htm 2314 exam 4: chapters 12-14

How does possessing a core competence help a firm? a) It enables a firm to reduce the costs of value creation. b) It reduces the need to replicate a business model in a foreign market. c) It reduces the scope of transfer of skills to foreign markets. d) It helps a firm to create value in such a way that premium pricing is impossible. e) It reduces a firm's dependence on its logistics function.

a) It enables a firm to reduce the costs of value creation.

The government organization that employs 76 district international trade officers and 10 regional international trade officers throughout the United States as well as a 10-person international trade staff in Washington, D.C. to help potential exporters is the: a) Small Business Administration. b) U.S. Commercial Service. c) sogo shosha. d) Federal Trade Commission. e) International Trade Administration.

a) Small Business Administration.

Due to the complexity and diversity of foreign markets, firms sometimes hesitate to seek export opportunities. These firms can best overcome ignorance by: a) collecting information. b) outsourcing decisions. c) creating revenue. d) shortening production runs. e) lowering unit costs.

a) collecting information.

Of all the value creation activities in a firm, which of the following creates value by discovering consumer needs and communicating them back to the R&D function of the company, which can then design products that better match those needs? a) marketing and sales b) human resources c) production d) logistics e) information systems

a) marketing and sales

CHAPTER 13: Which of the following is a reason why a relatively poor country may be an attractive target for inward investment? a) rapid economic growth b) currency depreciation c) high cost of living d) political instability e) less developed infrastructure

a) rapid economic growth

Which of the following is a way in which the U.S. Department of Commerce helps potential exporters? a) It coordinates a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters. b) It assembles a "comparison shopping service" for countries that are major markets for U.S. exports. c) It starts exporting operations for firms until they are well established. d) It oversees volunteers with international trade experience and directs them to provide one-on-one counseling to active and new-to-export businesses. e) It provides export specialists who act as the export marketing departments or international departments for their client firms.

b) It assembles a "comparison shopping service" for countries that are major markets for U.S. exports.

Which of the following is an example of a first-mover advantage? a) increased probability of surviving in a foreign market b) ability to create switching costs that tie customers into one's products or services c) opportunity to observe and learn from the mistakes of other entrants d) ability to let later entrants ride ahead on the experience curve e) avoidance of pioneering costs that a later entrant into the foreign market has to bear

b) ability to create switching costs that tie customers into one's products or services

Which of the following is a primary activity in the operations of a firm? a) human resource function b) research and development c) company infrastructure d) information systems e) logistics function

b) research and development

In exporting, problems with local marketing agents can be overcome by: a) changing agents frequently. b) setting up wholly owned subsidiaries in foreign nations to handle local marketing. c) selling intangible property to a franchisee and insisting on rules to conduct the business. d) engaging in turnkey projects and exporting process technology to foreign firms. e) entering into cross-licensing agreements with foreign firms.

b) setting up wholly owned subsidiaries in foreign nations to handle local marketing.

Which of the following is a disadvantage of large-scale entry into a foreign market? a) inability to build rapid market-share irrespective of the scale of entry b) decrease in a firm's exposure to the foreign market c) availability of fewer resources to support expansion in other desirable markets d) difficulty attracting customers and distributors for the product e) limited product acceptance due to the avoidance of potential losses

c) availability of fewer resources to support expansion in other desirable markets

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals? a) raising trade barriers b) licensing their core technologies c) focusing on market niches d) standardizing their product offerings e) entering into turnkey projects

c) focusing on market niches

Typically, the price a firm charges for a good or service is: a) more than what customers assume it would be. b) the same as the value placed on that good or service by the customer. c) less than the value placed on that good or service by the customer. d) less than the lowest priced similar good or service in the market. e) more than the market price for similar goods or services.

c) less than the value placed on that good or service by the customer.

In which of the following situations can an international business command higher prices for a particular product in a foreign market? a) sales volumes is relatively low in the foreign market b) the product is widely available in the foreign market c) the product offers greater value to customers in the foreign market d) domestic competitors are selling alternatives at reduced prices e) the product is more suitable to other foreign markets

c) the product offers greater value to customers in the foreign market

Which of the following countries presents a favorable benefit-cost-risk trade-off scenario for foreign expansion? a) a country that is less developed and politically unstable b) a country ridden by private-sector debt c) a country that is heavily populated d) a country with a free market system e) a country experiencing a dramatic upsurge in inflation rates

d) a country with a free market system

Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for companies based in developing nations? a) enter markets rapidly and exit at an equally rapid pace to avoid heavy losses b) do not focus on market niches that multinational companies ignore c) build up financial resources to match those of the largest global competitors d) benchmark one's operations and performance against foreign multinationals e) enter foreign markets at a similar time and scale as multinational companies

d) benchmark one's operations and performance against foreign multinationals

According to Michael Porter, what are the two basic strategies for creating value and attaining a competitive advantage in an industry? a) value creation and generalization b) profitability and strategic fit c) one-size-fits-all and zero-sum d) differentiation and low-cost e) comparison and standardization

d) differentiation and low-cost

Which of the following shows all of the different positions that a firm can adopt with regard to value creation and low cost assuming that its internal operations are configured adequately to support a particular position? a) demand-value model b) surplus curve c) experience curve d) efficiency frontier e) optimal output model

d) efficiency frontier

Processes are the: a) metrics used to measure the performance of subunits. b) devices used to reward appropriate managerial behavior. c) norms and value systems that are shared among the employees of an organization. d) manner in which decisions are made and work is performed within the organization. e) metrics used to make judgments about how well managers are running the subunits.

d) manner in which decisions are made and work is performed within the organization.

Which of the following is a common pitfall that novice exporters come across? a) poor understanding of the opportunities in the domestic market b) low unit costs c) familiar distribution systems d) problems securing financing e) increased economies of scale

d) problems securing financing

In international business, an advantage of being a late entrant in a foreign market is the ability to: a) build sales volume and ride down the experience curve before early entrants. b) create switching costs that tie customers into products or services. c) create a cost advantage over first movers. d) ride on an early entrant's investments in learning and customer education. e) capture demand by establishing a strong brand name.

d) ride on an early entrant's investments in learning and customer education.

Japan's great trading houses are referred to as a) kanban. b) guanxi. c) kaizen. d) sogo shosha. e) zaibatsu.

d) sogo shosha.

In general, the more value customers place on a firm's products: a)the higher the competitive pressure from other firms. b)the lesser the quality of the product. c) the lesser the consumer surplus for those products. d) the higher the price the firm can charge for those products. e) the lesser the profitability of the firm.

d) the higher the price the firm can charge for those products.

Who among the following should be viewed as part of a firm's infrastructure? a) research and development scientist b) procurement manager c) marketing personnel d) top management e) production manager

d) top management

Which of the following institutions within the U.S. Department of Commerce is dedicated to providing businesses with intelligence and assistance for attacking foreign markets? a) Small Business Administration b) Federal Trade Commission c) Bank of New York d) Bureau of Competition e) International Trade Administration

e) International Trade Administration

Which of the following is an advantage of franchising as a mode of entry into foreign markets? a) Manufacturing concerns can be effectively coordinated across adjacent processes. b) The franchiser can easily maintain uniform quality across many geographically dispersed franchisees. c) The franchiser is allowed to take profits out of one country to support competitive attacks in another. d) The franchiser can support its short-term interests in a country with an unstable economy. e) The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.

e) The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.

Which of the following is true of medium-sized and small firms? a) They explore foreign markets to see where the opportunities lie for leveraging their technology. b) They are proactive about seeking opportunities for profitable exporting. c) They are not intimidated by the complexities of foreign legal systems. d) They have a high degree of familiarity with foreign market opportunities. e) They consider exporting only after their domestic market is saturated.

e) They consider exporting only after their domestic market is saturated.

In terms of using a third party in international trade, title to the products is given to a bank by the exporter in the form of a document known as a: a) bill of exchange. b) merchandise bill. c) draft. d) letter of credit. e) bill of lading.

e) bill of lading.

The liability associated with foreign expansion is greater for foreign firms that: a) use countertrade agreements. b) choose to ride on an early entrant's investments. c) avoid pioneering costs. d) ride down the experience curve behind their rivals. e) enter a national market early.

e) enter a national market early.

For a firm to maximize its profitability, it is necessary that it: a) creates products similar to the products of its competitors. b) minimizes the value of the consumer surplus. c) does not configure its internal operations to reduce costs. d) strips all the value out of its product offering. e) picks a position on the efficiency frontier that is viable.

e) picks a position on the efficiency frontier that is viable.

A lack of trust between two parties engaged in international trade is exacerbated by the: a) possibility of doing business with someone with whom they have been associated for a long time. b) narrowing distance between the two parties due to technological advances. c) similar preferences of the parties regarding how a transaction should be configured. d) saturation of the domestic market. e) problems of using an underdeveloped international legal system to enforce contractual obligations.

e) problems of using an underdeveloped international legal system to enforce contractual obligations.

CHAPTER 12: The rate of return that a firm makes on its invested capital is referred to as: a) process value. b) strategic fit. c) stakeholder return. d) profit growth. e) profitability.

e) profitability.

CHAPTER 14: Exporting is nearly always a way to increase the revenue and profit base of a company because: a) it does not involve wasting resources on paperwork. b) international markets are less complex than their domestic counterparts. c) foreign governments encourage imports from other countries. d) there is little competition in the international market. e) the international market is much larger than the domestic market.

e) the international market is much larger than the domestic market.

When a time draft is presented to a drawee, he or she signifies acceptance of it by: a) delivering the goods immediately. b) selling the draft to an investor at a discount from its face value. c) paying the draft amount immediately. d) providing a collateral for the amount specified in the bill. e) writing or stamping a notice of acceptance on its face.

e) writing or stamping a notice of acceptance on its face.