Exam 6: Strategy in the Global Environment

When a company performs a value creation activity in the optimal location for that activity, wherever in the world that might be, they are trying to capitalize on

An international strategy is appropriate when firms face high cost pressures and low pressures for local responsiveness.

The average tariff rate on manufactured goods traded between advanced nations has fallen from around 40 percent to under 4 percent.

If a company wishes to achieve high local customization and it can charge higher prices for this customization, a company should pursue a(n) __________ strategy.

Sony came to dominate the global television market via franchising.

A telecommunications firm develops new wireless cellular phones, a technology in which foreign competition is low and the need for local responsiveness is low. What is the most appropriate short-term strategy for this firm?

Which of the following does not allow a company to reduce unit costs?

Which entry mode gives a multinational the tightest control over foreign operations?

One advantage of exporting is that it avoids the cost of establishing manufacturing operations in the host country.

Many believe that the world's economic system is moving toward a system in which national markets are merging into one huge global marketplace.

Pursuing an international strategy includes all of the following except

In companies following a transnational strategy, the flow of skills and product offerings moves in one direction-from the home company to foreign subsidiaries.

Companies that pursue a global standardization strategy are trying to develop a business model that simultaneously achieves low costs and differentiates the product offering across geographic markets.

Location economics benefits arise from performing a value creation activity in the location optimal for that activity, wherever in the world that might be.

Franchising is a specialized form of licensing in which the franchiser sells the franchisee intangible property (normally a trademark) and insists that the franchisee agree to abide by strict rules about how it does business.

Which of the following entry modes is generally the most costly method of serving a foreign market?

International licensing is an arrangement whereby a foreign licensee buys the rights to produce a company's product in the licensee's country for a negotiated fee.

The success of many multinational companies is based only upon the goods or services they sell in foreign nations.

Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

Rivalry for any company is understood by examining what happens only within the boundaries of its home country.