manufacturing specifications or performance standards. B. significant country-to-country differences in customer preferences and buying habits. C. diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country-to-country. D. significant country-to-country differences in distribution channels and marketing methods. E. large demands to pursue conflicting objectives simultaneously.

large demands to pursue conflicting objectives simultaneously.

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? A. significant scale economies B. learning-curve effects C. superior resources D. profit sanctuaries E. supporting industries

learning-curve effects

Which of the following is NOT a factor analyzed by firms when developing competitive strength in a foreign market? A. buyer tastes for a particular product or service sometimes differing substantially from country to country B. competitive pressures to lower costs C. competitive risks associated with a fluctuating exchange rate D. degree of country political risk E. level of industry-related support activities to foster customization of products and services

level of industry-related support activities to foster customization of products and services

Companies that compete internationally can pursue competitive advantage in world markets (or offset domestic disadvantages) by A. using a differentiation-based competitive strategy in those country markets with superior resources. B. choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals. C. using an export strategy to circumvent the risks of adverse exchange rate fluctuations. D. 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. E. employing a multidomestic strategy instead of a global strategy.

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 A. allowing franchisees to achieve scale economies. B. maintaining quality control due to a lack of commitment to consistency and standardization. C. eliminating the costs and risks associated with establishing a foreign business location. D. sharing foreign facilities and marketing strategies with local businesses. E. achieving higher product quality and better product performance than with an export strategy.

maintaining quality control due to a lack of commitment to consistency and standardization.

The difference between political risks and economic risks is that A. 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. B. political risks stem from stability in foreign business, while economic risks stem from an excess of property right protections. C. political risks stem from hostility to foreign currencies, while economic risks stem from the instability of the monetary system. D. political risks stem from exchange rate fluctuations, while economic risks stem from hostility to foreign business. E. political risks stem from the stability of a country's monetary system, while economic risks stem from instability in national business.

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 A. conflicting objectives and strategies. B. deep differences of opinion about how to proceed operationally and strategically. C. important differences in corporate values. D. misunderstandings about appropriate ethical standards. E. potential for royalty from trustworthy firms.

potential for royalty from trustworthy firms.

Which of the following is NOT a strategic option for expansion into foreign markets? A. employing a franchising strategy using local ownership B. relying on strategy alliances, joint ventures, or other cooperative agreements with foreign companies C. pursuing a profit sanctuary strategy D. establishing a subsidiary via acquisition or greenfield development E. maintaining a national (one-country) production base and exporting goods to foreign markets

pursuing a profit sanctuary strategy

The approach of a firm using a "think-global, act-local" version of a transnational strategy entails A. producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. B. having little or no strategy coordination across countries. C. 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. D. selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so buyers in each country market will think they are buying a locally made brand. E. selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country), but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

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 transnational approach of a firm using a "think-global, act-local" version of a global strategy entails A. selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country) but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market. B. 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. C. selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so that buyers in each country market will think they are buying a locally made brand. D. producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. E. little or no strategy coordination across countries.

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 strategic options for expansion into foreign markets do not include A. relying on home country governments to restrict imports via raising tariffs and local content requirements. B. establishing a subsidiary in a foreign market. C. maintaining a national (one-country) production base and exporting goods to foreign markets. D. licensing foreign firms to produce and distribute one's products. E. employing a franchising strategy using local ownership.

relying on home country governments to restrict imports via raising tariffs and local content requirements.

Which of the following is NOT a typical host government requirement that affects the operations of foreign companies? A. establishing local content requirement on goods made inside their borders by foreign companies B. having rules and policies that protect local companies from foreign competition C. placing restrictions on exports to ensure adequate local supplies D. requiring foreign companies to use vertical integration to support operations of local companies E. imposing burdensome tax structures and regulatory requirements upon foreign companies doing business within their borders

requiring foreign companies to use vertical integration to support operations of local companies

Which of the following is the most unlikely element of a localized multidomestic strategy? A. granting country managers fairly wide strategy-making latitude B. scattering plants across many host countries, each producing product versions for local area markets C. adapting marketing and distribution to the buying habits, customs, and culture of each host country D. considering the preference for local suppliers (use of some local suppliers may be mandated by host governments) E. selling directly to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market

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? A. promotes fair trade practices B. actively polices dumping C. deals with the rules of trade between nations D. helps producers, exporters, and importers conduct business E. sets countries' tariff rates

sets countries' tariff rates

Government policies that can make it more attractive for foreign companies to locate operations abroad include all of the following EXCEPT A. tax incentives. B. stringent environmental compliance regulations. C. site development assistance. D. low cost loans. E. reduced tariffs, quotas, and percentages of local content required in production of products and services.

stringent environmental compliance regulations.

The essential difference between a "think-global, act-global" and a "think-global, act-local" approach to strategy-making is that A. a "think-global, act-global" approach entails extensive strategy coordination across countries and a "think-global, act-local" approach entails little or no strategy coordination across countries. B. the former aims at implementing the same business model worldwide, whereas the latter aims at implementing customized business models to better match local market circumstances. C. the "think-global, act-global" 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. D. a "think-global, act-global" approach involves selling a mostly standardized product worldwide, whereas a "think-global, act-global" approach entails selling products that are highly differentiated from country to country. E. a "think-global, act-global" approach involves selling under a single brand name worldwide, whereas a "think-global, act-local" approach entails utilizing multiple brands (typically one for each different country or group of neighboring countries).

the "think-global, act-global" 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 A. there are significant scale economies in performing an activity. B. the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. C. when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations). D. certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E. the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

A global strategy allows for A. the leading companies to compete for the biggest share of the world market, but only occasionally compete head-to-head in different countries. B. the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked. C. a company's overall market strength to be the sum of its market shares in each country market where it has a presence. D. the industry leaders to be foreign companies, while domestic companies are relegated to runner-up status. E. a firm's overall competitive advantage to be determined by the size of the competitive advantage it has in each of its profit sanctuaries.

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 A. buyer-related activities (such as sales, advertising, after-sale service and technical assistance) need to take place close to buyers. B. buyers demand short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations. C. it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments. D. there are diseconomies of scale in trying to operate from a single location. E. there are reasons to decouple buyer-related activities in favor of locational advantages.

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 A. to achieve a larger domestic interest by developing sufficient resource strengths and competitive capabilities for success. B. to benefit from coordinating activities across different countries' domains. C. solely for the benefit of their shareholders. D. that guarantees the generation of big profits, big returns on investment, and big cash surpluses after dividends are paid. E. to give full access to the proprietary technological expertise or other competitively valuable capabilities.

to benefit from coordinating activities across different countries' domains.

Which of the following is NOT a possible reason why Uber opted to expand its on-demand transportation services into foreign markets? A. to spread its business risk across a wider geographic market base B. to capitalize on company competencies and capabilities C. to gain access to new customers in new markets D. to build the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market E. to achieve lower costs and enhance the firm's competitiveness.

to build the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market

Why do companies decide to enter a foreign market? A. to capture economies of scale in product development, manufacturing, or marketing B. to raise input costs through greater pooled purchasing power C. to decrease the rate at which they accumulate experience and move up the learning curve D. to concentrate risk within a broader base of countries, especially when sales are down in one area and the company can undermine sales elsewhere E. to exploit the natural resources found within its home 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 Baku, Azerbaijan. Which of the following is most likely the reason for Exxon Mobil to opt for this strategic alliance? A. to gain access to new customers B. to scale back its core competencies C. to restrict its factors of production D. to gain access to low-cost inputs of production E. to better compete with Gazprom

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? A. to spread business risk across a wider geographic market base B. to capitalize on company competencies and capabilities C. to achieve lower costs through economies of scale, experience, and increased purchasing power D. to impart technical knowledge to high-cost human resources in developing nations E. to gain access to more buyers for the company's products/services

to impart technical knowledge to high-cost human resources in developing nations

The big issue an acquisition-minded firm must consider is whether A. to acquire the firm at a price that cannot recapture the investment. B. to require the acquired firm's resources and management capability to sustain the ongoing struggling operation. C. to pay a premium price for a successful local company or to buy a struggling firm at a discount price. D. to pay a price that builds in all the synergistic advantages to the acquired firm. E. to pay a very high premium price that sends a signal to the market that the new firm has arrived.

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 A. transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities. B. employ a multidomestic strategy rather than a global strategy. C. locate technical after-sale services close to buyers. D. minimize transportation costs among these markets. E. take advantage of less restrictive restrictions and requirements of host governments.

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 A. employs the same basic competitive approach in all countries where it operates. B. sells much of the same products everywhere. C. strives to build global brands. D. coordinates its actions worldwide with strong headquarters control represents a think-global, act-global approach. E. uses local brand names to cater to a country's specific needs.

uses local brand names to cater to a country's specific needs.

Which of the following is NOT a viable strategy option for a local company in competing against global challengers? A. using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments B. developing business models to exploit shortcomings in local distribution networks or infrastructures C. taking advantage of low-cost labor and other competitively important local workforce qualities D. transferring a company's expertise to cross-border markets and initiating actions to contend on a global scale E. using acquisitions and rapid growth strategies to defend against expansion-minded multinationals

using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments

The basic strategy options for local companies in competing against global challengers include A. best-cost provider and focused low-cost provider and low-cost leadership strategies. B. export strategies, licensing strategies, and cross-border transfer strategies. C. 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. D. franchising strategies, multidomestic strategies keyed to product superiority, global low-cost leadership strategies, and cross-border coordination strategies. E. focused differentiation and broad differentiation strategies.

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.

In which of the following situations is employing a "think-local, act-local" multidomestic strategy highly questionable? A. when a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide B. when there are significant country-to-country differences in customer preferences and buying habits industry is characterized by big economies of scale and strong experience curve effects C. when the trade restrictions of host governments are diverse and complicated D. when there are significant country-to-country differences in distribution channels and marketing methods E. when host governments enact regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards

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? A. when an internal startup is more costly B. when an internal startup affects the supply-demand balance by increasing production capacity C. when an internal startup is unable to gain distribution access advantages D. when an internal startup has the necessary scale and resource strengths to compete with rivals E. when an internal startup lacks the experience in establishing new subsidiaries

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? A. when the need for local responsiveness is minimal and when potential efficiency gains from standardization is unrestricted by cross-country opportunities B. when the local manager is intellectually savvy C. when the local market provides strong opportunity for growth and profitability D. 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 E. when the need for centralized decision making is relevant due to various macroeconomic and market conditions

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

A greenfield venture in a foreign market is one A. 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. B. where foreign facilities and marketing strategies are shared with local businesses. C. where the company learns through training by the foreign entity on how to compete. D. that supports exports into a foreign market by marketing indirectly thru local rivals. E. that offers lower risk and a faster path to financial returns.

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 A. whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B. whether to pursue a strategy of offering a mostly standardized product worldwide. C. how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. D. the tensions between market pressures to localize a company's product offerings country by country and the competitive pressures to lower costs through greater product customization. E. whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.

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 A. how to leverage the opportunities arising from shifting exchange rates. B. how to charge the same price in all country markets. C. how to identify foreign firms licensed to produce and distribute the company's products. D. whether to offer a standardized product worldwide or a customized product offering in each different country market. E. whether to pursue a franchising strategy or a joint venture strategy.

whether to offer a standardized product worldwide or a customized product offering in each different country market.

When a company operates in the markets of two or more different countries, its foremost strategic decision is A. whether to test the waters with an export strategy before committing to some other competitive approach. B. whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries. C. whether to maintain a national (one-country) manufacturing base and export goods to the other countries. D. which foreign companies to team up with via strategic alliances or joint ventures. E. whether to use strategic alliances to help defeat its rivals.

whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.