Quiz 7 Strategic Management
Which of the following is not a typical option that companies have to consider in order to tailor their strategy to fit the circumstances of developing country markets?
Develop new sets of core competencies that allow a company to offer value to consumers of emerging markets in ways unmatched by rivals.
Which one of the following statements concerning the impact of fluctuating exchange rates on companies competing in foreign markets is not true?
Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.
Véronique is the CEO of a wind power energy company headquartered in Toulouse, France. Identify which company model she would emulate to craft a multidomestic strategy.
Headquartered in Liverpool, England, Castrol produces over 3,000 different formulas of oil lubricants to meet the requirements of different climates, vehicle types and uses, and equipment applications that characterize different country markets.
Which of the following statements about entering developing markets such as China, India, Russia, and Brazil is correct?
Observing and following the lead of local competitors is the sole guarantee of success in developing markets. Entering an emerging market should always involve a best-cost strategy. Standardized products are typically more successful in emerging country markets. Profitability always comes quickly to entrants into developing markets because of global branding.
Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous
Two answers are correct: when high transportation costs make it expensive to operate from central locations; and whenever buyer-related activities are best performed in locations close to buyers.
The advantages of manufacturing goods in a particular country and exporting them to foreign markets
are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.
The multidomestic strategy of "think local, act local"
becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.
Using domestic plants as a production base for exporting goods to selected foreign country markets
can be an excellent initial strategy to pursue international sales.
In order to use location to build competitive advantage when competing on domestic and international level, a company must
consider (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations, and (2) determine in which countries it should locate particular activities.
A "think global, act global" approach to strategy making is preferable to a "think local, act local" approach when
country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy.
Which of the following is the biggest strategic issue when competing in the markets of foreign countries?
determining whether to standardize or customize the company's offerings.
A "think local, act local" multidomestic type of strategy
focuses on varying a company's product offering and competitive approach from country to country in an effort to be responsive to significant cross-country differences.
Social media giant Facebook Inc. decided to expand outside its home U.S. market in order to
gain access to new customers for the company's products/services.
The primary reasons that companies opt to expand into foreign markets are to
gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.
The advantages of using a franchising strategy to pursue opportunities in foreign markets include
having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchiser to expend only the resources to recruit, train, and support foreign franchisees.
The chief difference between a "think global, act global" and a "think global, act local" approach to crafting a global strategy is that
local managers are given more latitude in adapting the global strategy approach as may be needed to accommodate local buyer preferences and be responsive to local market and competitive conditions.
Which of the following is not an advantage of utilizing a licensing strategy to participate in foreign markets?
the ability to safeguard the company's technical know-how or patents
Multinational competitors tend to concentrate activities in a limited number of locations when
there are significant scale economies and/or steep learning curve effects associated with performing certain activities in a single location, costs of performing the activity are lower in particular geographic locations, and certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages.
Companies tend to concentrate their activities in a limited number of locations
when there is a steep learning curve associated with performing an activity.
One of the biggest strategic challenges to competing in the international arena is
whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the tastes and preferences of local buyers.