International Management Exam 2
What is Most-Favored-Nation Clause (MFN)?
A GATT provision that required member countries to automatically extend to all members countries the same benefits, usually tariff reductions, they agreed on with any other countries.
T or F: Staging and pacing is how a firm will earn a profit; that is, how a firm will generate positive returns over and above its cost of capital
False
T or F: The EU consists of the same countries as the continent of Europe
False
T or F: The business competence of an organization renders concepts like political stability and legal security irrelevant
False
T or F: The disadvantage of global strategy is that the firm faces more uncertainty because of the tailored strategies in different countries
False
T or F: The goal of NAFTA has been to encourage trade between the South American countries.
False
T or F: The more similar markets in different regions are, the lesser the pressure for an industry to globalize.
False
T or F: The rate of industry change remains relatively the same from one industry to the next in one financial year
False
____ are straight-line, one-factor projections from present to future
Forecasts
Which regional economic integration is the most basic form of economic cooperation?
Free-trade area
The ___ is a series of rules governing trade that were first created in 1947 by 23 countries.
General Agreement on Tariffs and Trade (GATT)
What is an example to a customs union?
Gulf Cooperation Council (GCC)
In a strategy diamond, what do differentiators evaluate?
How we will get there
In a strategy diamond, what does economic logic evaluate?
How will we obtain our returns
In a strategy diamond, what do vehicles evaluate?
How will we win the marketplace
What is the sales of products and services in one country that are sourced in another country?
Importing
_____ involves the sale of products or services in one country that are sourced in another country.
Importing
_____ is a stealth form of international entry, because the factors that favor globalization can also lead to a higher level of imports.
Importing
A(n) ____ involved a contractual agreement between two or more enterprises that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose.
Strategic alliance
T or F: Vehicles refers to how being international differentiates the organization from competitors, makes products or services more attractive to future customers, and strengthens the effectiveness of the differentiators in the chosen area
False
T or F: WTO functions as a trade facilitator for the member countries but it has no power to hear disputes or suggest a solution.
False
T or F: When transportation costs and automation are both high, then the knowledge worker component of the location calculation becomes more important.
False
T or F: a disadvantage of licensing and franchising is low control, low local knowledge, puoritineitla negative environmental impact of transportation
False
T or F: economic logic refers to when you start expanding, how quickly you expand and the sequence of your expansion efforts
False
T or F: exporting has an advantage in ast entry, low cost, and low risk
False
T or F: it is not important to do detailed market research when attempting to understand local consumers
False
T or F: markets require evaluation of domestic customer needs
False
T or F: mission statements are not longer than vision statements
False
T or F: staging and pacing refers to the preference to use organic investment, growth, alliances, and acquisition as expansion methods
False
T or F: the more similar markets in different regions, the less pressure for an industry to globalize
False
T or F: the process of deciding what to do is called strategy
False
T or F: the vision statement is the "purpose for being"
False
T or F:The more similar markets in different regions are, the lesser the pressure for an industry to globalize
False
T or F: Dumping occurs when a company exports to a foreign market at a price that is either lower than the domestic prices in that country of less than the cost of production
True
T or F: Economies of scale, in microeconomics, are the cost advantages that a business obtains through expanding in size, which is one reason why companies grow large in certain industries
True
T or F: Firms are more likely to be successful when they exploit a change in the environment rather than simply survive or oppose the change
True
T or F: GATT initial focus was on trade barriers, such as tariffs, which are taxes placed on imports or exports
True
T or F: Global businesses often have teams of in-house professionals monitoring the WTO as well as the regional trade alliances.
True
T or F: Global firms in general prosper best in times of conflict.
True
T or F: In Free-Trade area, member countries remove all barriers between themselves but are free to independently determine trade policies with nonmember nations
True
T or F: In a global strategy a firm will not be able to gain a high market share in local markets because it isn't as responsive to local markets
True
T or F: In a truly global industry, the core product is standardized, the marketing approach is relatively uniform, and competitive strategies are integrated in different international markets
True
T or F: JV's, Mergers, Acquisition (greenfield investments) have fast entry, well known, and establish operations
True
T or F: Managers also need to take into consideration the macroeconomic factors that will have near long-term effects on the success of their strategy
True
T or F: Members of NAFTA can establish their own trading rules for nonmember countries
True
T or F: NAFTA has not been as impactful as its supporters had hoped nor as detrimental to workers and companies as its critics feared
True
T or F: Organizations that promote coherent images and brands globally, realize economies of scope and scale
True
T or F: Partnering and strategic alliance have an advantage in shared costs reduce needed investment, reduce risk, and it is seen as a local entity
True
T or F: Similar to a customs union, common markets have a trade policy for trade with non member countries
True
T or F: Tariffs refer to taxes, which are placed on imports and exports
True
T or F: The CAGE framework helps pinpoint the differences across countries that might handicap multinational companies relative to local competitors
True
T or F: The General Agreement on Trade in Services (GATS) requires member nations to treat foreign service companies as they would domestic ones
True
T or F: The WTO does not necessarily establish formal agreements in all of the these areas but does provide a forum to discuss how global trade impacts other aspects of the world
True
T or F: The advantage of exporting is that firms avoid the expense of establishing operations in the new country
True
T or F: The disadvantage of a multidomestic strategy is that it cannot take advantage of economies of scale that could help decrease costs for the firm overall
True
T or F: The factors mentioned in PESTEL are inter-related
True
T or F: The national deficit is the amount of borrowing that a country does from either the private sector or other countries
True
T or F: The primary impact for businesses in a conflict is the areas of staffing, operations, regulations, and currency convertibility and financial management
True
T or F: There are more EU member countries than there are countries using the euro
True
T or F: Under GATT countries should open their markets equally to member nations and there should be no discrimination of preferential treatment?
True
T or F: Vehicles refers to the preference to use organic investment, growth, alliances, and acquisition as expansion methods
True
T or F: When an organization plans to expand into a foreign country, it needs to understand what the local consumers look for when making a purchasing decision
True
T or F: When looking into regional differences it is important to evaluate the taste in food, attitudes, and lifestyles, and purchasing power
True
T or F: a Customs Union provides economic cooperation similar to a free trade zone
True
T or F: a strategy that is congruent with PESTEL in the home environment gives no assurance that it will also align in other countries
True
T or F: business strategy refer to the way in which a firm plans to achieve its objectives within a particular business
True
T or F: economic logic refers to how international strategy contributes to the overall economic logic of your business and corporate strategy
True
T or F: even with exporting firms face the challenged of exchange rate
True
T or F: exporting, licensing arrangements, and partnering are apart of strategic alliances
True
T or F: in offshoring the company takes a function out of its home country and places the function in another country generally at a lower cost
True
T or F: in outsourcing, the company delegates and entire process (such as accounts payable_ to the outsource vendor
True
T or F: leader of the organization formulate strategy while everyone else is responsible for strategy implementation
True
T or F: markets need homogenous customer needs
True
T or F: markets require evaluation of global customer needs
True
T or F: markets require global channels
True
T or F: outsourcing allows access to specialized equipment that may be too expensive to invest in unless that process is their chief business
True
T or F: purchasing, logistics, inventory, and customer service form the key value-chain activities of an organization
True
T or F: staging and pacing refers to when you start expanding, how quickly you expand and the sequence of your expansion efforts
True
T or F: strategy formulation and strategy implementation are interdependent
True
T or F: successful global firms are those who have a clear understanding of how each market fits into the firms overall vision and strategy
True
T or F: the franchisor produces a bundle of services and products to the franchisee
True
T or F: the more similar markets in different regions, the greater the pressure for an industry to globalize
True
T or F: the multi domestic strategy has been more commonly used by European multinational firms because of the variety of cultures and market found in Europe
True
T or F: the outsourcer typically specialized in a particular process of set of processes which gives them high level of expertise
True
T or F: there has been an increase in the different kinds of trading blocs with more than one hundred agreements in place and more negotiation to reconfigure their economic and political interes
True
T ro F: in a transnational strategy, firms must balance opposing local and global goals
True
In 2018, NAFTA was replaced with what agreement?
United States-Mexico- Canada Agreement (USMCA)
The ____ is the only institutional body charged with facilitating free and fair trade between member nations
WTO
What is the primary method by which countries, on behalf of their home country businesses and address trade issues?
WTO
What is the world's primary organization focused of addressing the rules of international trade between countries?
WTO
Which organization undertakes discussions on issues related to globalization and its impact on people and the environment as well as trade specific matters?
WTO
What is an example of cost leadership strategy?
Walmart
Which of the following questions would help an organization determine the favorability of the political factors for a business expansion is a PESTEL analysis?
What are the country's foreign trade regulations?
Which of the following questions would help an organization determine the favorability of the economic factors for a business expansion is a PESTEL analysis?
What are the local employment levels per capita, and how are they changing?
Which of the following questions would help an organization determine the favorability of the legal factors for a business expansion is a PESTEL analysis?
What are the regulations regarding monopolies and private property?
Which of the following is affected by differences in consumer incomes in the CAGE framework?
economic
Which of the following is affected by differences in costs in -natural resources -financial resources -human resources -infrastructure -intermediate inputs -information of knowledge in the CAGE framework?
economic
___ refers to facet of the strategy diamond that refers to how a firm will earn a profit; that is, how a firm will generate positive returns over and above it cost of capital
economic logic
____ refer(s) to how a firm will earn a profit; that is, how a firm will generate positive returns over and above its cost of capital
economies logic
____ refers to the cost advantages that a business obtains due to expansion; primarily refer to efficient associated with supply-side changes, such as increasing or decreasing the scale of production of a single product type
economies of scale
____ refer to cost advantages that a business obtains due to expansion, primarily referred to efficiencies associated with demand side changes, such as increasing or decreasing the scope of marketing and distribution of different types of product
economies of scope
What are the advantages of outsourcing?
efficient process, reduced costs, and access to specialized equipment
Which pro of regional agreements remove restrictions on labor movement, where economic integration can help expand job opportunities?
employment opportunities
Companies employ ____ to understand the latent, unarticulated needs of local consumers
enthographers
Which international expansion entry mode avoids expense of establishing operations in the new country?
exporting
Which international expansion entry mode is the most common and easiest way to enter, and most firms begin with?
exporting
____ refers to the sale of p or s in foreign countries that are sourced or made in the home country
exporting
What are the fix most common modes of international entry?
exporting, licensing, partnering, acquisition, and greenfield venturing
Dumping refers to a situation when a company:
exports to a foreign market at a price that is either lower than the domestic prices in that country or less than the cost of production.
T or F: The WTO did not absorb GATT's standing agreements.
false
What is at the advantange of the internal expansion entry mode of exporting?
fast entry and low risk
Venture-capital firms, private equity providers, and mutual funds are examples of specialized intermediaries for:
financial markets
NAFTA has a higher requirement for what two products?
footwear and cars
_____ refers to granting rights on intangible property, like tech or a brand names, to a foreign company for a specified period of time and reaching a royalty in return
franchising
What is an advantage of a greenfield venture (launch of a new wholly owned subsidiary)?
gain local market knowledge, and be seen as an insider who employs locals with maximum control
Which of the following is affected by lack of sea r river access, size of a country, weak transportation, and differences in climated in the CAGE framework?
geographic
Which of the following is affected by physical remoteness and lack of a common border in the CAGE framework?
geographic
Which of the following is characterized by communication and connectivity, and high local supervision and operational requirements in the CAGE framework?
geographic
Which of the following is characterized by products having low value of weight or bulk ration or fragile in the CAGE framework?
geographic
The US is separated from Nigeria by 5,840 miles and the Atlantic ocean. According to CAGE framework this is a case of:
geographic distance
In which international strategy are products more standardized and the world is more flat?
global strategy
Which international strategy emphasizes economies of scale and offers greater opportunities to utilize innovation developed at the corporate level on in one country in other markets
global strategy
Which international strategy requires sharing of resources as well as coordination and cooperation across country boundaries which in turn require centralization and headquarter control?
global strategy
_____ refers to an international strategy in which the home office centralizes and controls decision making authority and seeks to maximize global effienciey
global strategy
What is a way for international expansion that is achieved through acquisition and establishing new wholly-owned subsidiaries?
greenfield investment
If a country finds another country's trade practices unfair or discriminatory, WTO could:
hear from both countries and mediate a solution.
What is the goal of the WTO?
help producers of goods and services, exporters, and importers conduct their business
What is a disadvantage of a greenfield venture (launch of a new wholly owned subsidiary)?
high costs, high risk due to unknowns, slow entry due to setup time
____ refers to the number of similar business or business activities at the same level of the value chain
horizontal scope
What is the second question that corporate strategy address?
how can the parent company add value to the subsidiaries
What is the third question that corporate strategy address?
how can we diversify our business or entering a new industry help us compete in our other industries
What is the second step in PESTEL?
identify and categorize the information that applies to factors in your context
____ refers to the buying of goods and services from foreign countries and bringing them back into the home country
importing
Current account deficit refers to:
imports being greater than exports
Include identifying, purchasing, and handling all the raw materials or inputs that go into make a company's products
inbound logistics
In the case of the CAGE framework, what is distance defined as?
include physical geography, cultural, adminstatvie, and economic differences
Trade creation refers to the:
increased number of opportunities for countries to trade with one another by removing barriers to trade and investment.
what does much of the analysis depend on in international market due diligence?
industry, product, and customer demographics
The absence of key specialized intermediaries found in the markets of finance, managerial talent, and products, which otherwise reduce transaction costs
institutional void
In which business level strategy would a firm need to invest in activities that create unique value but look for ways to recuse costs in non value activities
integrated cost-leadership strategy
____ is a strategy to produce relatively differentiated products or services at relatively low costs and is a combination of differentiation and cost leadership
integrated cost-leadership strategy
outsourcing a non domestic third party
international outsourcing
____ refers to the use of a corporate strategy to guide the choice of which markets including different countries a firm competes in
international strategy
MERCOSUR is an economic trade initiative which:
is committed to the consolidation of democracy and the maintenance of peace throughout Southern America.
The EU is an example of a economic union because:
it removes barriers to trade and adopt common economic policies
_____ refers to a contractual strategic partnership between two or more separate business entities to pursue a business opportunity together
joint venture
When it was introduced, NAFTA was highly controversial because:
lead to US jobs being sent to Mexico
What is the disadvantage of licensing and franchising?
less control, licensee may become competitor, and legal and regulatory must be sound?
Which internal national mode of expansion is characterized by fast entry, low cost, and low risk?
licensing and franchising
What is the disadvantage of the internal expansion entry mode of exporting?
low control, low local knowledge, puoritineitla negative environmental impact of transportation
What are the two potential types of competitive advantage
lower costs than competitors or better quality at the premium price
How does offshoring differ from outsourcing?
the firm retains control of the operations and directly hires the employees
T or F: An international strategy has to be adjusted to adapt, overcome, or exploit differences across countries and regions.
true
T or F: Business-level strategies are intended to create differences between a firm's position and those of its rivals.
true
T or F: In the first decade after signing NAFTA, almost all tariffs between Mexico, Canada, and the US were phased out
true
T or F: NAFTA came into being during a period when free trade and trading blocs were popular and positively perceived
true
T or F: NAFTA's rules do ensure that a foreign exporter won't just ship to the NAFTA country with the lowest tariff for non member countries
true
T or F: The WTO deals with subsidies, trade rules, and intellectual property protection
true
T or F: The WTO global focus on multilateral trade agreements and cooperation has grown exponentially
true
T or F: The WTO's primary purpose is to serve as a negotiating forum for memeber nations to dispute, discuss, and debate treade-realted matters
true
T or F: firms achieve cost leadership strategy through a multi pronged set of tactics
true
T or F: in a global strategy, the strategic business units operating in each country are assumed to be interdependent, and the home office attempts to achieve integration across the business
true
T or F: in a multi domestic strategy, the firm can customize its products to meet specific preferences and needs of local customers
true
T or F: the possibility of licensing makes the world flatter because it creates a legal vehicle for taking p or s delivered in one country and providing nearly identical version in another
true
T or F: the vision statement says on the basis of that purpose, this is what we become
true
T or F: transferable marketing approaches is within the markets factor that favors globalization
true
T or F: unlike vision statements, identification of arenas must be very specific
true
What is the POLC framework stand for?
understand and communicate the relationship between strategy formulation and strategy implementation
how can companies differentiate their product?
unique features, innovations, product upgrades or great customer service
Euro countries refer to those countries that:
use the euro as their currency.
the sequence of activities that a firm must undertake to create value, such as marketing, sales, and service
value chain
____ refers to the facet f the strategy diamond that relates to the means for participating in targeted arenas, such as alliances, organic growth, and acquisition
vehicles
Acquisitions, alliances, and organic investment and growth are examples of:
vehicles for entering a new arena.
____ refers to all the activities from the gathering of raw materials to the sale of the finished product that a business goes through to make a product
vertical scope
A future oriented declaration of an organizations purpose and aspirations
vision statement
____ refers to the future oriented declaration of the organizations purpose
vision statement
How can you use your opportunities to overcome the weaknesses your are experiencing?
weaknesses and opportunities
How can you minimize your weaknesses and avoid threats?
weaknesses and threats
T or F: MFN status should disadvantage in comparison with others in similar roles as a trading partner, buyer, or investor
False
NAFTA rules state that:
at least 50% of the net cost of most products come from or be incurred in the NAFTA region
T or F: NAFTA came into being during a period when free trade and trading blocs were not popular and perceived negatively
False
T or F: Only the primary activities make up a firm's value chain.
False
T or F: Rescinding NAFTA would not hurt the countries involved.
False
What are the 3 reasons why a country may embark on an expansion strategy?
1. to improve cost-effectiveness 2. To expand new markets for new customers 3. To follow global customers
What industry did member countries of GATT agreed to do an export subsidy?
Agriculture
What is the World Trade Organization?
An international organization that insures that the terms of the General Agreement on Tariffs and Trade (GATT) are carried out
Who are the full member are in Mercado Común del Sur (MERCOSUR)?
Argentina, Brazil, Paraguay, and Uruguay
Who are the associate members in Mercado Común del Sur (MERCOSUR)?
Bolivia, China, Columbia, Ecuador, Guyana, Peru, and Suriname
Which regional economic integration allows for creation of economically integrated markets between member countries?
Common Market
What is an example of a common market?
Common Market for Eastern and Southern Africa (COMESA)
What can be used to compare markets from the perspective of a particular company?
CAGE framework
Which pro of regional agreements do member nations find it easier to to agree with smaller number of countries and regional understanding and similarities facilitate political cooperation?
Consensus and cooperation
What was the goal of NAFTA?
Create uniform customs policies, avoid export subsidies (trade barriers and tariffs), reduce investment restrictions, extension of intellectual property right to all involved
Which of the following is affected by products carrying country-specific quality associations in the CAGE framework?
Cultural
Which regional economic integration is characterized by removal of trade barriers between member countries and member agree to treat trade with non member countries in a similar manner?
Customs Union
What is the best way for people to learn the needs of a new foreign market?
Deploy people to immerse themselves into a maket
What does CAGE framework make visible for managers?
Distance
T or F: If the acquiring firm is in a country with a strong currency, acquisitions becomes expensive for the acquiring firm.
False
T or F: In Free-Trade Area, member countries agree to treat trade with nonmember countries in a similar manner
False
T or F: In a global strategy a firm will be able to gain a high market share in local markets because it is responsive to local markets
False
T or F: In northern England, KFC stresses gravy and potatoes, while in Thailand, it offers fresh rice with soy or sweet chili sauce. This is an example of a global strategy.
False
T or F: Intellectual property rights (IPR) law does not deal with the financial aspect of creation of an individual
False
T or F: JV's, Mergers, Acquisition (greenfield investments) gain local market knowledge and can been seen as an insider who employs locals with maximum control
False
T or F: MERCOSUR is committed to the consolidation of democracy and the maintenance of peace throughout the Asian continent
False
Which regional economic integration is created when countries enter into an agreement to remove barriers to trade and apt common economic policies?
Economic Union
Which of the following is an advantage of acquisition?
Established manufacturing operations in the foreign country
The _____ provides the day-to-day leadership and initiates legislation.
European Commission
What is an example of an economic union?
European Union
Which agreement is the most integrated form of iconic cooperation?
European Union
____ refers to the sale of products and services in foreign countries that are sourced from the home country.
Exporting
T or F: A benefit to MERCOSUR is the intra-regional trade it has produced.
False
T or F: A common market is formed when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies
False
T or F: A country is not allowed to borrow money for investing in domestic projects such as investing in the public sector or building infrastructure
False
T or F: Acquisition is a bad strategy when an industry is consolidating
False
T or F: An organization, when it is planning to expand in a foreign country, needs to view the country as a monolith
False
T or F: Arenas refers to the preference to use organic investment, growth, alliances, and acquisition as expansion methods
False
T or F: Business strategy is concerned with the kind of business an organization should undertake.
False
T or F: Corporate strategy addresses how to compete to achieve objectives
False
T or F: Corporate strategy is concerned with the manner in which an organization should compete in the market
False
T or F: Corporate strategy is concerned with the manner in which an organization should compete in the market.
False
T or F: Entrepreneurs and small businesses are most likely to avoid the use of exporting as a way to get their product into markets around the globe because of costs of exporting is higher than that of other entry modes
False
T or F: GATT's initial focus was on non-tariff barriers of trade
False
T or F: Home-market norms tend to remain the same over time irrespective of the shifting demographics due to immigration or aging populations
False
What is the first question that corporate strategy address?
In what business should we compete
Involved analyzing foreign markets for their potential size, accessibility, cost of operations, and buyer needs and practices to aid the company in deciding whether to invest in entering that market.
International market due diligence
____ refers to work that is contracted to a nondomestic third party.
International outsourcing
Which of the following statements is true about the European Council?
It collectively functions as the European Union's "Head of State."
Which of the following statements is true about MERCOSUR?
It is a South American trade initiative with clear political goals.
Which international expansion entry mode has high costs and integration issues with home office?
JV's, mergers, accusation (greenfield)
____ refers to the granting of permission by the licenser to the licensee to use intellectual property rights, such as trademarks, patents, brand names, or technology, under defined conditions
Licensing
What are the criticisms of NAFTA?
Loss of US manufacturing jobs contains weakly enforced environmental standards Labor leaders are scared that manufacturers are taking advantage of lower wages
What is the world's third largest trading bloc?
MERCOSUR
_____ involves analyzing markets for their potential size, accessibility, cost of operations, and buyer needs and practices to aid the company in deciding whether to invest in entering that market.
Market due diligence
____ refers to the combining of two companies into a new entity
Mergers
Which country has benefited the most from NAFTA?
Mexico
What is the criticism of MERCOSUR?
Much of the dynamism in the region coming from individual members global trade networks and not intra-regional trade
____ maximizes local responsiveness by giving decentralized decision making-authority to local business units in each country so that they can create products and services optimized to their local markets
Multidomestic strategy
What is an example of a Free-trade area?
NAFTA
Which agreement would ensure that cheap Asian manufacturers wouldn't negotiate lower tariffs with another member country, and dump cheap products into another member country?
NAFTA
Which regional trade agreement is was signed by Canada, Mexico, and the United States?
North American Free Trade Agreement (NAFTA)
____ occurs when a function is taken out of one's country of residence to be performed in another country, generally at a lower cost
Offshoring
_____ is a widely used tool that helps show the big picture of a firm's external environment, particularly as related to foreign market
PESTEL
What is the important and widely used tool that helps present the big picture of firm's external environment in political, economic, sociocultural, technological, environmental, and legal context
PESTEL analysis
____ refers to the acronym for planning, organizing, leading, and controlling, the framework used to determine and communicate the relationship between strategy formulation and strategy implementation
POLC
Taking ______ analyst into consideration, the firm's management then determines how the strategy will be implemented in regard to organization, leadership, and controls
SWOT
Local languages, the dominant religions, views toward leisure time, and the age and lifespan demographics the ____ factors that significantly influence business.
Sociocultural
___ refers to the central, integrated, externally oriented concept of how a firm will achieve its objectives
Strategy
What has GATT been credited with accomplishing?
Substantially expanding global trade, primarily though the reduction of tariffs
What was the primary goal for the development of the European Union (EU)?
To create a larger trading platform to compete against the United States, China, and India
Which agreement in the WTO seeks to protect intellectual property between countries?
Trade Related Aspects of Intellectual Property Rights (TRIPS)
Which of the following is a pro of creating a regional trade agreement?
Trade creation
What are the pros of creating regional agreements?
Trade creation, employment opportunities, market efficiency, and consensus and cooperation
_____ refers to the forces of change whose direction and sometimes timing can be predicted
Trend
T or F: A PESTEL analysis analyzes market growth or decline as well as the position, potential, and direction for a business
True
T or F: A PESTEL analysis helps managers gain a better understanding of the opportunities and threats they face
True
T or F: A greenfield venture has the most potential to provide above-average returns.
True
T or F: An organization, when it is expanding in a foreign country, enters it through a domestic partner. This would improve the chances of success for the organization.
True
T or F: Arenas refer to the specific geographic markets and the channels and value chain activities in those markets
True
T or F: Corporate strategy addresses in what business should we compete
True
T or F: Decisions must be made early in selecting differentiators
True
T or F: Differentiators refers to how being international differentiates the organization from competitors, makes products or services more attractive to future customers, and strengthens the effectiveness of the differentiators in the chosen area
True
Which of the following questions would help an organization determine the favorability of the technological factors for the business expansion in a PESTEL analysis?
What is the status of the intellectual property issues in the local environment?
In a strategy diamond, what does staging evaluate?
What will be out speed and sequence of moves
In the strategy diamond, what do arenas evaluate?
Where we will be active
When is value delivered to customers?
a firm is able to use a competitive advantage resulting from integration of activities
A film studio produces a movie whose storyline is borrowed from a book. The film producer had not received permission from the book's author to portray the contents of the book in the movie. This act of the movie producer is:
a violation of the intellectual rights of the author
A(n) ____ is a transaction in which a firm gains control of another firm by purchasing its stock, exchanging its stock for its own, or, in the case of a private firm, paying the owners a purchase price
acquisition
____ refers to a firm gaining control of another firm's assets or stock, typically by purchasing its stock, exchanging stock, or in th case of a private firm, paying the owners a purchase price
acquisition
What was the WTO designed to be?
actual institution charged with the mission of promoting free and fair trade
Which of the following is affected by absence of shared monetary or political association and political hostility in the CAGE framework?
administrative
Which of the following is affected by government policies and institutional weaknesses in the CAGE framework?
adminsitrative
What is the third step in PESTEL?
analyze the data draw and draw conclusions
Which part of the strategy diamond does it clearly tell managers what the firm should do and not do, answer questions about business strategy and summarize corporate strategy?
arenas
____ refers to the facet of the strategy diamond that identifies the areas in which a firm will be active, such as industry segments, georpgraphic markets, and channel segments (value chain)
arenas
What is a way for international expansion that is achieved through a company purchasing or leasing an existing facility typically through a merger of acquisition?
brownfield investment
Which strategy addressees how we should compete?
business strategy
What is the advantage of a multination firm when licensing?
company's products will be manufactured and made available for sale in the foreign country where the product is licensed
What is the first step in PESTEL?
consider the relevance of each PESTEL factors to your context
What is MERCOSUR committed to?
consultation of democracy and the maintenance of peace throughout the southern cone
the degree to which the company's existing practices, resources, and capabilities fit the new market
corporate fit
Which strategy is concerned with in which business should compete?
corporate strategy
In which business level strategy would a firm examine its logistic activities (sourcing, procurement, materials handling, ect...) to reduce costs
cost leadership
Which business level strategy would a firm build large scale operation that help them reduce the cost of each unit, eliminating extra features in their products or services, reducing their marketing costs, and finding low-cost sources, materials, and labor
cost leadership
In which strategy do firms seek to make their products or services at the lowest cost possible relative to their competitors while maintaining a quality that is acceptable to consumers
cost-leadership strategy
Which of the following industry is affected by products with high linguistic content such as TV or internet in the CAGE framework?
cultural
Which of the following is affected by cultural or national identity of consumers in the CAGE framework?
cultural
Which of the following is affected by different ethnicities and lack of social or connective ethnic networks in the CAGE framework?
cultural
Which of the following is affected by different languages in the CAGE framework?
cultural
Which of the following is affected by different social norms in the CAGE framework?
cultural
Which of the following is affected by product variance in size, standards or packaging such as cars or electrical appliances in the CAGE framework?
cultural
The purpose of the European Parliament is to:
debate and amend legislation proposed by the European Commission.
What is the first critical factor in selecting key differentiators?
decisions must be made early
What does a multi domestic strategy assume abbot the marker?
differen and therefore segmented by country boundary
In which business level strategy would the company examine all activities to identify way to create a higher value for the customer such as making the product easier to use, offering training, or by bundling with a different product or service
differentiation
_____ is an integrated set of actions designed by a firm to product or deliver goods or services (at an acceptable costs) that customers perceive as being different in ways that are important to them
differentiation
____ refers to facet or the strategy diamond that compromises features and attributed of a company's p or s the help it beat its competitor in a market place
differentiators
Export intermediaries who represent the company in a foreign market
distributors
What is the second critical factor in selecting key differentiators?
making tough choices and trade offs
What is the low-investment production strategy where a product is made at the company's existing manufacturing locations and then export to the new market?
manufacturer in the home country then export
Which pro of regional agreements increased the competition among manufactures within participating countries and the removal of trade barriers drove down prices and and enhance consumption?
market efficiency
What are the factors that reveal whether an indsutry has globalized or is in the processs?
markets, costs, governments, and competition
What is the major difference between a Free Trade Zone and a Customs Union?
members agree to treat trade with non member countries in a similar manner
An organizations statement of purpose that describes who the company is and what is does
mission statement
Which statement is the "purpose for being"
mission statement
_____ refers to an organization's statement of purpose or, "social contract," that describes who the company is and what it does.
mission statement
What are the two ways a firm can increase its horizontal scope
moving an industry market segment into another related segment and moving one industry into another (diversification )
Which international strategy faces more uncertainty and cannot take advantage of economies of scale?
multi domestic strategy
The CAGE framework can shed light on ______ from different countries.
multinationals
At its heart are the WTO agreements _____.
negotiated and signed by the bulk of the world's trading notions and ratified in their parliaments
Firms export mostly to countries that are close to their facilities because:
of lower transportation costs
Taking some business function out of the company's country of origin to be performed in another country, generally at lower cost
offshoring
_____ means setting up operations in a low cost country for the purpose of hiring local workers at lower labor rates
offshoring
If the world were flat:
one could sell the same products and services in the same way in every country
What asses the external attractive factors that represent the reason for a business to exist and prosper?
opportunities
Which of the following refers to the shared principles, standards, and goals of an organization that are included in the mission statement or as a separate statement?
organizational values
the shared principles, standards, and goals that are included in the mission statement or as a separate statement
organizational values
In which process would a vendor take control of operation and run the operations as they see fit and the company pays the vendor for the end result
outsourcing
contracting with a third party to dome of a company's work on its behalf.
outsourcing
Which international expansion entry mode has higher cost than exporting licensing or franchising and there are integration problems between two corporate cultures?
partnering and strategic alliance
Strategy implementation is the process of:
performing all the activities necessary to do what has been planned
_____ is the function of management that involves setting objectives and determining a course of action for achieving these objectives.
planning
Government policies of foreign trade regulation and taxation constitute the factors that have a significant influence on business.
political
The creation of regional trade agreements do not lead to:
political and economic centralization
Institutional differences refer to differences in the:
political systems of two countries
What is strategy formulation?
process of deciding what to do
Maquiladoras refer to the:
production facilities located in border towns in Mexico that take imported materials and produce the finished goods for export, primarily to Canada or the United States.
Transferring operational expenses related to staffing and overhead to the outsourcing entity will....
reduce costs
In Free-Trade area, member countries do what to trade barriers between themselves?
remove all
The range of the value chain activities in which a firm is engaged, including the group of product and customer segments served an the array of geographic markets in which the competes
scope
The trade meetings of GATT were called rounds in reference to the:
series of meetings among global peers held at a "roundtable"
_____ refers to the facet of the strategy diamond that refers to the timing and speed of strategic moves
staging and pacing
What is another name for strategy formulation?
strategizing
_____ refers to the constellation of business, corporate, and international strategy elements, which managers must consider when making decisions
strategy diamond
____ refers to the process of performing all the activities necessary to do what has been planned (deciding what to do)
strategy implementation
How can you use your strengths to take advantage of the opportunities?
strengths and opportunities (SO)
How can you take advantage of your strengths and avoid real and potential threats?
strengths and threats (ST)
When would a multi domestic strategy be appropriate for the market?
substantially unique local market
____ refers to the planning and management of all activities involved in sourcing and procurement, conversion, and logistics
supply chain management
What is one of the primary sets of activities in a cost leadership strategy?
supply chain management and logistics
____ refers to a situation where an organization's strengths and weaknesses cannot be easily duplicated or imitated by other firms nor made redundant of less valuable by changes in the external environment
sustainable competitive advatange
____ refers to a country that has a very advantageous (low) corporate income tax.
tax haven
National deficit refers to:
the amount of borrowing that a country does from either the private sector or other countries.
Vehicles refer to:
the means for participating in targeted arenas.
Why was GATT created?
to promote economic recover by reducing international trade barriers and to promote peace
Which pro of regional agreements create more opportunities for countries to trade with one another by removing the barriers to trade and investment
trade creation
What are the cons of creating regional agreements?
trade diversion, employment shifts & reduction, interdependence, and loss of national sovereignty
____ an international strategy that combines firm-wide operating efficiencies and core competences with local responsiveness tailored to different country circumstances and needs
transnational
Where does a multi domestic strategy focus on competition?
within each country and maximizes local responsiveness
What is the primary advantage of a common market?
workers do not need a visa or work permit to work in another member country