Mgmt Ch 8 Multiple Choice

The positive results associated with increasing international diversification have been shown to

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

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are _________ and _____

liability of foreignness; regionalization.

U.S. cola companies entered the global market because of

limited growth opportunities in their domestic market.

a multidomestic corporate-level strategy has ______ need for global integration and _____ need for local market responsiveness

low, high

98. A global corporate-level strategy assumes a. efficiency and customization can be achieved simultaneously. b. a rise in income levels across the world. c. increasing levels of cultural differences among nations. d. more standardization of products across country markets.

more standardized of products across country markets

74. Working in multiple international markets can provide firms with perhaps even in terms of

new learning opportunities; research and development activities

The four aspects of Porter's model of international competitive advantage include all of the following EXCEPT factors of production demand conditions political and economic institutions related and supporting industries

political and economic institutions

Most firms enter international markets sequentially, introducing their first.

largest and strongest lines of business

Firms able to standarize the processes used to produce, sell, distribute, and service their products across country borders enhance their ability to

learn how to continuously reduce costs while increase the value of their products

The choices that a firm has for entering the international market include all of the following EXCEPT

leasing

is the set of costs associated with unfamiliar operating environments; economic, administrative and cultural differences; and the challenges of coordination over distances.

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

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

Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ greatly from its home market, instead expanding within the twelve-nation region that includes its home country.

The firm is using a regional approach to international expansion.

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 joint venture or wholly owned subsidiary

Firms with core competencies that can be exploited across international markets are able to

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

If a conflict in a strategic alliance or joint venture is not manageable, a(n) may be a better option.

acquisition

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.

advanced; specialized

73. Moving into international markets is a particularly attractive strategy to firms whose domestic markets

are limited in opportunities for growth

Which of the following is NOT a factor pressuring companies for local responsiveness?

availability of low labor costs

A licensing agreement

c. allows a foreign firm to purchase the rights to manufacture and sell a firm's products within a host country.

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.

lacks responsiveness to local markets

All of the following are correct about what managers should know about firms based in a country with a national competitive advantage EXCEPT a. success is not guaranteed as the firm implements its chosen international business-level strategy. b. the actual strategic choices made are most compelling reasons for success or failure. c. success is guaranteed as the firm implements its chosen international business-level strategy. d. the determinants of national competitive advantage provide a foundation for a firm's competitive advantages.

c. success is guaranteed as the firm implements its chosen international business-level strategy.

The decision of what entry mode to use is primarily based on all of the following factors EXCEPT a. the industry's competitive conditions. b. the country's situation and government policies. c. the worldwide economic situation. d. the firm's unique set of resources, capabilities, and core competencies.

c. the worldwide economic situation.

Which of the following is NOT an incentive for firms to become multinational? a. to gain access to consumers in emerging markets b. to gain easier access to raw materials c. to avoid high domestic taxation on corporate income d. opportunities to integrate operations on a global scale

c. to avoid high domestic taxation on corporate income

A global corporate-level strategy differs from a multidomestic corporate-level strategy in that in a global strategy,

competitive strategy is dictated by the home office.

Arkadelphia Polymers, Inc., earns 60 percent of its revenue from exports to Europe and Asia. The CEO of the company would be

concerned if the value of the dollar strengthened

U.S. companies moving into the international market need to be sensitive to the need for local country or regional responsiveness because of

consumer needs, political, and legal structures, and social norms vary by country

Which of the following is NOT a disadvantage of international acquisitions? a. They are very expensive and often require debt financing. b. The acquiring firm has to deal with the regulatory requirements of a host country. c. Merging the acquired and acquiring firm is difficult. d. It is the slowest way to enter a new market.

d. It is the slowest way to enter a new market.

The benefits of expanding into international markets include each of the following opportunities EXCEPT a. increasing the size of the firm's potential markets. b. economies of scale and learning. c. location advantages. d. favorable tax concessions and economic incentives by home-country governments.

d. favorable tax concessions and economic incentives by home-country governments.

All of the following are reasons why firms use international strategic alliances EXCEPT a. sharing of risks and resources. b. alliances facilitate the development of new capabilities. c. learning new competencies particularly those related to technology. d. strategic alliances are easy to manage.

d. strategic alliances are easy to manage.

When a firm INITIALLY becomes internationally diversified, its returns

decrease

Internationally diversified firms

earn greater returns on their innovations through larger or more numerous markets.

A global corporate-level strategy emphasizes

economies of scale

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

evasion of host country governmental regulations

An international diversification strategy is one in which a firm

expands into a potentially large number of geographic locations and markets

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

exporting

Raymond Vernon states that the classic rationale for international diversification is to

extent the product's life cycle

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?

factors of production

A transnational corporate-level strategy seeks to achieve

global efficiency and local responsiveness

In addition to the four basic dimensions of Porter's "diamond" model, failure of firms.

government policy

The means of entry into international markets that offers the greatest control is

greenfield ventures

The problems associated with exporting include

high transportation costs and the expense of tariffs.

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.

high; high; beneficial

Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model? Japanese cameras and copiers Italian leather processing and shoes U.S. computers and software highway systems and the supply of debt capital

highway systems and the supply of debt capital

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

incompatibility of the licensing partners

The increased pressures for global integration of operations have been driven mostly by?

increasing demand for similar products

A nation's competitiveness depends on the capacity of its industries to ______ and thereby maintain its competitive advantage.

innovate

The transnational strategy is becoming increasingly necessary to compete in international markets for all the following reasons EXCEPT a. the growing number of competitors heightens the requirements to keep costs down. b. the desire for specialized products to meet consumers' needs. c. differences in culture and institutional environments also require firms to adapt their products and approaches to local environments. d, it is easy to use

it is easy to use

82. A fundamental reason for a country's development of advanced and specialized factors of production is often its

lack of basic resources.

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

potential loss of proprietary technologies

Terrorism creates an economic risk for firms, which

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

Associations such as the European Union, Organization of American States, and the North American Free Trade association, encourage

regional strategies

In France, fine dressmaking and tailoring have been a tradition predating Queen Marie Antoinette. Cloth manufacturers, design schools, craft apprenticeship programs, modeling agencies, and so forth, all exist to supply the clothing industry. This is an example of the in Porter's model.

related and supporting industries

A firm may narrow its focus to a specific region of the world

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

International strategy refers to a(n)

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

Factors of production in Porter's model of international competitive advantage include all of the following EXCEPT labor capital, infrastructure technology

technology

A multidomestic corporate-level strategy is one in which

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

One of the primary reasons for failure of cross-border strategic alliances is

the incompatibility of the partners.

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

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

the liability of foreignness.

International corporate-level strategy focuses on

the scope of operations through both product and geographic diversification

A large domestic market can provide the country's industries a chance at dominating the world market because

they have been able to develop economies of scale at home.

In China, Starbucks is standardizing its operations while simultaneously decentralizing some decision-making responsibilities to local levels to meet customers' tastes. Starbucks is following the ______ international corporate-level strategy.

transnational

Increasingly, customers worldwide are demanding emphasis on local requirements and companies are needing efficiency as global competition increases. This has triggered an increase in the number of firms using the _______ strategy.

transnational

Effectively implementing the ________ international corporate-level strategy often produces higher performance than does implementing either the _______ or _________ strategies.

transnational; multidomestic; global

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

universal

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.

widespread multilingualism.

In Porter's model, a specialized factor of production would include

workers with advanced engineering skills