Chapter 12

Which term refers to the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits? Procedures Processes Incentives Values Controls

Controls

Which of the following is an infrastructure difference between countries which calls for product customization? Customization of food products to suit local requirements Difference in consumer electrical systems across continents Adaptation of advertisements to respect local sensibilities Translation of an advertisement into foreign languages Political demands from governments across countries

Difference in consumer electrical systems across continents

_____ refer to the reductions in unit cost achieved by producing a large volume of a product. Economies of scope Transition effects Learning effects Lead strategy Economies of scale

Economies of scale

Which of the following refers to systematic reductions in production costs that have been observed to occur over the life of a product? Economies of scale Lag effect Experience curve Transition effect Lead strategy

Experience curve

Strategic alliances refer to cooperative agreements between subsidiaries of a company. True False

False

An employee takes much less time to do a specific task now than it took him when he first started working on it six months ago. Which of the following is this an example of? Transition effects Learning effects Lead strategy Economies of scale Lag effects

Learning effects

__________________________is the most appropriate strategy when there are substantial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense. International strategy Localization strategy Transnational strategy

Localization strategy

_____ refer to cooperative agreements between potential or actual competitors. Hostile acquisitions Location economies Greenfield investments Strategic alliances Demergers

Strategic alliances

___________________________ is the most appropriate strategy when the firm simultaneously faces strong pressures for both cost reductions and local responsiveness. Transnational strategy International strategy Localization strategy

Transnational strategy

Localization is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and where cost pressures are not too intense. True False

True

The term core competence refers to skills within the firm that competitors cannot easily match or imitate. True False

True

The rate of return that a firm makes on its invested capital (ROIC) is calculated by: dividing market price of the firm's stock by earnings per share. dividing the net profits of the firm by total invested capital. dividing total invested capital by sales revenues of the firm. dividing the total revenues of the firm by total invested capital. dividing outstanding long-term debt by equity.

dividing the net profits of the firm by total invested capital.

A strategy that focuses primarily on increasing the attractiveness of a product is a low-cost strategy. True False

false

Pressures for cost reduction are most intense in industries producing highly differentiated products. True False

false

Companies that pursue a(n) _____ strategy take the products first produced for their domestic market and sells them internationally with only minimal local customization. international transnational global standardization domestic localization

international

A firm facing low pressures for local responsiveness and few pressures to contain costs might best pursue a(n) _______________________. localization strategy transnational strategy international strategy

international strategy

Pressures for local responsiveness may make it difficult to leverage skills and products associated with a firm's core competencies from one country to another compete effectively in more than one international market monitor and adapt to changing customer tastes in a large number of foreign markets

leverage skills and products associated with a firm's core competencies from one country to another

A(n) _____ strategy focuses on increasing profitability by customizing the firm's goods or services so that they provide a good match to tastes and preferences in different national markets. transnational universal domestic localization global standardization

localization

Markets are dynamic, and any firm will face competition. In time, international and localization strategies tend to become less viable, and managers need to ________________________________. orientate their companies toward either a global standardization or transnational strategy develop an appropriate exit strategy to withdraw profitably from markets that become too competitive revitalize their original strategies with more intense focus to avoid spreading energies too thinly

orientate their companies toward either a global standardization or transnational strategy

Firms that pursue a(n) _____ strategy are trying to simultaneously achieve low costs through location economies, economies of scale, and learning effects; differentiate their product offering across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firm's global network of operations. transnational universal domestic global standardization localization

transnational