MGMT 4842 Chapter 7 Connect

True or False: Cultural differences are a major source of the cross-country variations that affect buyer preferences

True

A company may find cross-border resource sharing or transfers of capabilities fail to translate into a competitive advantage because

a rival firm in a foreign-country market has superior resources and technology.

A transnational strategy can enable a company to do which of the following

leverage subsidiary skills and capabilities

One of the five primary strategic options a company can use to expand into a foreign market is to

maintain a domestic production base while exporting goods.

What is the term used to describe rivals competing against one another in many of the same markets?

multimarket competition

_____ _____, or the decision on the part of two companies to refrain from launching aggressive actions against each other, may occur when the companies compete against one another in multiple geographic markets.

mutual restraint

A weak domestic currency can result in a favorable exchange rate shift for domestic companies by

reducing the cost advantage for foreign companies.

What are examples of demand conditions

relative size of the market growth potential domestic buyers' needs and wants

What are reasons that companies expand into foreign markets

to achieve lower costs to gain access to low-cost production to gain access to new customers

What are elements of factor conditions for production

cost of labor availability of raw materials

An international strategy is a company's strategy for competing in two or more ______ simultaneously

countries

An internal startup or a(n) _____ venture is a subsidiary business that is established by setting up the entire operation from the ground up.

Greenfield

A company trying to gain advantages over domestic rivals by shifting production from a plant in one country to a plant in another to profit from exchange rate fluctuations is using cross-border

coordination

The strategic option of home-based production and export allows a company to do what?

minimize its direct investment in foreign countries limit its involvement in foreign markets

What do companies commonly risk losing when they develop joint ventures with companies in a foreign country?

their competitive advantage

A transnational strategy is a ______ approach.

think-global, act-local

_____-______ subsidization refers to supporting competitive offensives in one market with resources and profits diverted from operations in another market.

cross-market

A country's desirability as a low-cost manufacturing location can vary frequently depending on shifts in the country's

currency exchange rate.

Companies typically move into foreign markets to

exploit their core competencies.

Which of the following is a way by which a company can successfully compete in a developing country market as shown by Japan's Suzuki when it entered India?

Change the local market to match the company's core operations.

Building production facilities in which countries presents a competitive advantage because of low-wage labor

India China

A domestic company wishing to enter the international market may choose to license its products or services to a foreign company for which reason?

The company has no resources to enter a foreign market directly.

Natural-resource companies move into foreign markets to

access supplies of raw material more cost effectively.

Companies that implement a transnational strategy often employ mass-customization techniques designed to

accommodate local preferences in a semi-standardized way.

A global strategy is an appropriate choice in which situation?

buyer needs for a particular product or service are relatively the same in many countries

Creating a strategy for entering an international market can be more difficult than entering a domestic market because

buyer preferences in foreign markets force companies to customize their products.

Car manufacturers often employ a multidomestic approach and allow local managers to market the vehicles according to which of the following?

buyer tastes cultural preferences competitive conditions

Exporting goods may be a successful strategic option if the company

can maintain its cost competitiveness at home.

A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because

domestic manufacturing becomes less competitive with foreign plants.

By transferring company expertise to cross-border markets, a domestic company can successfully do what?

transform into a global company in its own right

A company that wishes to control all aspects of its operation when it expands into foreign markets should establish a

wholly owned subsidiary

Companies that practice cross-border coordination often gain which benefits?

-adaptation to tariff and quota changes -coordinated production schedules -better workload distribution

If it is impractical for a company to adapt to the situation in a developing-country market, the company should

avoid that market.

The biggest risk a company assumes with a licensing strategy is that

it will lose control over the use of its technological know-how.

If significant economies of scale exist, a company that concentrates on a limited number of locations can do which of the following?

(a) achieve major cost savings

if significant economies of scale exist, a company that concentrates on a limited number of locations can do which of the following?

(a) achieve major cost savings

Companies that implement a transnational strategy often employ mass-customization techniques designed to:

(b) accommodate local preferences in a semi-standardized way

An international strategy is a company's strategy for competing in two ore more ________ simultaneously

(b) countries

Spurring market growth in a domestic market can translate into an international competitive advantage owing to which of the following?

(b) increasing innovation and quality improvements

A strong domestic currency tends to

(b) weaken the cost competitiveness of domestic companies

True or false: Cultural differences are a major source of the cross-country variations that affect buyer preferences.

True

True or false: One way a domestic company can successfully compete against a global business giant is by exploiting shortcomings in the global company's local distribution networks.

True

If significant economies of scale exist, a company that concentrates on a limited number of locations can do what?

achieve major cost savings

Governments wishing to create a favorable business climate for foreign companies will typically

seek advice from business leaders.

The biggest risk a company assumes with a licensing strategy is:

(b) that it will lose control over the use of its technological know-how

Producing goods in domestic plants and exporting them is considered

(c) a conservative way to enter a foreign market

Companies typically move into foreign markets

(c) to exploit their core competencies

A global strategy is an appropriate choice in which of the following situations?

(d) buyer needs for a particular product or service are relatively the same in many countries

Which of the following is a way a company can successfully compete in a developing-country market, as shown by Japan's Suzuki when it entered India?

(d) change the local market to match the company's core operations

A company trying to gain advantages over domestic rivals by shifting production from a plant in one country to a plant in another to profit from exchange rate fluctuations, is using cross-border

(d) coordination

One strategy associated with limiting the number of locations is to open a customer service center in a specific country in order to

(d) cultivate close relationships with important clients

In terms of a country's business climate, a country's inflation rate and level of deficit spending are types of:

(d) economic risk

McDonald's, 7-Eleven, and Hilton Hotels have all entered the international market by using

(d) franchising strategies

Companies that employ a multidomestic strategy attempt to meet buyer needs by:

(d) offering different products and services in different countries

Mutual restraint exercised by international rivals competing in several countries

(d) stabilizes their respective postions

Which of the following do companies commonly risk losing, when they develop joint ventures w/companies in a foreign country?

(d) their competitive advantage

One of the five primary strategic options a company can use to expand into a foreign market is:

(d) to maintain a domestic production base while exporting goods

Building production facilities in which of the following countries presents a competitive advantage because of low-wage labor:

- China - India

What are reasons why domestic companies often have an advantage over global companies?

-Domestic companies are familiar with the local labor force. -Domestic companies are familiar with local culture and consumer needs.

A company that expands into a foreign market by pursuing the option of entering into a strategic alliance with a foreign partner can

-achieve cost savings. -share technological know-how. -share distribution facilities.

A domestic company can defend against expanding international companies through which methods?

-employing a rapid-growth strategy -pursuing mergers and acquisitions

A company's products may have little value in certain foreign-market locations because

-local brands may remain very popular no matter how well a competing brand is regarded internationally. -buyer preferences and lifestyles vary from country to country.

What can help a company compete successfully in developing-country markets?

-offering lower-priced, better products customizing its business model to suit local circumstances

A company that distributes its activities across multiple locations can seek which advantages?

-reducing the risks of fluctuating exchange rates -lowering distribution costs -providing customers with timely service and technical support

To leverage its capabilities and increase its competitive advantage, an international company can

-share a brand name or other valuable competitive asset with all its stores. -transfer technological know-how to its international operations.

Companies that focus on a certain locations can benefit from which of the following?

-superior resources -well-trained personnel -better activities coordination

Which factors make dispersing a company's activities competitively important?

-trade barriers to importing manufactured goods -major customers in areas without low-cost production -the threat of supply interruptions

True or false: Cross-market subsidization can be a powerful competitive weapon for companies operating in numerous markets.

True

One strategy associated with limiting the number of locations is to open a customer service center in a specific country in order to

cultivate close relationships with important clients.

To compete in an international market, a basic decision companies must make is whether to ______ to accommodate cross-country differences in buyer tastes and preferences.

customize products and services

In terms of a country's business climate, the instability or weakness of a national government is a type of

political risk.

The primary problem that franchisors face over foreign-market expansion is the lack of ______ control.

quality

Different country environments require companies to customize their approaches to which of the following

strategy management organization

One of the ways companies can compete profitably in a developing-country market is to

tailor the packaging and product quantity to local preferences.

To be successful, a think-global, act-global approach generally requires which of the following?

- a global brand name - centralized production and distribution

Focusing on a limited number of locations can increase a company's competitive advantage when

- a large learning curve is associated with a particular task - manufacturing costs are lower in a certain area

Which of the following are elements of factor conditions for production:

- availability of raw materials - cost of labor

Acquiring a foreign company as a means of entering a foreign market can allow a business to do which of the following:

- avoid the risks of a greenfield venture - build supplier relationships - gain access to local distribution channels

Companies that focus on a few locations can benefit from which of the following

- better activities coordination - well-trained personnel - superior resources

A company that employs a global strategy will do which of the following:

- build a global brand - create a strong headquarters to oversee its global activities - coordinate efforts across country boundaries - sell a standardized global product

A company that employs a global strategy will do which of the following?

- build a global brand - create a strong headquarters to oversee its global activities - sell a standardized global product - coordinate efforts across country boundaries

Which of the following represents the drawbacks of global strategies

- companies often experience higher transportation costs - companies have difficulty addressing local needs

The Transfer of which of the following can be inhibited by a multidomestic strategy?

- company technological know-how - company resources - company knowledge

The strategic option of acquiring a foreign partner gives a company expanding into foreign market the advantage of:

- familiarity with local government regulations - already established relationships with distributors - intimate knowledge of local buying habits and consumer preferences

A Company may find it easier to operate in one country than in others because of the country's

- favorable political conditions - advantages for specific value chain activities - strong economic conditions

A multi-domestic strategy give local managers the decision-making capability to do which of the following

- focus competitive efforts - address market needs

A company's export strategy may fall in which of the following situations:

- foreign countries impose tariffs on imports - domestic manufacturing costs are higher than those of foreign competitors - shipping costs are exorbitant

Which of the following are drawbacks of a multidomestic strategy?

- it can raise production and distribution costs - it won't help a company build a single international competitive advantage

which of the following are drawbacks of a transnational strategy?

- it is a difficult strategy to implement - it can create a costly and time-consuming operation - it involves pursuing conflicting goals

A global company can achieve market share in a national market by:

- launching marketing campaigns - drawing customers away from domestic rivals - cutting prices

Governments can discourage imports of specific items w/which of the following?

- making custom inspections burdensome - setting up import quotas - imposing a ban on importation

Differing country environments require companies to customize their approaches to which of the following:

- management - organization - strategy `

The strategic option of home-based production and export allows a company to do which of the following:

- minimize its direct investment in foreign countries - limit its involvement in foreign markets

Which of the following are policies that governments adopt to stimulate business investments:

- providing government-sponsored job training - offering low-cost business loans

A company that distributes its activities across multiple locations can seek which of the following advantages:

- providing its customers with timely service and technical supports - lowering distribution costs - reducing the risks of fluctuating exchange rates

For domestic manufacturers, positive aspects of a weak domestic currency include:

- reduced domestic demand for foreign-made goods - lower prices for domestic products

Which of the following are examples of demand conditions:

- relative size of the market - growth potential - domestic buyers' needs and wants

Sharing resources with its international operations allows a company to

- spread the development costs over a larger volume of unit sale - reduce the cost of creating them at each location

Which of the following about greenfield ventures are true?

- they are subject to a high level of risk - they are costly - they require many company resources

Which of the following are reasons that companies expand into foreign markets?

- to achieve lower costs - to gain access to low-cost production - to gain access to new customers

Elements of a country's infrastructure that can contribute to factor conditions include:

- transportation - communication - banking systems

Currency exchange rates can pose a risk for businesses because they:

- vary unpredictably - affect a company's profit - can change by more than 20 % a year

Focusing on a limited number of locations can increase a company's competitive advantage when:

- when a large learning curve is associated with a particular task - manufacturing costs are lower in a certain area

Which of the following are ways by which governments can discourage the import of specific items? (Check all that apply.)

-Enacting burdensome procedures and requirements regarding customs inspection for foreign goods -Setting up import quotas -Imposing a ban on importation

Which of the following are drawbacks of a transnational strategy?

-It can create a costly and time-consuming operation. -It is a difficult strategy to implement. -It involves pursuing conflicting goals.

What are drawbacks of a multidomestic strategy?

-It can raise production and distribution costs. -It won't help a company build a single international competitive advantage.

Which of the following are policies that governments adopt to stimulate business investment? (Check all that apply.)

-Offering low-cost business loans -Providing government-sponsored job training

Select all that apply Which of the following can be inhibited by a multidomestic strategy? (Check all that apply.)

-The transfer of company technological know-how -The transfer of company knowledge -The transfer of company resources

In which of the following situations a company's export strategy may fail? (Check all that apply.)

-When domestic manufacturing costs are higher than those of foreign competitors -When shipping costs are exorbitant -When foreign countries impose tariffs on imports

A think-local, act-local strategy gives local managers the decision-making capability to do which of the following?

-address market needs -focus competitive efforts

Currency exchange rates can pose a risk for businesses because they

-affect a company's profit. -can change by more than 20% a year. -vary unpredictability.

Acquiring a foreign company as a means of entering a foreign market can allow a business to do which of the following?

-build supplier relationships -avoid the risks of a greenfield venture -gain access to local distribution channels

A company seeking to establish a subsidiary in a foreign country may choose to establish a greenfield venture if an internal startup

-can gain good distribution access. -costs less than an acquisition. -can successfully compete with local rivals.

The strategic option of acquiring a foreign partner gives a company expanding into a foreign market the advantage of

-intimate knowledge of local buying habits and consumer preferences. -already-established relationships with distributors. -familiarity with local government regulations.

What are among the five primary strategic options for a company wishing to enter international markets?

-licensing foreign firms to produce and distribute the company's products abroad -relying on joint ventures with foreign companies -establishing a subsidiary in a foreign market

Countries with which characteristics present advantages for becoming principal production sites

-lower labor costs -close proximity to suppliers -relaxed government regulations

To discourage foreign companies from locating manufacturing facilities in a country, the country's government can do which of the following

-make a new facility's compliance with local environmental regulations very costly -provide government financial assistance to domestic companies -require partial ownership of the facilities by local companies or investors

Which two issues do companies commonly encounter when undergoing international expansion?

-the cost-effectiveness of providing a standardized product globally -the demand to customize products to suit local preferences

True or False: Strategic alliances are more frequently used by firms from North American than from Asia or Latin America

False

True or false: Strategic alliances are more frequently used by firms from North America than from Asia or Latin America.

False

Joint ventures are likely to fail when what occurs?

a local partner's expertise is less valuable than expected

Companies are often motivated to enter foreign markets to

take advantage of new resources and capabilities.

A joint venture can hamper a company's goals for global market leadership by fostering

too much dependence on a foreign partner.