ch 10
A country's natural, human, and other resources can be expressed in terms of ______.
factor conditions
The benefits of competing on a global scale exist ______.
for an increasing number of firms
Which of the following have helped make globalization possible?
Falling trade barriers Advances in telecommunications Reductions in transportation costs
When companies face a highly competitive environment at home, they are more likely to ______.
outperform global competition that lacks such intense domestic competition
In ______ societies, competitiveness, assertiveness, and the exercise of power are considered ideal.
masculine
Which of the following are among the primary considerations when determining the mode in which a firm enters a foreign market?
the desired level of control over foreign operations the degree of investment
The decision framework that is based on the relative distance between home and a foreign target country is the ______.
CAGE distance framework
Multinational enterprises that manufacture commodity products that focus on cost leadership tend to use a(n) ______ strategy.
global-standardization
Which of the following dimensions are considered in the CAGE distance framework? (Check all that apply.)
cultural distance geographic distance economic distance
Which of the following factors helped make Germany, which was a tough environment for a car company, conducive to successful car companies?
demanding customers no-speed-limit autobahn fierce domestic competition
If a firm's goal is to leverage home-based core competencies in foreign markets, it should pursue a(n) ______ strategy.
international
Benicio's Burritos is a leader in the Mexican fast-food category in the United States. It decides to expand internationally, starting in Japan. Benicio's Burritos fails within a year, learning later that Mexican food is uncommon in Japan and that the flavor profiles are not compatible with Japanese palates. The failure of Benicio's Burritos can be attributed to which of the following?
liability of foreignness
The benefits to be accrued from locating value chain activities in the world's optimal geographies for a specific activity are known as_____________economies.
location
Despite a growing belief in the death-of-distance hypothesis, there remains evidence that certain countries remain leaders in specific industries and maintain a kind of ______ advantage.
national competitive
Gunther is transferred from the United States to Hong Kong for work. He notices that his colleagues at the new office, most of whom are Hong Kong natives, behave and communicate in a similar manner that is a striking contrast to what Gunther is accustomed to. Gunther is observing his colleagues' ______.
national culture
Which of the following helped motivate globalization after the end of World War II?
the need to reconstruct economies damaged by war unfilled needs during the war years
Which of the following are common reasons for companies to make foreign direct investments?
to avoid import restrictions to reduce labor costs to reduce tax burdens
When firms from wealthy countries trade with firms from poor countries, they benefit from economic _______.
arbitrage
Multinational enterprises need an effective global strategy in order to ______.
achieve a competitive advantage against other companies
Companies from wealthy countries benefit from cross-border trade with other wealthy countries when their competitive advantage is based on which of the following factors?
standardization economies of experience economies of scale
Which of the following is the most important determinant of economic distance?
wealth and per capita income
Which of the following risks do companies face when expanding internationally?
loss of reputation loss of intellectual property the liability of foreignness
Rising wages and other costs are likely to negate any benefits MNEs have of access to ______.
low-cost inputs
Which of the following are part of culture?
social mores beliefs social norms
A multinational enterprise would likely be motivated to pursue a global-standardization strategy in order to ______.
take advantage of economies of scale take advantage of location economies
All other things equal, the greater the cultural distance, ______.
the greater the liability of foreignness
Foreign direct investments are investments in ______.
value chain activities abroad
National culture, according to Geert Hofstede, can be defined as different groups' distinctive ______.
"programming of the mind"
Which country experienced rapid economic growth in the early 21st century and now challenges the United States for global economic supremacy?
China
Which of the following pressures opposes local responsiveness on the integration-responsiveness framework?
Cost reductions
What are the factors in Michael Porter's model of national competitiveness?
Demand conditions Related industries/complementors Factors conditions Competitive intensity in a focal industry
True or false: The benefits of local responsiveness always outweigh the costs.
False
For a U.S. company doing business internationally, which of the following would be examples of local responsiveness?
Ikea selling metal chopsticks in South Korea Walmart selling live animals for food preparation in China McDonald's selling teriyaki burgers in Japan
Which country has become a hub for MNEs seeking to outsource business processes such as IT and customer service due to an abundance of highly educated but low-cost labor?
India
Which of the following statements about pursuing international expansion is true?
It can enhance a firm's competitive advantage.
Which of the following statements about the CAGE distance framework is true?
It is designed to aid MNEs in deciding where to compete in the world.
Which of the following best defines national competitive advantage?
It is the extent to which a country can compete in international markets.
Which of the following are benefits of a transnational strategy?
It promotes global learning and the diffusion of best practices and innovations. It harnesses economies of scale
Though many benefits exist, which of the following are among the drawbacks of a transnational strategy?
It's difficult to implement. It requires implementing a complex organizational structure.
A multidomestic strategy is appropriate when which of the following conditions exist?
Markets in the host country are idiosyncratic. The firm faces high demand for local responsiveness. The firm feels little need to reduce costs.
Which of the following statements regarding factor conditions in Porter's diamond framework is true?
Natural resources are not necessarily needed to generate world-leading companies.
True or false: Multinational enterprises are the driving force behind globalization.
True
Calculating cultural distance involves comparing the cultures of which of the following?
a firm's home country a targeted host country
MNEs pursuing a________ ocean strategy tend to also pursue a transnational strategy.
blue
The specific characteristics of needs in a firm's domestic market, such as customers who hold companies to a high standard of value creation and cost containment, are also called ______.
demand conditions
The oldest form of internationalization is ______, which involves producing goods in one country to sell in another country
exporting
When looking at the modes of foreign-market entry, one could conclude that ______.
exporting might be the earliest stage of commitment because it allows the firm to test whether a foreign market is ready for its products
Porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and ______.
factor conditions
Before World War II, business strategy, implementation, and knowledge typically flowed ______.
from domestic headquarters to outposts abroad
A company's ______ is the part of a corporate strategy that addresses how to gain and sustain a competitive advantage when competing against other foreign and domestic companies around the world.
global strategy
Since expanding internationally, IKEA has shifted focus, concentrating on effectively managing a global supply chain in order to achieve economies of scale. This is reflective of a(n) ______ strategy.
global-standardization
During globalization 1.0 all important business functions were located in the home country, whereas during globalization 2.0 multinationals began to copy themselves _______.
in a few key countries
As the standard of living rises in emerging economies, MNEs are hoping that ______.
increased purchasing power will enable workers to purchase the products previously made only for export
Companies seek to access international markets as a means of ______.
increasing their economic value creation
Due to globalization, the world's market economies are becoming more ______.
integrated and interdependent
IKEA offers the same products in every market. This indicates that IKEA has followed a(n) ______ strategy.
international
Mount Mountain is a manufacturer of outdoor gear and apparel. It uses American sizing and standards for its apparel and gear across all markets. Which strategy is Mount Mountain adhering to?
international
Which of the following factors enabled India to gain a competitive advantage in business process outsourcing?
its well-educated, English-speaking workforce its low-cost labor
MNEs pursuing a multidomestic strategy hope that ______.
local consumers will perceive them to be a domestic company
The Japanese market is very particular, and MNEs tend to have a challenging time breaking into the market successfully. To provide the most local responsiveness and to influence Japanese consumers in believing that the products are local, an MNE should follow a(n) ______ strategy.
multidomestic
What are the four quadrants of the integration-responsiveness framework?
multidomestic strategy global standardization strategy transnational strategy international strategy
A company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries is a ______.
multinational enterprise
If the economic value creation of international expansion is negative, a firm should ______.
not expand internationally
When multinationals draw on multiple innovation hubs that all have equal status, they pursue a ______.
polycentric innovation strategy
When a country's demand conditions include high-density urban living and high energy costs, consumers can be expected to prefer air conditioners that are which of the following?
quiet energy-efficient small
When pursuing an international strategy, a company ______.
sells the same product in both domestic and foreign markets
Which of the following were black swan events that occurred in the early 21st century and helped reshape the global economy?
the Global financial crisis the European refugee crisis the European debt crisis
When a company has difficulty coordinating operations across geographic distance and between distinct culture environments, it experiences ______.
the liability of foreignness
A(n) ______ strategy focuses on integration at the business level by attempting to reconcile product differentiations at low cost.
transnational
The integration-responsiveness framework suggests that companies facing high pressure for both local responsiveness and cost reduction should follow a(n) ______ strategy.
transnational
The extent to which members of a society feel anxious when faced with an unknown situation is known as ______.
uncertainty avoidance
Which of the following helped motivate globalization after the end of World War II?
unfilled needs during the war years the need to reconstruct economies damaged by war
During the first stage of globalization, business functions that took place abroad were limited to which of the following?
distribution sales