Exam 17: Global Sourcing

In a short essay, explain how global sourcing can contribute significantly to a firm's ability to achieve its strategic goals. Why is "achievement of strategic goals" actually the best rationale for global sourcing?

Audio Component Outsourcing (Scenario) Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality. -Which of the following, if true, most supports the argument in favor of global sourcing?

Which of the following is most likely to occur if a U.S. firm outsources some of its business operations to a Japanese company, and the Japanese yen strengthens against the dollar?

The more diverse the firm's global supply chain, the lesser the cost of logistics.

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

Global Sourcing Debate (Scenario) Prof. Sean Peterson's class of international business has been studying the controversies surrounding global sourcing. Prof. Peterson divided the class into two groups, A and B. Group A was assigned the task of defending global sourcing, whereas Group B was assigned the task of arguing against global sourcing. -How do firms decide whether or not to outsource? In a short essay, describe the factors that contribute to the decision to internalize or externalize business activities.

Business activities that would most likely be offshored are characterized by ________.

Offshoring is a process of creative destruction; according to this view, firms' innovative activities tend to make mature products obsolete over time.

Which of the following activities is highly important to firms as a strategic asset?

Firms usually internalize those value-chain activities they consider part of their core competencies.

Back-office activities consist of downstream, customer-related services.

Which of the following is true with regard to strategies for minimizing the risks of global sourcing?

Audio Component Outsourcing (Scenario) Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality. -Which of the following would be most important to determine in deciding whether to outsource some of Echo's value-chain activities?

Providing after-sales service is typically the activity of a supplier.

Distinguish between captive sourcing and contract manufacturing.

Which of the following is a major challenge often faced by focal firms that engage in global sourcing?

If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.

Global sourcing becomes a catalyst to overhaul organizational processes and company operations and increases the firm's overall competitive advantages by ________.

When outsourcing, managers can minimize the risk of creating employee tension by ________.

Which of the following statements is true with regard to the R&D activities of a firm?