Ch.7 Strategic Management

Which one of the following is not a factor that a company must contend with in competing in the markets of foreign countries?

A need to convince shippers to keep transportation costs low

Which of the following is not a potential motivation for entering into strategic alliances or other cooperative arrangements with foreign companies?

Better enable the use of a "think global, act global" strategy and facilitate cross-market subsidization

Which of the following statements about entering developing markets such as China, India, Russia, and Brazil is correct?

Building a market for the company's products can often turn into a long-term process that involves reeducation of consumers.

Which one of the following statements concerning the impact of fluctuating exchange rates on companies competing in foreign markets is not true?

If the exchange rate of U.S. dollars for euros changes from $1.15 per euro to $1.25 per euro, then it is correct to say that the U.S. dollar has grown weaker.

Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of developing country markets?

Try to change the local market to better match the way the company does business elsewhere.

The advantages of manufacturing goods in a particular country and exporting them to foreign markets

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

The multidomestic strategy of "think local, act local"

becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.

Using domestic plants as a production base for exporting goods to selected foreign country markets

can be an excellent initial strategy to pursue international sales.

In order to use location to build competitive advantage when competing on domestic and international level, a company must

consider whether to concentrate each activity it performs in a few select countries or disperse the performance of the activity to many nations, and determine in which countries it should locate particular activities.

Which of the following is the biggest strategic issue when competing in the markets of foreign countries?

determining whether to standardize or customize the company's offerings.

A "think local, act local" multidomestic type of strategy

employs essentially the same basic competitive strategy theme in all country markets.

The primary reasons that companies opt to expand into foreign markets are to

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.

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchiser to expend only the resources to recruit, train, and support foreign franchisees.

The chief difference between a "think global, act global" and a "think global, act local" approach to crafting a global strategy is that

local managers are given more latitude in adapting the global strategy approach as may be needed to accommodate local buyer preferences and be responsive to local market and competitive conditions.

A "think global, act global" approach to strategy making is preferable to a "think local, act local" approach when

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

Which of the following is not an advantage of utilizing a licensing strategy to participate in foreign markets?

the ability to safeguard the company's technical know-how or patents

Multinational competitors tend to concentrate activities in a limited number of locations when

there are significant scale economies and/or steep learning curve effects associated with performing certain activities in a single location, costs of performing the activity are lower in particular geographic locations, and certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages.

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous

two answers are correct when high transportation costs make it expensive to operate from central locations and whenever buyer-related activities are best performed in locations close to buyers.

Companies tend to concentrate their activities in a limited number of locations

when there is a steep learning curve associated with performing an activity.

One of the biggest strategic challenges to competing in the international arena is

whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the tastes and preferences of local buyers.