ch 10, 11, 12

The administrative and political distance between two trading countries decreases when

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

Milk Benefits Inc., a company popular for its dairy products, successfully follows a multidomestic strategy. Andrew Products Inc., a large conglomerate, pursues a transnational strategy. Which of the following statements is most likely true of this scenario?

Both Milk Benefits Inc. and Andrew Products Inc. will have to duplicate key business functions in multiple host countries.

Communities of learning are metropolitan areas that have large numbers of high school graduates who are ready for a university education.

False

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

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

Makes Scents Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. PriceSmasher Inc., a supermarket chain, follows a multidomestic strategy. Which of the following statements is most likely true of this scenario?

Makes Scents Inc. will sell the same products in both domestic and foreign markets, whereas PriceSmasher Inc. will customize its product offerings to suit local requirements.

Heaven Freezes Over (HFO) is a company that makes frozen lunch and dinner entrées. Based on what you know about companies like Nestlé, what action should HFO take as it strives to become multinational?

Pursue a multidomestic strategy, customizing product offerings to suit local preferences.

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

True

In recent years as economic forces have changed, many governments and multinational enterprises have been more interested in negotiating bilateral trade agreements between countries rather than multinational agreements through international agencies.

True

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

True

Save On Everything Inc., a supermarket chain, is implementing a multidomestic strategy. Solar Future Inc., a company that manufactures solar panels for commercial and domestic purposes, is pursuing a global-standardization strategy. How will the two companies most likely differ from each other?

Unlike Solar Future Inc., Save On Everything Inc. will be able to pursue a differentiation strategy at the business level.

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

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

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

a firm that extracts and exports iron ore

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

acquiring an airplane-parts manufacturer in another country

The transnational strategy is similar to a(n) ________ strategy because they both focus on product differentiation and low costs.

blue ocean

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

factor

Vermilion Inc., a manufacturer of high-technology medical devices, has its product development centers located in the United States and South Korea. The manufacturing units are located in China and the Philippines to benefit from low-labor costs and access to original equipment manufacturers. This allows the company to competitively price its devices. Also, the various phone models sold by the company are uniform in all the foreign markets it operates in. In this scenario, which of the following strategies does Vermilion most likely pursue?

global-standardization strategy

Emirates, Etihad Airlines, and Qatar Airways are a threat to U.S. legacy carriers because they offer

higher quality for lower costs for international routes.

A greater cultural distance between two trading countries

increases the liability of foreignness.

Worldwide Minerals Inc. wants to expand into the international market. It does not want to spend a very large amount of money for this process. However, Worldwide Minerals wants to maintain some control in the foreign market. Which of the following would be the best entry mode for this firm?

joint ventures

Unilever's new-concept center is situated in downtown Shanghai, China, attracting hundreds of eager volunteers to test the firm's latest product innovations on-site while Unilever researchers monitor consumer reactions. In this example, Unilever is trying to reap the benefits of

location economies

Downshift Autos Inc. has shifted its research and development unit from its home country to Germany. This allows the company to be better informed about the latest developments in the automotive industry by tapping into the highly advanced automotive industry in Germany. In this scenario, Downshift Autos Inc. is reaping the benefits of

location economies.

A trend observed during the Globalization 3.0 stage involves

multinational companies organizing as global-collaboration networks.

A payroll company in the nation of Antono is seeking to expand beyond its borders while limiting administrative and political distance in the new country. Which potential site is the best one for this type of expansion?

one that used to have a colonizer or colonized relationship with Antono

Planet Resource Inc. is a global internet company that offers country-specific variations of its sites, keeping in mind the linguistic and religious differences between the countries it serves. Planet Resource is most likely doing this to

reduce its cultural distance from the other countries.

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

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

European aircraft maker Airbus invested $600 million in Mobile, Alabama, to build jetliners. Which of the following statements best explains why it used this strategy?

to take advantage of lower taxes in the southern United States

The German multimedia conglomerate Bertelsmann operates in more than 60 countries throughout the world and owns many regional leaders in their specific product categories, including Random House Publishing in the United States. Bertelsmann operates its more than 500 regional media divisions as more or less autonomous profit-and-loss centers, but it attempts to share best practices across units. Global learning and human resource strategies for executives are coordinated at the network level. Bertelsmann is following a(n)

transnational strategy.