International business FINAL
The norms and value systems of an organization constitutes its
Corporate culture
Which of the following factors limits a firm's ability to use the same marketing message
Cultural differences
A firms failure to understand host country cultural differences that require different approaches to marketing and management is referred to as
Cultural myopia
Megan, a U.S citizen, is the operations manager at the Middle East office of HS Constructions Inc., an American firm. In this situation, she is an example of an
Expatriate manager
Licensing is NOT attractive to which of the following firms
Firms requiring tight control of operations for realizing experience curve and location economies
Which of the following modes of entry into foreign markets can result in a lack of control over quality
Franchising
Which of the following modes of entry is suitable for service firms where the risk of loosing control over the management skills or technological know how is not much of a concern and where the firms valuable asset is their brand name
Franchising
Which of the following is a factor that has contributed to greater retail concentration in developed countries
An increase in car ownership
If a firm is unable to keep its national markets separate, individuals or business may undercut its attempt at price discrimination by engaging in
Arbitrage
Which of the following is a disadvantage of a large scale entry into a foreign market
Availability of fewer resources to support expansion in other desirable markets
Which of the following is an advantage of longer distribution channels
Greater market access
Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets
High costs and risks
Which of the following postulates that top managers typically overestimate their ability to create value from an acquisition
Hubris hypothesis
From a strategic perspective, the key issue in international labor relations is
The degree to which organized labor can limit the choices of an international business
Which of the following is a disadvantage of small scale entry for an international firm considering foreign expansion
The difficulty of building market share and capturing first mover advantages
Which of the following factor helps a firm shorten channel length
The entry of large discount superstores
Which of the following is necessary for a firm to ensure profitable price discrimination
The firm must be able to keep its national markets separate
In terms of expatriate pay, what do firms typically do when a reciprocal tax treaty is not in force
The firm pays the expatriate's income tax to the host country government
A principal concern of domestic unions about multinational firms is that a company can counter it bargaining power with
The power to move production to another country
Spring, an American firm, recently acquired another company, Tavel Inc., in Indonesia. The high level managers at Tavel quit because they could not cope with the domineering and straightforward approach of their American counterparts. This illustrates how acquisitions may fail because
There is a clash between the cultures of the acquired and the acquiring firm
Which of the following is an advantage of acquisitions as a means of entering foreign markets
They are quick to execute and help firms to rapidly build their presence in the target foreign market
In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational
Turnkey project
The members of a cross functional team should have
The ability to contribute functional expertise
Which of the following factors creates a potential market for new products
Affluent consumers
An expatriate manager refers to
A citizen of one country who is working abroad in one of the firm's subsidiaries
Which of the following is an advantage of choosing exporting as a mode of entry into foreign markets?
A firm can avoid the cost of establishing manufacturing operations in the host country
Which of the following is a risk of entering developing nations like India and China on a large scale
Absence of prior foreign entrants
The risks associated with learning to do business in a new culture are less if the firm:
Acquires an established host-country enterprise
Which of the following is an argument against standardized advertising
Advertising regulations may block implementation of standardized advertising
Which of the following is the most common approach to expatriate pay, which equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home
Balance sheet approach
The long term goal for organized labor to establish international trade secretariats was to
Be able to bargain transnationally with multinational firms
Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for companies based in developing nations
Benchmark one's operations and performance against foreign multinationals
Which of the following is an example of an industry in which cross licensing agreements are increasingly becoming common
Biotechnology
How can a wholly owned subsidiary be established in a foreign market
By acquiring an established firm in the host nation
According to Christopher Bartlett and Sumatra Ghoshal, how can local companies differentiate themselves from foreign multinationals
By focusing on market niches
How can firms avoid incurring high transport costs when exporting bulk products
By manufacturing bulk products regionally
Other things being equal, the rate of new product development seems to be greater in countries where
Competition between firms is intense
Which of the following factors constrains a firm's ability to sell a standardized product to a global market using a standardized marketing strategy
Differences in product and technical standards
Which of the following factors constrains the globalization of markets
Differences in technical standards
In the context of strategic pricing, which of the following takes places whenever a firm sells a product for a price that is less than the cost of producing it
Dumping
What kind of demand is seen when a small change in price produces a large change in demand
Elastic
The liability associated with foreign expansion is greater for foreign firms that
Enter a national market early
The probability of survival for an international business increases if it:
Enters a national market after several other foreign fims have already done so
According to Mendenhall and Oddou, what is the major problem in the selection of appropriate candidates for overseas assignments in many firms
Equating domestic performance with overseas performance potential
Which of the following staffing policies is followed by firms that can reduce the issue of compensation to that of how much home country expatriates should be paid
Ethnocentric
Organized labor responds to the increased bargaining power of multinational corporations by trying to
Impose regulations on multinationals through organizations such as GATT
If a firm favors a push strategy, using direct selling to educate potential consumers about the features of its products, what kind of products would it most likely sell
Industrial products
What kind of demand is seen whenever a large change in price produces only a small change in demand
Inelastic
Which of the following is a reason why firms often overpay for the assets of an acquired firm
Interest of more than one party in acquiring a particular firm
Small scale entry into foreign markets make it difficult to build market share because it
Is associated with a lack of commitment demonstrated by the foreign firm
In international business, a product that is not widely available in a foreign market and satisfies an unmet need
Is likely to have a greater value
Why do firms pursuing global standardization or transnational strategies tend to prefer establishing wholly owned subsidiaries?
It allows firms to use the profits generated in one market to improve its competitive position in another market
In the terms of expatriate pay, which of the following is a characteristics of a foreign service premium
It compensates expatriates for having to live in an unfamiliar country
Which of the following is true of price discrimination
It involves charging whatever the market will bear
Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets
It is a useful strategy to earn great returns from the know how of a technologically complex process
Which of the following is a disadvantage of franchising
It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser
In terms of expatriate pay, which of the following is true of a foreign service premium
It is paid as a percentage of base salary, with 16 percent being the average premium
In the context of international labor relations, which of the following is true of organized labor
It limits a firms ability to integrate and consolidate its global operations
Which of the following is an important attribute for a product development team to function effectively and meet all of its development milestones
It should be led by a "heavy weight" project manager who has high status within the organization
Axiom international, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different . The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also would be politically acceptable. Which of the following modes of entry intro foreign markets is most suitable for Axiom International
Joint venture
Which of the following is a drawback of licensing as a mode of entry into foreign markets
Licensing does not give a firm tight control over manufacturing, marketing, and strategy
Which of the following refers to choices about product attributes, distribution strategy, communication strategy, and pricing strategy that a firm offers its targeted markets
Marketing mix
Which of the following is true of Theodore Levitt's arguments concerning the globalization of world markets
Modern transportation is facilitating a convergence of tastes and preferences among consumers in advanced countries of the world
Which of the following refers to the fact that a firms pricing strategy in one market may have an impact on its rivals pricing strategy in another market
Multipoint pricing
Which of the following factors determines the value that an international business can create in a foreign market
Nature and indigenous competition
In terms of communication strategy, in highly developed countries such as the United States
Noise is extremely high
Which of the following exists whenever consumers in different countries are charged different prices for the same product
Predatory pricing
Which of the following marketing strategies relies on access to advertising media
Pull strategy
Which of the following is a reason why a relatively poor country may be an attractive target for inward investment
Rapid economic growth
Why should a high tech firm avoid selecting licensing as a mode of entry
Risk of loosing control over technology
According to Mendenhall and Oddou, which of the following dimensions that predicts success in a foreign market posting stregthens an expatriates self esteem, self confidence, and mental well being
Self orientation
According to Mendenhall and Oddou, which of the following is a dimension that predicts and allows expatriates to adapt their interests in food, sport, and music
Self orientation
Franchising as a mode of entry into foreign markets is employed primarily by
Service firms
Which of the following types of entry into a foreign market allows a firm to learn about the foreign market while limiting the firm's exposure to that market
Small scale entry
When are the effects damaging for an international business
When potential consumers in a target country have a bias against foreign firms
In which of the following situations can an international business command higher prices for a particular product in a foreign market
When the product offers greater value to customers in the foreign market
Which of the following entry modes into a foreign market best serves a high tech firm
Wholly owned subsidiaries
Jupiter Systems is a high tech firm looking to set up operations in a foreign country. The firm's core competency is in technological know how. Which of the following modes of entry would be most favorable to the firm if it wants to keep a tight control over its technology
Wholly owned subsidiary
What triggers the conflict of interest over strategy and goals in joint ventures?
shifts in relative bargaining power of venture partners