Chapter 2 Quiz

Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive advantage through product differentiation/innovation.

TRUE

Experience differentiation is an extension of product differentiation, accomplished by using people's five senses to create an experience rather than simply providing a service.

TRUE

Key success factors are those activities that are key to achieving competitive advantage.

TRUE

One reason for global operations is to gain improvements in the supply chain.

TRUE

Outsourcing is the practice of transferring a firm's activities that have traditionally been internal to external suppliers.

TRUE

Production processes are being dispersed to take advantage of national differences in labor costs.

TRUE

The World Trade Organization has helped to significantly reduce tariffs around the world.

TRUE

The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct.

TRUE

SWOT analysis is a method of determining external strengths and weaknesses and internal opportunities and threats.

FALSE

Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.

FALSE

Outsourcing is simply an extension of the long-standing practice of: A) subcontracting. B) importing. C) exporting. D) postponement. E) e-procurement.

A) subcontracting.

Which of the following is true of maquiladoras? A) They discourage foreign businesses from outsourcing. B) They assess tariffs only on the value-added work done. C) They originated in China. D) None of the above E) All of the above

B) They assess tariffs only on the value-added work done.

Which of the following does NOT represent a valid reason for globalizing operations? A) reduce costs B) improve the supply chain C) reduce responsiveness D) attract and retain global talent E) understand markets

C) reduce responsiveness

What theory implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can? A) theory of competitive advantage B) theory of core competencies C) theory of comparative advantage D) theory of outsourcing E) theory of offshoring

C) theory of comparative advantage

What is the practice of transferring a firm's activities that have traditionally been internal to external suppliers? A) nearshoring B) farshoring C) offshoring D) outsourcing E) backsourcing

D) outsourcing

Which of the following is not an advantage of outsourcing? A) cost savings B) gaining outside expertise C) improving operations and service D) outsourcing core competencies E) accessing outside technology

D) outsourcing core competencies

The purpose of NAFTA is to: A) substitute cheap labor in Mexico for expensive labor in the United States. B) curb illegal immigration from Mexico to the United States. C) phase out all trade and tariff barriers between North America and South America. D) phase out all trade and tariff barriers between the United States, Canada, and Mexico. E) provide fair and equitable tariff rates for trade between the United States, Canada, and Mexico.

D) phase out all trade and tariff barriers between the United States, Canada, and Mexico.

Which of the following represents a reason for globalizing operations? A) to improve the supply chain B) to improve operations C) to expand a product's life cycle D) to attract and retain global talent E) all of the above

E) all of the above

An organization's strategy is the purpose or rationale for its existence.

FALSE

Core competencies are good candidates for outsourcing.

FALSE

Key success factors and core competencies are synonyms.

FALSE

Low-cost leadership is the ability to distinguish the offerings of the organization in a way that the customer perceives as adding value.

FALSE

NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

FALSE