4490 Chapter 10

Which of the following best defines national competitive advantage?

It is the extent to which a country can compete in international markets.

National culture, according to Geert Hofstede, can be defined as different groups' distinctive ______.

"programming of the mind"

For a U.S. company doing business internationally, which of the following would be examples of local responsiveness? (Check all that apply.) Ford selling the same car models in the United States and Mozambique Walmart selling live animals for food preparation in China McDonald's selling teriyaki burgers in Japan Ikea selling metal chopsticks in South Korea

Walmart selling live animals for food preparation in China McDonald's selling teriyaki burgers in Japan Ikea selling metal chopsticks in South Korea

Which of the following are benefits of a transnational strategy? (Check all that apply.) It harnesses economies of scale. It minimizes local adaptations. It provides a standardization of all products and services. It promotes global learning and the diffusion of best practices and innovations.

It harnesses economies of scale. It promotes global learning and the diffusion of best practices and innovations.

Multinational enterprises need an effective global strategy in order to ______.

achieve a competitive advantage against other companies

When looking at the modes of foreign-market entry, one could conclude that ______.

exporting might be the earliest stage of commitment because it allows the firm to test whether a foreign market is ready for its products

Which of the following are common reasons for companies to make foreign direct investments? (Check all that apply.) to avoid import restrictions to reduce tax burdens to reduce labor costs to use incentives from the company's home country to expand abroad

to avoid import restrictions to reduce tax burdens to reduce labor costs

Calculating cultural distance involves comparing the cultures of which of the following? (Check all that apply.) a firm's home country a targeted host country a firm's employees a firm's managers and executives

a firm's home country a targeted host country

Multinational enterprises that manufacture commodity products that focus on cost leadership tend to use a(n) ______ strategy.

global-standardization

As MNEs compete internationally, a focus on local responsiveness allows them to do which of the following?

tailor product offerings to fit local preferences and requirements

Which country experienced rapid economic growth in the early 21st century and now challenges the United States for global economic supremacy?

China

Which country has become a hub for MNEs seeking to outsource business processes such as IT and customer service due to an abundance of highly educated but low-cost labor?

India

Which of the following statements about pursuing international expansion is true?

It can enhance a firm's competitive advantage.

Though many benefits exist, which of the following are among the drawbacks of a transnational strategy? (Check all that apply.) Managers become bored with focusing on only a single culture. It fails to take advantage of economies of scale and location. It requires implementing a complex organizational structure. It's difficult to implement.

It requires implementing a complex organizational structure. It's difficult to implement.

A multidomestic strategy is appropriate when which of the following conditions exist? (Check all that apply.) Markets in the host country strongly resemble those of the home country. Markets in the host country are idiosyncratic. The firm feels little need to reduce costs. The firm faces high demand for local responsiveness.

Markets in the host country are idiosyncratic. The firm feels little need to reduce costs. The firm faces high demand for local responsiveness.

Which of the following statements regarding factor conditions in Porter's diamond framework is true?

Natural resources are not necessarily needed to generate world-leading companies.

Spex is a leading manufacturer of eyeglasses. Spex is based in the United States but opens a facility in a Japanese city known for cutting-edge eyeglass innovations. Spex is counting on which of the following?

benefiting from location economies

MNEs pursuing a __________ ocean strategy tend to also pursue a transnational strategy.

blue

Which of the following pressures opposes local responsiveness on the integration-responsiveness framework?

cost reductions

The cultural disparity between the internationally expanding firm's home country and its targeted host country is known as ______.

cultural distance

Which of the following dimensions are considered in the CAGE distance framework? (Check all that apply.) cultural distance geographic distance architectural distance economic distance

cultural distance geographic distance economic distance

The specific characteristics of needs in a firm's domestic market, such as customers who hold companies to a high standard of value creation and cost containment, are also called ______.

demand conditions

The oldest form of internationalization is ______, which involves producing goods in one country to sell in another country.

exporting

The benefits of competing on a global scale exist ______.

for an increasing number of firms

Since expanding internationally, IKEA has shifted focus, concentrating on effectively managing a global supply chain in order to achieve economies of scale. This is reflective of a(n) ______ strategy.

global-standardization

The process of closer integration and exchange between different countries and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs, is known as ______.

globalization

During globalization 1.0 all important business functions were located in the home country, whereas during globalization 2.0 multinationals began to copy themselves _______.

in a few key countries

Companies seek to access international markets as a means of ______.

increasing their economic value creation

IKEA offers the same products in every market. This indicates that IKEA has followed a(n) ______ strategy.

international

Mount Mountain is a manufacturer of outdoor gear and apparel. It uses American sizing and standards for its apparel and gear across all markets. Which strategy is Mount Mountain adhering to?

international

Which of the following factors enabled India to gain a competitive advantage in business process outsourcing? (Check all that apply.) its high levels of domestic consumer demand its high levels of military spending its low-cost labor its well-educated, English-speaking workforce

its low-cost labor its well-educated, English-speaking workforce

MNEs pursuing a multidomestic strategy hope that ______.

local consumers will perceive them to be a domestic company

The benefits to be accrued from locating value chain activities in the world's optimal geographies for a specific activity are known as _______ economies.

location or locations

Rising wages and other costs are likely to negate any benefits MNEs have of access to ______.

low-cost inputs

In ______ societies, competitiveness, assertiveness, and the exercise of power are considered ideal.

masculine

The integration-responsiveness framework suggests that companies facing high pressure for local responsiveness and low pressure for cost reduction should follow a(n) ______ strategy.

multidomestic

A company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries is a ______.

multinational enterprise

The Finnish company Nokia was an early industry leader in cell phones. This is an example of ______.

national competitive advantage

When pursuing an international strategy, a company ______.

sells the same product in both domestic and foreign markets

Which of the following were black swan events that occurred in the early 21st century and helped reshape the global economy? the Global financial crisis the European refugee crisis the end of World War II the European debt crisis

the Global financial crisis the European refugee crisis the European debt crisis

Which of the following are among the primary considerations when determining the mode in which a firm enters a foreign market? (Check all that apply.) the intensity of competition in the home market the size of the foreign market the degree of investment the desired level of control over foreign operations

the degree of investment the desired level of control over foreign operations

All other things equal, the greater the cultural distance, ______.

the greater the liability of foreignness

The integration-responsiveness framework suggests that companies facing high pressure for both local responsiveness and cost reduction should follow a(n) ______ strategy.

transnational

Which of the following helped motivate globalization after the end of World War II? (Check all that apply.) unfilled needs during the war years the increased supply of labor in domestic markets the need to reconstruct economies damaged by war investment fatigue among major participants in the war

unfilled needs during the war years the need to reconstruct economies damaged by war

Foreign direct investments are investments in ______.

value chain activities abroad

What are the factors in Michael Porter's model of national competitiveness? (Check all that apply.) Related industries/complementors Public utilities Factors conditions Competitive intensity in a focal industry Demand conditions Governmental regulations

Related industries/complementors Factors conditions Competitive intensity in a focal industry Demand conditions

During the first stage of globalization, business functions that took place abroad were limited to which of the following? (Check all that apply.) sales strategic management research distribution

sales distribution

A country's natural, human, and other resources can be expressed in terms of ______.

factor conditions

The decision framework that is based on the relative distance between home and a foreign target country is the ______.

CAGE distance framework

When firms from wealthy countries trade with firms from poor countries, they benefit from economic _______.

arbitrage

At a basic level, the concept of "liability of foreignness" refers to the additional ______.

cost of doing business in an unfamiliar cultural and economic environment

Porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and ______.

factor conditions

Which of the following factors helped make Germany, which was a tough environment for a car company, conducive to successful car companies? fierce domestic competition demanding customers low domestic gas prices no-speed-limit autobahn

fierce domestic competition demanding customers no-speed-limit autobahn

Before World War II, business strategy, implementation, and knowledge typically flowed ______.

from domestic headquarters to outposts abroad

A company's ______ is the part of a corporate strategy that addresses how to gain and sustain a competitive advantage when competing against other foreign and domestic companies around the world.

global strategy

In order for a company to be considered a multinational enterprise, it must operate ______.

in more than one country

As the standard of living rises in emerging economies, MNEs are hoping that ______.

increased purchasing power will enable workers to purchase the products previously made only for export

Due to globalization, the world's market economies are becoming more ______.

integrated and interdependent

Benicio's Burritos is a leader in the Mexican fast-food category in the United States. It decides to expand internationally, starting in Japan. Benicio's Burritos fails within a year, learning later that Mexican food is uncommon in Japan and that the flavor profiles are not compatible with Japanese palates. The failure of Benicio's Burritos can be attributed to which of the following?

liability of foreignness

Despite a growing belief in the death-of-distance hypothesis, there remains evidence that certain countries remain leaders in specific industries and maintain a kind of ______ advantage.

national competitive

If the economic value creation of international expansion is negative, a firm should ______.

not expand internationally

When companies face a highly competitive environment at home, they are more likely to ______.

outperform global competition that lacks such intense domestic competition

When a country's demand conditions include high-density urban living and high energy costs, consumers can be expected to prefer air conditioners that are which of the following? (Check all that apply.) small operable in remote environments energy-efficient quiet

small energy-efficient quiet

Which of the following are part of culture? social mores national boundaries social norms beliefs

social mores social norms beliefs

A multinational enterprise would likely be motivated to pursue a global-standardization strategy in order to ______. (Check all that apply.) take advantage of location economies be locally responsive take advantage of economies of scale increase product differentiation

take advantage of location economies take advantage of economies of scale

Which of the following risks do companies face when expanding internationally? (Check all that apply.) the liability of foreignness loss of reputation disruptive innovation loss of intellectual property

the liability of foreignness loss of reputation loss of intellectual property

If an MNE wishes to be responsive to the needs of its local consumers but also wants to attain a lowest-cost position, it should follow a(n) ______ strategy.

transnational

Which of the following are the most important determinants of economic distance?

wealth and per capita income