Exam 8: Global Strategy

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 increase in the value of the U.S. dollar is an example of an economic risk in that it can reduce the value of U.S. multinational firms' international assets and earnings in other countries.

Case Scenario 2: Heartsong LLC. Heartsong LLC is a designer and manufacturer of replacement heart valves based in Peoria, Illinois. While a relatively small company in the medical devices field, it has established a worldwide reputation as the provider of choice of high-quality, leading-edge artificial heart valves. Most of its products are sold to large regional hospital systems and research hospitals around the world, though primarily to customers in the U.S. and Europe. Specialty heart centers are another emerging, but fast-growing market for its valves. Heartsong has recently embarked on an expansion strategy that requires it to increase its volume, which in turn will demand more component parts than it can source domestically - both from an economic and volume standpoint. The firm has determined that such growth is only viable if it produces these parts itself overseas for a lower cost, or outsources the production entirely to a joint venture it establishes with a local manufacturer, which could both produce the parts more cheaply and in higher volumes. It is considering starting up an owned production facility in Luxembourg, or seeking a joint venture with a precision manufacturer in China. -(Refer to Case Scenario 2) What opportunities and threats might Heartsong be exposing itself to via the Luxembourg expansion proposal?

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

Terrorism creates an economic risk for firms which

A multidomestic strategy is an international strategy in which strategic and operating decisions are decentralized to the strategic business units in individual or regions.

The high cost of transportation, expense of tariffs, and loss of control are three disadvantages of exporting.

While there are multiple means of entering new international markets, firms should use one method consistently with all of its various products and across its different markets in order to reduce administrative complexity.

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

In some industries, technology drives globalization because the economies of scale necessary to reduce costs cannot be met by competing in domestic markets alone.

The global strategy offers greater opportunities to take innovations developed at the corporate level in one market and apply them to other markets.

The Chapter 8 Opening Case indicates that main basic benefit that Starbucks derives from its international strategies is

The location advantages associated with locating facilities in other countries can include all of the following EXCEPT

The three corporate-level international strategies are cost leadership, differentiation, and focus.

An international diversification strategy is one in which a firm

International diversification can help to reduce a firm's overall risk through the stabilization of returns.

Cultural differences affect location advantages in that business transactions are less difficult for a firm to complete when there is a strong match among the cultures with which the firm is involved.

Identify and describe the modes of entering international markets. What are their advantages and disadvantages?

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

What drives the decision by Walmart in its choice of international entry modes? (Chapter 8 Strategic Focus)