MGMT 4390 Chapter #8: Quiz

Japan, due to a lack of undeveloped land, would be an unusual choice of location for a U.S. cattle company to set up local grazing operations. This limiting factor would be identified in what part of Porter's determinants of national advantage?

Factors of production

__________ is the set of costs associated with various issues firms face when entering foreign markets, including unfamiliar operating environments; economic, administrative, and cultural differences; and the challenges of coordination over distances.

Liability of foreignness

Which of the following is NOT an incentive for firms to become multinational?

To avoid high domestic taxation on corporate income

A U.S. manufacturer of adaptive devices for persons with disabilities is considering expanding internationally. It is a fairly small company, but it is looking for growth opportunities. This company should primarily consider the option of:

a greenfield venture.

Firms with core competencies that can be exploited across international markets are able to:

b. achieve synergies and produce high-quality goods at lower costs.

Moving into international markets is a particularly attractive strategy to firms whose domestic markets:

demand a differentiation strategy for success.

U.S. cola companies entered the global market because of:

economies of scale that offset research and development costs.

A multidomestic strategy is an international strategy in which a firm's home office determines the strategies that business units are to use in each country or region.

false

The benefits of expanding into international markets include all of the following opportunities EXCEPT:

favorable tax concessions and economic incentives by home-country governments.

A global strategy:

lacks responsiveness to local markets.

Disney suffered lawsuits in France, at Disneyland Paris, because of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of the:

liability of foreignness.

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are __________ and __________.

liability of foreignness; regionalization

A multidomestic corporate-level strategy is one in which:

the firm customizes the product for each country in which it competes.

In China, Starbucks is standardizing its operations while simultaneously decentralizing some decision-making responsibility to local levels to meet customers' tastes. Starbucks is following the __________ international corporate-level strategy.

transnational

A transnational strategy is difficult to use because of its conflicting goals.

true

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry that provides the leather needed to construct shoes and related products.

true

The greenfield venture option is useful when control of proprietary technology is important in an international expansion.

true