Chapter 7 Strat and Policy

If your company produces a basic mobile phone with limited features and wants to compete internationally, which strategy would the company most likely employ—a multidomestic strategy, a transnational strategy, or a global strategy?

A global strategy would work best since the same phone will be offered and most likely will require only very minor deviations from one country to another.

If your company's product is large home appliances such as washing machines, ranges, ovens, and refrigerators, which strategy for competing internationally would your company most likely employ—a multidomestic strategy, a transnational strategy, or a global strategy?

A multidomestic strategy is recommended because of significant country-to-country differences in customer preferences, buying habits, and government regulations in the large appliance industry.

Which one of the following is not a factor that a company must contend with in competing in the markets of foreign countries?

A need to convince shippers to keep transportation costs low

If your company's product is dry soup mixes and canned soups, which strategy for competing internationally would your company most likely employ—a multidomestic strategy, a transnational strategy, or a global strategy?

A transnational approach is appropriate. Country-to-country customization to accommodate differences in taste preferences would most likely be necessary.

If your company's product is apparel and footwear, would a multidomestic strategy, a transnational strategy, or a global strategy seem to have more appeal?

A transnational strategy is preferred since apparel and footwear items can reflect global fashion trends while being customized as needed because of country-to-country differences in customer preferences and tastes.

Which of the following is not a potential motivation for entering into strategic alliances or other cooperative arrangements with foreign companies?

Better enable the use of a "think global, act global" strategy and facilitate cross-market subsidization

Which of the following statements about entering developing markets such as China, India, Russia, and Brazil is correct?

Building a market for the company's products can often turn into a long-term process that involves reeducation of consumers.

Which one of the following is not a reason a company decides to enter foreign markets?

Building the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market

Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of developing country markets?

Develop new sets of core competencies that allow a company to offer value to consumers of emerging markets in ways unmatched by rivals.

Which one of the following statements concerning the impact of fluctuating exchange rates on companies competing in foreign markets is not true?

Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made

Which of the following is not a strategic option companies should consider in tailoring their strategy to fit circumstances of emerging country markets?

Enter only those emerging markets that provide profit sanctuaries by offering opportunities for offensive strategies, such as preemptive strikes.

Which of the following is not a potential benefit of strategic alliances or other cooperative arrangements between foreign and domestic companies?

Safeguarding the company's dependence, allowing for positive engagement once the purpose has been serving, and ensuring products of important technical standardization requirements are not developed

Which of the following is not an advantage of utilizing a licensing strategy to participate in foreign markets?

The ability to safeguard the company's technical know-how or patents

Which of the following is not a possible reason why Uber opted to expand its on-demand transportation services into foreign markets?

To build the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market

Which of the following is not a reason why a company decides to enter foreign markets?

To impart technical knowledge to high-cost human resources in developing nations

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous

Two answers are correct when high transportation costs make it expensive to operate from central locations and whenever buyer-related activities are best performed in locations close to buyers.

Which of the following is not an example of a cross-border alliance?

Western Union purchases the global payments division of British-owned Travelex Ltd.

The advantages of manufacturing goods in a particular country and exporting them to foreign markets

are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.

The multidomestic strategy of "think local, act local"

becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.

Using domestic plants as a production base for exporting goods to selected foreign country markets

can be an excellent initial strategy to pursue international sales.

To use location to build competitive advantage when competing in both domestic and foreign markets, a company must

consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations and (2) in which countries to locate particular activities.

A "think global, act global" approach to strategy making is preferable to a "think local, act local" approach when

country-to-country differences are small enough to be accommodated within the framework of a mostly uniform global strategy.

Which of the following is the biggest strategic issue when competing in the markets of foreign countries?

determining whether to standardize or customize the company's offerings.

A "think global, act global" multi-domestic type of strategy

focuses on the same basic competitive approach (low-cost, differentiation, best-cost, focused) in all countries where the firm does business.

The primary reasons that companies opt to expand into foreign markets are to

gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.

Companies racing for global market leadership

generally have to consider establishing competitive positions in the markets of emerging countries.

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchiser to expend only the resources to recruit, train, and support foreign franchisees.

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations except

if resources retain their foreign contexts so there is competitive advantage over a broader domain.

The chief difference between a "think global, act global" and a "think global, act local" approach to crafting a global strategy is that

local managers are given more latitude in adapting the global strategy approach as may be needed to accommodate local buyer preferences and be responsive to local market and competitive conditions.

In order to use location to build competitive advantage when competing on domestic and international level, a company must

pursue blue-ocean opportunities both in the company's home country market and in global markets.

Multinational competitors tend to concentrate activities in a limited number of locations when

there are significant scale economies and/or steep learning curve effects associated with performing certain activities in a single location, costs of performing the activity are lower in particular geographic locations, and certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages.

Companies tend to concentrate their activities in a limited number of locations

when there is a steep learning curve associated with performing an activity.

One of the biggest strategic challenges to competing in the international arena is

whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the tastes and preferences of local buyers.