Exam 8: Strategy in the Global Environment

When a company performs a value creation activity in a region that is optimal for that activity, wherever in the world that might be, it is trying to capitalize on:

Identify and discuss the general ways in which companies can increase their profitability and profit growth through global expansion.

In order to achieve a competitive advantage in certain countries and certain industries using factor endowments, a company needs to have which of the following?

WKL Entertainment Inc. is a service-based firm with very few competitors. The company is looking to sell the same basic product services in different nations and charge a relatively high price for it. WKL does not face direct competitors, so the company does not have to deal with strong pressures to minimize its costs. Which of the following strategies should WKL Entertainment Inc. managers pursue?

Which of the following strategies is represented by McDonald's experimenting with their traditional menu, as well as changing the layout and theme of restaurants in foreign locations?

Which of the following environments are optimal for a localization strategy?

The upside of using a localization strategy is that a company can charge a higher price because the value achieved by local customization and greater local demand allows the company to reduce costs by attaining scale economies in the local market.

Which of the following is responsible for the emergence of enormous global markets for standardized consumer products such as McDonald's hamburgers, Coca-Cola, and GAP clothes?

Location economies refer to the economic benefits that arise from performing a value creation activity at an optimal location.

Which of the following statements is true about global standardization strategy?

Which of the following statements is true about international strategy?

Which of the following factors increases pressures for local responsiveness?

Most manufacturing companies begin their global expansion by exporting.

Starbucks, Sony, and Coca-Cola conduct business in two or more countries. These companies can be referred to as multinational companies.

Pressures for cost reductions are intense in which of the following industries?

Which of the following describes an effect of the increased competition caused by the globalization of production and markets in an industry?

Most manufacturing companies begin their global expansion by:

Local responsiveness may be driven by economic and political demands placed on companies by host country governments.

Whirlpool, a leading U.S. maker of household appliances, has a wholly owned subsidiary that is responsible for research and development (R&D), manufacturing, and sales in over two dozen European countries, from Norway to Greece. What are some of the potential advantages that Whirlpool may gain from its use of a wholly owned subsidiary for global expansion? What are some of the potential disadvantages?

In the wireless telecommunications industry, different technical standards are found in different parts of the world. A technical standard known as GSM is common in Europe, and an alternative standard, CDMA, is more common in the United States and parts of Asia. Equipment designed for GSM will not work on a CDMA network and vice versa. Which of the following pressures for local responsiveness does this represent?