International Business Chapter 13

The different value creation activities found in a firm are called _____.

- operations

Jason is a member of the company's product development team. He is involved with a(n) _____ activity.

- primary

What are the two types of activities found within a company's operations?

- primary - support

The manufacturing of garden equipment is an example of which primary activity?

- production

Some believe that local customization is declining in importance. What two reasons are cited as the reason for this decline?

- improved transportation methods - the advent of communication technology

Sasha receives a bi-weekly inventory report that shows her how many catalogs are in the warehouse. The report is generated automatically by the system that tracks all warehouse items. Sasha's report is an example of a(n) _____ system.

- information

What name is given to the electronic systems that manage inventory, price products, track sales, and handle customer inquiries?

- information

When Xerox first introduced the photocopier, it was able to implement an international strategy because _______.

- it did not have any competition

Lenovo's ThinkPad laptop computer illustrates the concept of the global web because _____.

- it is designed in the US, components are made in a variety of countries, the unit is manufactured in China

Charlotte told the new employees on the clothing assembly line that their ability to produce a final product would increase as they learned the most efficient way to sew the dresses. Charlotte is describing a ____ effect.

- leaning

_____ refer to cost savings that are the result of learning by performing a task.

- learning effects

The two components of the experience curve are _____. Choose those that apply.

- learning effects - economies of scale

McDonald's local franchises in France have begun to offer more elegant seating areas and an upscale menu. This was done in response to slow growth rates in the area. Impressed with the increased sales at these stores, McDonald's executives are considering making these changes elsewhere. In this instance, what aspect of creating value is demonstrated?

- leveraging subsidiary skills

Marta's company wants to sell coffee products in Mexico but in order to do so they need to adjust their products to reflect the desires of customers in Mexico. In other words, her company feels the pressure of _____.

- local responsiveness

Natalie works for a division of Motorola that produces consumer electronic items. It is her job to source production of these items both in the US and Europe to meet different electrical standards. This demonstrates how technology is providing a means for _____.

- local responsiveness

A firm should follow the transnational strategy when it is faced with which two pressures?

- local responsiveness - cost reductions

Lillian's company makes chocolate candy bars. They make one type of candy for the US market and make another type of candy that isn't quite as sweet for the European market because consumers there prefer that. What type of strategy does Lillian's company use to sell its products?

- localization

What strategy increases the value of a product in the local market through customization for different national tastes and preferences?

- localization

Firms face competitive pressures when they venture into the global marketplace. Companies face pressure for cost reductions and to be _____.

- locally responsive

Trina's company has moved all sewing and piece-work capabilities to a plant in Thailand in order to reduce costs. Her company is taking advantage of a(n) _____ economy.

- location

The production activity of a firm can create value by working to _____.

- lower costs

What are the two ways a firm can create more value for its products?

- make product more attractive to customer - lower production costs

Identify three components of a business that make up its operations.

- marketing - human resources - research and development

Primary activities of the value chain can be categorized into four functions; identify these four functions.

- marketing sales - production - customer service - R&D

When customer preferences differ significantly between countries, there is _________ (less or more?) pressure for local responsiveness.

- more

Which primary activity takes place when telephone components are put together on an assembly line?

- production

If Trevor wants his company to create more value, he should look for ways to make a product that is higher in __________ (quality/price).

- quality

Companies typically face two types of competitive pressures when entering global markets. What are these two pressures?

- reduce costs - be locally responsive

After many months of analysis and study, the insurance company introduced a new disability product that would allow consumers of all income brackets an affordable insurance choice. Which primary activity did this company rely on to create this product?

- research and development

The design of products and production processes is included in the primary activity known as _____.

- research and development

Core competencies are typically expressed in ________ that other firms are unable to duplicate.

- skills within a firm

A company's _____ is defined as the actions that managers take to attain the goals of the company.

- strategy

Mia's goal for the company this year is to sell its product line internationally. She feels this will increase profits within the next three years by as much as 30%. Heather is developing a ____ for the company.

- strategy

Which type of activities must be in place in order for primary activities to occur in the value chain?

- support

Companies which produce wireless headsets must take into consideration that standards in Europe are based on GSM (Global System for Mobile Communications) while in the US standards are based on CDMA (Code Division Multiple Access). These standards demonstrate how _____ can be a source for local responsiveness.

- technology

Production and marketing responsibilities are typically delegated to _____ when customer preferences create a strong pressure for local responsiveness.

- the firm's foreign subsidiary

A business should follow the ____ strategy when it experiences pressures for cost reduction AND local responsiveness.

- transnational

What are the four main strategic postures that firms can use when competing globally?

- transnational strategy - international strategy - localization strategy - global standardization strategy

Consumers through-out the world have the same use for sugar -- it is used as a sweetener in every country. Sugar is an example of a(n) ____ need.

- universal

Bryan's company wanted to gain a greater market share on its bicycle products so it built in greater functionality to the bikes and created an after-service customer call center. Which aspect of value creation is Bryan's company concerned with?

- value

The marketing department survey showed that many customers preferred a smaller container for the company's line of iced coffee products. The R&D department immediately began work on a new container. These departments worked together to increase the _____ of the product.

- value

Daniel's company adopted an international strategy when it introduced the single-cup coffeemaker. However, just nine months later, his company regretted the decision because four other companies came up with a similar product and began selling it at a lower cost and with additional features. What is the main reason Daniel's company's international strategy failed?

-competitors

Which three sales and marketing functions can help a firm create value?

- Brand positioning - Consumer assessments - Advertising

Which country would be most likely to form a regional convergence with the United States?

- Canada

Which three of these employees are involved with a primary activity at their company?

- Carol is a customer service representative. - John is responsible for all marketing activities. - Michael assembles automobiles at the plant.

Choose three factors that pressure a firm to respond locally when they enter the global marketplace.

- Differences in consumer tastes - Host-government demands - Accepted business practices

The most obvious example of the push for local responsiveness based on a region is the _____.

- EU

What are three ways a company can increase its profitability and rate of profit growth by expanding internationally?

- Source activities where they are performed most efficiently - Sell products to the international market - Realize greater cost economies

McDonald's is increasingly finding that its foreign franchisees are a source of valuable new ideas. Which aspect of creating value is McDonald's taking advantage of in this instance?

- Subsidiary skills

Garrett knows that without the efficiency of the tracking software system, none of his products could get to the customer on time. This software system is an example of a _____ activity.

- Support

Universal needs exist with which two of these products? Choose all that apply.

- bulk chemicals, petroleum and steel - personal computers and hand-held calculators

What is the ultimate reason international strategies eventually fail?

- competition

Many chain restaurants look to McDonald's as the leader in management of fast-food operations. This status demonstrates McDonald's _____________ competence.

- core

A global standardization strategy aims to increase profits by implementing _____.

- cost reductions

Meghan's job involves responding to emails from clients who have product questions and complaints. Which primary activity function is Meghan involved in?

- customer service

What are two types of primary activities found in many businesses?

- customer service - production

A business should follow an international strategy when it finds itself in which two situations?

- does not face cost pressures - does not face pressures to customize a product based on local preference

If a firm realizes reductions in per unit cost achieved through large production runs, it is experiencing _______.

- economies of scale

Maria thought the company could bring down the cost per item of the shoes if they increased the production run to 5,000 units. Maria is basing her thought on _____.

- economies of scale

A product's production costs tend to decline over time. This is referred to as the ________ curve.

- experience

After analyzing the profit projections for next year, Lisa reminded the group that production costs would continue to decline on those products that had been in production for five years. What concept was Lisa referring to?

- experience curve

True or false: A company would typically experience a decrease in profit growth if it should decide to disperse value creation activities to different locations as a way to perform those activities more efficiently.

- false

True or false: A lack of homogeneity in the global marketplace is evident in the worldwide acceptance of McDonald's hamburgers.

- false

True or false: Location economies refer to the distribution point of a company's products.

- false

When competing globally firms have ____ major strategic stances that they can adopt.

- four

When a firm adopts a low-cost strategy on a global scale that comes from economies of scale, learning effects, and location economies it is using a ______ strategy.

- global standardization

What is the term for assigning different stages of the value chain throughout the world where perceived value is maximized?

- global web