Connect Chapter 7 Quiz 70/100

Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following, except

Customer needs, interest, and tastes becoming increasingly similar

T/F. A multidomestic strategy is the most appropriate strategy for international operations because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeals to the smallest number of consumers in every market.

False

T/F. Exporting is an expensive way to enter domestic markets.

False

T/F. One of the challenges with globalization is determining how to meet the needs of customers at the same income level.

False

T/F. Trading blocs and free trade zones promote the rise of regional expansion.

False

T/F. Typically, joint ventures involve more control and risk than franchising.

False

t/f. The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments; demand conditions; related and non-supporting industries; and firm strategy, structure, and rivalry.

False

Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with no pressure for local adaptation?

International Strategy

Which of the following is not a motivation for a company to pursue international expansion?

It wishes to decrease foreign market penetration by developing products for the home market

Multinational firms are constantly faced with the dilemma of choosing between ________ and ________.

Local Adaptation, Global Integration

Which of the following is not a risk associated with a global strategy?

The pressure for local

T/F. Expanding the global presence of a firm automatically increases its scale of operations.

True

T/F. Offshoring takes place when a firm decides to shift an activity that they were previously performing in a foreign location to a domestic location.

True

T/F. One of the challenges with globalization is determining how to meet the needs of customers at very different income levels.

True

Industries in which proportionally more value is added in ________ activities, such as logistics, are more likely to benefit from a global strategy.

Upstream

Elements of a multidomestic strategy may facilitate the competitive advantage of ________ by decreasing shipping and transportation costs inherent in local production.

centralization

Which of the following is not a reason for the rise in regional expansion?

increase in the number of trading blocs and free trade zones

Airbus decided to build production capacity in China by manufacturing airplanes and working with many Chinese suppliers. What is the biggest risk the company faces with this decision?

lower international sales

The form of entry strategy into international operations that offers the ________ level of control for the domestic corporation would be exporting.

lowest

When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies should choose a ________ or ________ in order to compete in the global marketplace.

transitional strategy, global strategy