IB Final Exam (2/3 of questions)

Enter into a forward contract

A South Korean firm wants to hedge against unpredictable movements in foreign exchange rates which can make the global capital market riskier. What should the company do to achieve this?

Location

A U.S. company imports raw materials from Africa, has manufacturing facilities in China, and uses a company in India for assembly. This company is benefiting from _____ economies.

Large-scale entrant

A _____ is more likely to capture first-mover advantages associated with demand preemption, scale economies, and switching costs

Pegged exchange

A ________ rate means the value of the currency is fixed relative to a reference currency and then the exchange rate between that currency and other currencies is determined by the reference currency exchange rate

Loss of confidence in the banking system

A banking crisis refers to

A control system

A company measures the performance of national operating subsidiary companies according to profitability. In this example, profitability is

A firm agrees to buy a certain amount of materials back from a country to which a sale is made

A counterpurchase occurs when

A managed float

A country wants to hold its currency against the US dollar without a formal pegged rate. The central bank of the country will intervene in the foreign exchange market to maintain the value of its currency should it depreciate rapidly against the dollar. This practice is known as...

Bring together those who want to invest money with those who want to borrow money

A function of a capital market is to...

Increasing the supply of funds available for borrowing

A global capital market benefits borrowers by lowering the cost of capital and...

customizing the firm's goods or services to local conditions.

A localization strategy focuses on increasing profitability by

Helps firms finance export deals when there are no other means

A major advantage of countertrade is that it

intervenes in the exchange rate system only in a limited way

A managed float is the exchange rate policy where the government

Global distribution center

A(n) ____ is a facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers or directly to customers anywhere in the world

Joint ventures

An advantage of ____ with a local partner is the knowledge of the local environment that the local partner contributes to the venture

Preempt recalls and capture demand

Apple has a first-mover advantage with many of its products, which means that Apple is able to

is obligated to provide a transportation service in return for a certain charge.

As a contract, the bill of lading specifies that the carrier

Bill of landing

As a document of title, a ______ can be used to obtain payment or a written promise of payment before the merchandise is released to the importer

Motivational research favors decentralization

Behavioral scientists have long argued that people are willing to give more to their jobs when they have a greater degree of individual freedom and control over their work. This suggests that

Bureaucratic

Budgets and capital spending rules are the most important ____ controls in subunits within multinational firms

Can avoid the duplication of activities that occurs when similar activities are carried on by various subunits within the organization

By centralizing decision making, a firm

setting up a greenfield venture.

Connor's company produces bicycles and wants to establish a wholly owned subsidiary in Austria. It can do this by acquiring an established firm in Austria or by

Localization

Customizing a firm's products is most closely associated with a ____ strategy

A small change in price produces a large change in demand

Demand is said to be elastic when

Distribution strategy

During the meeting, Kristof asked, "Where is the product typically bought by customers in the international market segments?" What element of the marketing mix is he addressing?

Lower the costs of creation value

Firms respond to pressures for cost reduction by trying to

Foster a multidirectional flow of skills between different subsidiaries

Firms that pursue a transnational strategy are trying to simultaneously do many things. Which of the following is one of those things?

Bring together complimentary skills

Forming a strategic alliance is a way to

Product line

Garrett works at a snack food company which has a product divisional structure. In this type of structure, each division is responsible for a distinct

Reduce product defects

Grigor's company has decided to implement the six sigma approach. His company would adopt this approach as a way to

The country will face high levels of price inflation

If a country increases its money supply rapidly under a fixed exchange rate regime, then

Localization

In a ____ strategy, the need for coordination between subunits is low and headquarters can manage foreign operations by relying primarily on output and bureaucratic controls and a policy of management by exception.

Global matrix structure

In which organizational structures are the domestic operations and foreign operations isolated from each other leading to coordination problems?

Insisting that countries seeking significant borrowings adopt IMF-mandated macroeconomic policies

Increasingly, the International Monetary Fund (IMF) has been acting as the macroeconomic police of the world economy by

can reduce their risk to below what could be achieved in a strictly domestic market

Investors using the global capital market have a wider range of investment opportunities than a purely domestic capital market. One of the most significant consequences of their choice is that they...

Global standardization strategy

Jake's multinational company wants to reduce its costs by leveraging g economies of scale, and it doesn't want to customize its products offerings or marketing plans for local conditions because that will increase costs. Which strategy should Jake's firm pursue?

Incentives

Kendrick is in charge of his company's subsidiary in Beijing. He recently received a large bonus check because the subsidiary has exceeded sales expectations by 25 percent. What aspect of organizational architecture did Kendrick benefit from?

Limit strategic flexibility

Large-scale strategic commitments may

Segmentation

Market _____ refers to identifying distinct groups of consumers whose purchasing behavior differs from others in important ways

Two

Most often, joint ventures involve ___ parties with each holding an equal percent ownership rate

Logistics

Nate works for a major appliance manufacturer. It is his job to plan, implement, and control how the raw materials and component parts flow through the manufacturing process. As it relates to supply chain management, Nate works in

Pegged

Nicaragua bases the valuation of its currency on the U.S. dollar. The value of Nicaragua's currency is changed based on the changes in the value of the dollar. This is an example of a ________ exchange rate system.

Typically disappear after a while, in spite of the complexity of the task

One characteristic of learning effects is that they

Growing concern that deregulation had gone too far

One of the consequences of the global financial crisis of 2008 and 2009 for hedge funds, which are private investment funds, was a(n)

Universal

People from every nation rely on the same petroleum and steel to drive their cars and build their homes. These two products are examples of _____ needs.

aquisition

Rinaldo Ravioli Ranch based in San Francisco plans to buy Maria's Marinara, which is based in Italy. Maria's Marinara has been in business for 12 years and demonstrates amazing profits. What type of entry mode is Rinaldo's using?

Dumping

Selling a product for less than the variable cost to produce the product, for the purposes of gaining market share and driving out competitors, is called what?

Buyback

Sharon works for a cereal manufacturing company. Her company recently built a manufacturing facility in Canada and agreed to take 15 percent of the cereal produced as partial payment over a ten-year period. What form of countertrade is her company pursuing?

They weigh very little but are expensive

Small electronic components have a high value-to-weight ratio, which means that

Existing culture

Sources of organizational inertia include

Argue that floating rates help adjust trade imbalances

Supporters of floating exchange rates

Make it difficult for later entrants to win business

Switching costs may

Attributable to macroeconomic forces affecting an economy

Systematic risk refers to movements in a stock portfolio's value that are...

Provides finance to facilitate cross-border trade between the United States and other countries

The Export-Import Bank

Maintain order in the international monetary system

The International Monetary Fund was established at the Bretton Woods conference to

International monetary system

The ___ refers to the institutional arrangements that govern exchange rates

Efficiency Frontier

The _____ shows all of the different positions a firm can adopt with regard to adding value to the product and low cost assuming the firm's internal operations are configured efficiently to support a particular position.

Cultural and economic

The continuing persistence of ____ differences between nations acts as a major brake on any trend toward global customer tastes and preferences.

Culture

The employees at ABC Corp are a close group. They work and play together, and they believe that the company's goals are their goals. This demonstrates the organization's

systematic reductions in production costs that have been observed to occur over the life of a product

The experience curve refers to

Limited

The liquidity of the market is ____ in a purely domestic capital market

Floating exchange rate regime

The world's four major trading currencies, the Japanese yen, the U.S. dollar, the British pound, and the European Union's euro, are all free to float against each other. This characterizes a...

Transnational

This is very high level of performance ambiguity in firms pursuing a ____ strategy compared to firms perusing other strategies

collect publicly-available information on potential allies

To increase the probability of selecting a good partner for forming a strategic alliance, a firm should

Information technology and deregulation by governments

Two factors that helped global capital markets take off in the last two decades of the 20th century were ____ and ____

are not confronted with pressures to reduce their cost structure.

Unlike firms pursuing a global standardization strategy, firms pursuing an international strategy

Exporters often face voluminous paperwork and complex formalities.

What is a common difficulty that trades face when exporting goods or services to other counties?

They are intimidated by the complexities and mechanics of exporting to countries where business practices, language, culture, legal systems, and currency are very different from the home market.

What is a reason that firms take a reactive approach to exporting rather than a proactive approach?

Predatory

When a company uses price as a competitors out of a national market, it is using _____ pricing

Produce the product in multiple locations close to major markets

When a company's product has a low value-to-weight ratio, the company should

Outsourcing

When a multinational corporation buys products or services from one of its suppliers that produces them somewhere else, whether domestically or globally, it is referred to as

Nearshoring

When a multinational corporation transfers business or information technology processes to suppliers in a nearby country, often one that shares a border with the firm's own country, as it referred to as

Pay less for loans

When using the Euromarkets, companies

flexible manufacturing

Which of the following allows a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output?

It is a wholly owned corporation of the U.S. government and promotes international trade.

Which of the following describes the Export-Import (Ex-Im) Bank?

Establishing a wholly owned subsidiary is generally the most costly method

Which of the following is a disadvantage of establishing a wholly owned subsidiary?

A few retailers supply most of the market in a concentrated system; many retailers are present in a fragmented system

Which of the following is a main difference between a concentrated retail system and a fragmented retail system?

Are rebates, coupons, or other sale offers a widespread activity to motivate customers in the international market segments targeted to buy a company's products?

Which of the following is a question to address when configuring the communication strategy of the marketing mix for a product?

Firms can lower costs through in-house production if it is more efficient than other production facilities

Which of the following is an advantage of engaging in in-house production of the entire product?

ability to earn returns from process technology skills in countries where FDI is restricted

Which of the following is an advantage of turnkey contracts?

The organizational environment should allow employees to report problems

Which of the following is an idea set forth by W. Edwards Deming?

Switching costs for customers

Which of the following is least likely to add to the pressure for a firm to be locally responsive?

The tax status is favorable

Which of the following is one of the attractions of the Eurobond market?

Defining the research objectives

Which of the following is the first step in the international market research process?

providing one-on-one counseling to active and new-to-export businesses

Which of the following is the main objective of the SCORE program administered by the SBA?

Economizing inventory holding costs

Which of the following is the major purpose of using just-in-time(JIT) systems?

Core competence skills are typically expressed in product offerings that other firms find difficult to match or imitate

Which of the following is true about core competence?

They do not have a high need for integrating mechanisms, either formal or informal

Which of the following is true about firms pursuing a localization strategy?

Novice exporters often have a poor understanding of competitive conditions in the foreign market.

Which of the following is true of many novice exporters?

Bill of exchange

Which of the following refers to an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time?

The production technology has low fixed costs and low minimum efficient scale

Which of the following situations would lead a firm to choose to decentralize production?

Many customers require face-to-face negotiations on their home turf

Which of these is a common difficulty that traders face when exporting goods or services to other countries?

Pharmaceuticals

Which products will most likely have high value-to-weight ratios?

Eurobonds

___ are international bonds, normally underwritten by an international syndicate of banks and placed in countries other than the one in whose currency the bond is denominated.

Foreign bonds; Eurobonds

____ are sold outside of the borrower's country and denominated in a currency in which they are issued, and ____ are normally underwritten by an international syndicate of banks and placed in countries other than the one in which the bond is denominated.

Pioneering

____ costs are typically associated with early entrants into a market and avoided by later entrants

Ipsos

_____ is an international market research company based in Paris, France, and is the only major international market research firm that is controlled and operated by market research.

Processes

_____ is/are the manner in which decisions are made and work is performed within the irganizatjon

Gold par value

the amount of currency needed to purchase one ounce of gold

Dirty float

when a country tries to hold the value of its currency within some range of a reference currency such as the U.S. dollar without adopting a formal pegged rate, it is referred to as a...