International Business Test 4 (Philip)

According to the opening case of Chapter 13, Sony's products and services, strategically, can be classified into _______ core business segments

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A firm benefits from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems.

A turnkey strategy is particularly useful where the FDI is limited by host-government regulations.

___________ is often place near a competitor's headquarters or main operations, near the most demanding customers, or near key suppliers of unique and critically important parts.

An outpost factory

According to the opening case of chapter 15, _______________ is the American company that Gazprom allied with.

Dow Chemical Company

_________ is advantageous because it avoids the cost of establishing manufacturing operations in the host country and it may help a firm achieve experience curve and location economies.

Exporting

A wholly owned subsidiary limits a firm's control over marketing and sales in different countries.

False

Buying a product from external vendors is highly appropriate when a firm intends to protect proprietary technology.

False

Exporting from a firm's home base is most appropriate when lower-cost locations for manufacturing the product cannot be found abroad.

False

If a firm's core competence is proprietary technological knowledge, a joint venture is not preferable

False

Logistics includes the buying of raw materials and component parts

False

Managers in a source factory operate in essentially the same way that manager in an offshore factory operate. They have very little say in purchasing or logistics decisions.

False

One of the sources of economies of scale is the ability to spread fixed costs over a large volume.

False

Products such as electronic components and pharmaceuticals have low value-to-weight ratios. They are expensive and they do not weigh very much.

False

Support activities are always less important than the primary activities in achieving a competitive advantage

False

Firms pursuing a __________________ strategy try not to customize their product offering and marketing strategy to local conditions because customization involves shorter production runs and the duplication of functions, which tend to raise costs.

Global Standardization

What is the primary advantage of licensing?

It helps a firm avoid the development costs associated with opening a foreign market.

One advantage of _________________ is that the firm benefits form a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business.

Joint Venture

______________ effects refer to the cost savings that come from learning by doing.

Learning

One disadvantage of _____________ is that it does not give a firm the tight control over manufacturing marketing, and strategy that is required for realizing experience curve and location economies.

Licensing

A factory that is viewed as an intelligence-gathering unit is called an _____________ factory

Outpost

________ include the design, creation, and deliver of a product.

Primary activities

RSA is a bicycle manufacturing company. Which of the following is a make-or-buy decision that the company will have to make?

Should the company outsource production to a low-cost vendor?

A joint venture is often politically more acceptable than a wholly owned subsidiary and brings a degree of local knowledge to the subsidiary.

True

According to Porter, the way to create superior value is to drive up the cost structure of the business and/or differentiate the product in some way so that consumers value it more.

True

By producing its product in a centralized location, licensing limits a firm's ability to realize experience curve and location economies.

True

Franchising enables a firm to quickly build a global presence

True

Just-in-time systems are used to economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process and not before.

True

Other things being equal, a firm should locate its various manufacturing activities where the relative factor costs are conductive to the performance of those activities.

True

Poor product quality and low productivity are hidden costs associated with basing production in a foreign location.

True

Production is also sometimes referred to as operations as part of a global supply chain.

True

The greater the pressures for cost reductions, the more likely a firm will want to pursue some combination of exporting and wholly owned subsidiaries.

True

The preeminent strategic goal for most firms is to maximize the value of the firm for its owners and shareholders

True

The ______________ supply chain includes all of the organizations and resouces that are involved in the portion of the supply chain from raw materials to the production facility.

Upstream

The most important disadvantage of ______________________ is that it is generally the most costly method of serving a foreign market from a capital investment standpoint.

Wholly Owned Subsidiary

Many American firms that sold oil-refining technology to firms in the Gulf now find themselves competing with these firms in the world oil market. This is an example of:

a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a competitor.

The term ___________ refers to skills within the firm that competitors cannot easily match or imitate and that may exist in the firm's value creation activities.

core competence

The main advantage of ________ is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.

greenfield investment

Which of the following is a hidden cost associated with basing production in a foreign location?

high employee turnover

Products such as pharmaceuticals have

high value-to-weight ratios

An advantage of _________ with a local partner is the knowledge of the local environment that the local partner contributes to the venture.

joint ventures

Just-in-time systems

leave a firm without a buffer stock of inventory.

Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as

location economies

Packaging, which comes in all shapes, sizes, forms, and uses, can be divided into three different types:

primary, secondary, and transit.

The percentage increase in net profits over time measure...

profit growth

Economies of scale arise from which of the following sources?

serving domestic and international markets from the same production facilities

An advantage of forming a strategic alliance is that it helps firms...

share the risks of developing new products or processes.

When the firm simultaneously faces both strong cost pressures and strong pressures for local responsiveness, the ideal strategy to follow is the __________ strategy.

transnational

In a ________, the firm owns 100 percent of the company

wholly owned subsidiary