BUS 187 Quizzes 12-16

Which of the following is an advantage of franchising?

A firm is relieved of many of the costs and risks of opening a foreign market on its own.

Which of the following statements is true of turnkey projects?

A turnkey strategy is particularly useless where FDI is limited by host-government regulations

Which of the following is the most common approach to expatriate pay?

Balance sheet approach

_____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.

Experience curve

A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia.

False

A small-scale entrant is more likely than a large-scale entrant to capture first-mover advantages associated with demand preemption, scale economies, and switching costs.

False

Decentralized production is favored if differences between countries in factor costs have a substantial impact on the costs of manufacturing in various countries.

False

A(n) _____ seeks the best people for key jobs throughout the organization, regardless of nationality.

Geocentric staffing policy

When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a(n) _____ strategy.

Global standardization

Before a firm is allowed access to the European marketplace, the European Union requires that the quality of the firm's manufacturing processes and products be certified under a quality standard known as _____.

ISO 9000

Identify an advantage of adopting a low minimum efficient scale.

It allows the firm to accommodate demands for local responsiveness

What is the primary advantage of licensing?

It helps a firm avoid the development costs associated with opening a foreign market

A firm benefits by basing each value creation activity it performs at that location where economic, political, and cultural conditions, including relative factor costs, are most conducive to the performance of that activity. Firms that pursue such a strategy can realize:

Location economies

_____ activities are basically concerned with creating the product, marketing and delivering the product to buyers, and providing support and after-sales service.

Primary

When a firm emphasizes personal selling rather than mass media advertising in the promotional mix, the firm is using a:

Push strategy

_____ refer to cooperative agreements between potential or actual competitors.

Strategic alliance

A firm with an ethnocentric staffing policy will fill all key management positions with parent-country nationals.

True

A firm's performance appraisal systems are an important element of its control systems.

True

A firm's strategy can be defined as the actions that managers take to attain the goals of the firm

True

According to Porter, the way to create superior value is to drive down the cost of structure of the business and/or differentiate the product in some way so that consumers value it more

True

An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.

True

Countries with fragmented retail systems tend to have long channels of distribution.

True

Firms that sell industrial products or other complex products favor a push strategy.

True

First-mover advantages are the advantages associated with entering a market early.

True

In a concentrated retail system, a few retailers supply most of the market

True

Just-in-time systems are used to economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process and not before.

True

Lowering the costs is one of the objectives of the production and logistics function of an international firm.

True

Make-or-buy decisions are decisions about whether companies should perform a certain value creation activity themselves or outsource it to another entity.

True

Poor product quality and low productivity are hidden costs associated with basing production in a foreign location.

True

The number of intermediaries between the producer and the consumer is known as the channel length.

True

Unions' bargaining power is largely derived from their ability to threaten to disrupt production

True

When companies disperse different stages of the value chain to those locations around the world where perceived value is maximized or where the costs of value creation are minimized, companies create:

a global web of value creation activites

Practical training is:

aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country.

Responding to pressure for _____ requires that a firm differentiate its product offering and marketing strategy from country to country.

being locally responsive

Many firms pursuing a(n) ____ pricing strategy on an international scale will price low worldwide in attempting to build global sales volume as rapidly as possible, even if this means taking large losses initially.

experience curve

A firm can establish a wholly-owned subsidiary in a country by building a subsidiary from the ground up, called the ____.

greenfield strategy

When evaluating expatriates, home-country managers usually rely on:

hard data such as market share.

Economies of scale arise from all of the following sources, EXCEPT:

increased fixed costs by limiting them to small volumes

The Six Sigma methodology _____.

is a direct descendant of the total quality management philosophy

When a channel is exclusive:

it is often difficult for a new firm to get access to shelf space in supermarkets.

When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through:

learning effects

Research has long maintained that a major factor of success for new products is the closeness of the relationship between:

marketing and R&D

Central to the concept of economies of scale is the idea that the best way to achieve high efficiency, and hence low unit costs, is through the _____.

mass production of a standardized output

The costs of promoting and establishing a product offering when a firm enters a foreign market prior to its rivals are known as ____.

pioneering costs

When a company charges whatever the market will bear, the company is using:

price discrimination

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

produce the produce in multiple locations close to major markets

When the receiver of a message evaluates a message based on the status or image of the sender, ____ are said to have occurred.

source effects

A foreign service premium is:

the extra pay that an expatriate receives for working outside his or her country of origin.

If a high-tech firm sets up operations in a foreign country to profit from a core competency in technological know-how, which of the following entry strategy is best?

wholly owned subsidiary

In a ____, the firm owns 100 percent of the stock.

wholly owned subsidiary