Chapter 8 Starred

If conflict in a strategic alliance or joint venture is not manageable, a(n) _______may be a better option. a. licensing strategy b. exporting strategy c. acquisition d. new wholly-owned subsidiary

c. acquisition

Factors of production in Porter's model of international competitive advantage include all of the following EXCEPT a. labor. b. capital. c. infrastructure. d. technology.

d. technology.

Japan, due to a lack of undeveloped land, would be an unusual choice of location for a U.S. cattle company to set up local grazing operations. This limiting factor would be identified in what part of Porter's determinants of national advantage? a. Factors of production b. Demand conditions c. Related and supporting industries d. Firm strategy, structure and rivalry

a. Factors of production

Firms with core competencies that can be exploited across international markets are able to a. achieve synergies and produce high quality goods at lower costs. b. enter new markets more quickly. c. enhance their market image and brand loyalty among local consumers. d. meet local government requirements more quickly than their international competitors.

a. achieve synergies and produce high quality goods at lower costs

A global corporate-level strategy differs from a multidomestic corporate-level strategy in that in a global strategy, a. competitive strategy is dictated by the home office. b. competitive strategy is decentralized and controlled by individual strategic business units. c. products are customized to meet the individual needs of each country. d. the firm sells in multiple countries.

a. competitive strategy is dictated by the home office.

Arkadelphia Polymers, Inc., earns 60% of its revenue from exports to Europe and Asia. The CEO of the company would be a. concerned if the value of the dollar strengthened. b. pleased if the value of the dollar strengthened. c. unconcerned about the fluctuation in the value of the dollar because the company is widely diversified geographically. d. likely to consider moving to international strategic alliances or acquisitions if the value of the dollar fell and remained low.

a. concerned if the value of the dollar strengthened.

A fundamental reason for a country's development of advanced and specialized factors of production is often its a. lack of basic resources. b. monetary wealth. c. small workforce. d. protective tariffs.

a. lack of basic resources.

Haier is developing a global brand through extensive international diversification using the _____ corporate-level diversification strategy (Chapter 8 Strategic Focus). a. multidomestic b. global c. transnational d. licensing.

a. multidomestic

Which of the following is NOT a disadvantage associated with exporting? a. potential loss of proprietary technologies b. high transportation costs c. loss of control over distribution activities d. tariffs imposed by local governments

a. potential loss of proprietary technologies

Terrorism creates an economic risk for firms which a. reduces the amount of investment foreign companies will make in a country perceived to be terror-prone. b. is created by governmental bans on doing business with terrorist regimes. c. is offset by the above-average returns for firms which have learned how to operate in such an environment. d. is absorbed by firms which are highly geographically diversified and which operate in both secure and insecure locations.

a. reduces the amount of investment foreign companies will make in a country perceived to be terror-prone.

All of the following complicate the implementation of an international diversification strategy EXCEPT a. widespread multilingualism. b. increased costs of coordination between business units. c. cultural diversity. d. logistical costs.

a. widespread multilingualism.

When a firm INITIALLY becomes internationally diversified, its returns a. remain stable. b. decrease. c. become more variable. d. increase.

b. decrease.

A U.S. manufacturer of adaptive devices for persons with disabilities is considering expanding internationally. It is a fairly small company, but it is looking for growth opportunities. This company should primarily consider the option of a. licensing. b. exporting. c. a strategic alliance. d. a greenfield venture.

b. exporting.

The increased pressures for global integration of operations have been driven mostly by a. new low cost entrants. b. increasing demand for similar products. c. increased levels of joint ventures. d. the rise of governmental regulation.

b. increasing demand for similar products.

Most firms enter international markets sequentially, introducing their ____ first. a. most innovative products b. largest and strongest lines of business c. most generic products, which will be more likely to generate universal product demand, d. products customized to the region

b. largest and strongest lines of business

The positive results associated with increasing international diversification have been shown to a. continue as the level of international diversification increases. b. level off and become negative as diversification increases past some point. c. become negative quickly. d. be centered in only one or two industries.

b. level off and become negative as diversification increases past some point.

A multidomestic corporate-level strategy has ____ need for global integration and ____ need for local market responsiveness. a. low; low b. low; high c. high; low d. high; high

b. low; high

International strategy refers to a(an) a. action plan pursued by American companies to compete against foreign companies operating in the United States. b. strategy through which the firm sells products in markets outside the firm's domestic market. c. political and economic action plan developed by businesses and governments to cope with global competition. d. strategy American firms use to dominate international markets.

b. strategy through which the firm sells products in markets outside the firm's domestic market.

All of the following are international corporate-level strategies EXCEPT the ____ strategy. a. multidomestic b. universal c. global d. transnational

b. universal

If intellectual property rights in an emerging economy are not well-protected, the number of firms in the industry is rapidly growing, and the need for global integration is high, ____ is the preferred entry mode. a. exporting b. strategic alliance c. a joint venture or wholly-owned subsidiary d. licensing

c. a joint venture or wholly-owned subsidiary

Raymond Vernon states that the classic rationale for international diversification is to a. pre-emptively dominate world markets before foreign companies can establish dominance. b. avoid domestic governmental regulation. c. extend the product's life cycle. d. avoid international governmental regulation.

c. extend the product's life cycle.

A transnational corporate-level strategy seeks to achieve a. customization for the local market. b. economies of scale and centralized strategic control. c. global efficiency and local responsiveness. d. standardization of products across countries.

c. global efficiency and local responsiveness.

In addition to the four basic dimensions of Porter's "diamond" model, ____ may also contribute to the success or failure of firms. a. national work ethic b. educational requirements c. government policy d. national pride

c. government policy

Under industry structural analysis (Chapter 2), ____ rivalry is viewed as detrimental to profitability. Under the model of national advantage (Chapter 8), ____ rivalry is viewed as ____ as it results in competition and surviving firms are able to compete against global rivals. a. low; low; beneficial b. low; low; detrimental c. high; high; beneficial d. high; high; detrimental

c. high; high; beneficial

The Chapter 8 Opening Case indicates that main basic benefit that Starbucks derives from its international strategies is a. economies of scale and learning b. location advantages c. increased market size d. extending the product life cycle

c. increased market size

Associations such as the European Union, Organization of American States, and the North American Free Trade Association, encourage a. global strategies. b. domestication. c. regional strategies. d. nationalization.

c. regional strategies.

A firm may narrow its focus to a specific region of the world a. because that market is most different from its domestic market and so represents an unexploited "greenfield opportunity" for its products. b. in order to obtain greater economies of scale. c. so that it can better understand the cultures, legal and social norms, and other factors that are important for effective competition in those markets. d. to take advantage of limited protections of intellectual property so that it can manufacture innovative products without restrictions.

c. so that it can better understand the cultures, legal and social norms, and other factors that are important for effective competition in those markets.

A multidomestic corporate-level strategy is one in which a. a corporation chooses not to compete internationally but where there are a number of international competitors in the firm's local marketplace. b. the firm produces a standardized product, but markets it differently in each country in which it competes. c. the firm customizes the product for each country in which it competes. d. the firm competes in a number of countries, but it is centrally coordinated by the home office.

c. the firm customizes the product for each country in which it competes.

Which of the following is an advantage associated with greenfield ventures? a. governmental support and subsidies in the host country b. the lower cost of this type of venture c. the level of control over the firm's operations d. the lower level of risks involved

c. the level of control over the firm's operations

Disney suffered lawsuits in France at Disneyland Paris as a result of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of a. the effects of regionalization. b. the risks of a multidomestic strategy. c. the liability of foreignness. d. the effect of demand conditions.

c. the liability of foreignness.

_______________________ is the set of costs associated with unfamiliar operating environments; economic, administrative and cultural differences; and the challenges of coordination over distances. a. transnational risk b. regionalization c. liability of foreignness d. international risk

c. the liability of foreignness.

Bunyan Heavy Equipment, a U.S. firm, is investigating expanding into Russia using a greenfield venture. The committee researching this project has delivered a negative report. The MAIN concern of the committee is probably a. loss of intellectual property due to Russian piracy. b. the fluctuation in the value of the ruble. c. the numerous and conflicting legal authorities in Russia. d. Russia's recent actions to gain state control of private firms' assets.

d. Russia's recent actions to gain state control of private firms' assets.

In Porter's model, if a country has both ________ and __________ production factors, it is likely to serve an industry well by spawning strong home-country competitors that can also be successful global competitors. a. basic; advanced b. advanced; generalized c. basic; generalized d. advanced; specialized

d. advanced; specialized

Which of the following is NOT a factor pressuring companies for local responsiveness? a. differences in employment laws b. customization due to cultural differences c. government pressure for firms to use local sources for procurement d. availability of low labor costs

d. availability of low labor costs

The location advantages associated with locating facilities in other countries can include all of the following EXCEPT a. low-cost labor. b. access to critical supplies. c. access to customers. d. evasion of host country governmental regulations.

d. evasion of host country governmental regulations.

The means of entry into international markets that offers the greatest control is a. licensing. b. acquisitions. c. joint ventures. d. greenfield ventures.

d. greenfield ventures.

Which of the following is NOT a typical disadvantage of licensing? a. little control over the marketing of the products b. licensees may develop a competitive product after the license expires c. lower potential returns than the use of exporting or strategic alliances d. incompatibility of the licensing partners

d. incompatibility of the licensing partners

A nation's competitiveness depends on the capacity of its industries to ____ and thereby maintain its competitive advantage. a. diversify internationally b. have access to critical resources c. protect its proprietary capabilities d. innovate

d. innovate

A global strategy a. is easy to manage because of common operating decisions across borders. b. achieves efficient operations without sharing resources across country boundaries. c. increases risk because decision-making is centralized at the home office. d. lacks responsiveness to local markets.

d. lacks responsiveness to local markets.

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are _________ and ____________. a. culture; geographic scope b. cost; quality c. regionalization; globalization d. liability of foreignness; regionalization

d. liability of foreignness; regionalization

Which international corporate-level strategy strategy does Starbucks use? (Chapter 8 Opening Case) a. global b. multidomestic c. licensing d. transnational

d. transnational

Effectively implementing the ________ international corporate-level strategy often produces higher performance than does implementing either the _______ or _________ strategies . a. multidomestic; global; transnational b. global; multidomestic; transnational c. cost leadership; differentation; focus d. transnational; multidomestic; global

d. transnational; multidomestic; global