Exam 8: Global Strategy

Discuss the effect of international diversification on a firm's returns.

Strategic alliances tend to increase the risk associated with international expansion for the U.S. partner because of the greater dependence on the foreign firm.

The decision of what entry mode to use is primarily based on all of the following factors EXCEPT

Which of the following is NOT a disadvantage associated with exporting?

Case Scenario 3: Compliance, Inc. Compliance, Inc., (CI) conducts clinical human and animal trials for the pharmaceutical and biotechnology industries. Revenues are split evenly between early and late drug development services. In the area of early drug development, CI offerings include analytical, bioanalytical, antibody, clinical pharmacology (Phases I-IIa), toxicology, and drug metabolism services. Late development services include central diagnostics, central lab, clinical development (Phases IIb- IIIa), periapproval (Phases IIIb-IV), and pharmacogenomics. The bulk of its business is conducted in Europe and the U.S. (10 and 17 subsidiaries, respectively); CI also has subsidiaries in Africa, Latin America, Asia, and Australia. While now an independent public company, CI was once itself a subsidiary of Corning International. Corning built up CI through over 40 acquisitions, hoping to extend its strength in medical testing glassware into the medical services business. At the time Corning made its acquisitions, the clinical testing industry was geographically fragmented, owing largely to the fact that various parts of the world had their own strong local pharmaceutical companies and distinct regulatory environments. Perhaps for that reason Corning, and now CI, has retained the autonomous character of each country's businesses. However, globalization of the regulatory environment (both global and local standards), globalization of the biotechnology firms (increasing the geographic scope of their operations), and tremendous consolidation in the pharmaceutical industry (reducing the number of pharmaceutical industry participants to only a handful of major global companies) is causing CI to question its decentralized strategy. -(Refer to Case Scenario 3) What benefits might CI expect from using an international strategy?

Export, licensing, and the strategic alliance entry modes are all appropriate for early market development.

All of the following are international corporate-level strategies EXCEPT the ____ strategy.

A multidomestic strategy is an international strategy in which a firm's home office determines the strategies business units are to use in each region.

Even if effectively implemented, the transnational strategy often produces lower performance than does the implementation of either the multidomestic or global strategies.

Part of Japan's success in the video game industry is derived from two related and support industries: cartoons and animation, and electronics.

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

All of the following are reasons why firms use international strategic alliances EXCEPT

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

Exporting and licensing are the most appropriate ways for smaller firms to first enter international markets.

A transnational corporate-level strategy seeks to achieve

What are the three basic benefits of international strategies?

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

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.

Although licensing is the least costly method to enter a foreign market, its disadvantages include high costs of transportation and low control over the marketing and distribution of goods.

A multidomestic corporate-level strategy is one in which