Question 1

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

Accepted Answer

A)  Exporting from the home country and letting a foreign agent organize local marketing 
B)  Licensing 
C)  Franchising 
D)  Entering into a joint venture with a foreign company to set up overseas operations 
E)  Setting up a wholly owned subsidiary 
A)  Exporting from the home country and letting a foreign agent organize local marketing 
B)  Licensing 
C)  Franchising 
D)  Entering into a joint venture with a foreign company to set up overseas operations 
E)  Setting up a wholly owned subsidiary E

Question 2

A nation's companies gain competitive advantage if their domestic customers are

Accepted Answer

A)  nondemanding purchasers. 
B)  able to obtain products or services in other countries. 
C)  sophisticated and demanding. 
D)  willing to spend money on novelties. 
E)  not willing to accept low-priced products. 
A)  nondemanding purchasers. 
B)  able to obtain products or services in other countries. 
C)  sophisticated and demanding. 
D)  willing to spend money on novelties. 
E)  not willing to accept low-priced products. C

Question 3

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

Accepted Answer

Companies can increase their profitability and profit growth from global expansion in several ways.First,companies can take goods or services developed at home and sell them internationally.In so doing,a company instantly expands its market,often by using the same business model.It should be noted that benefits may come from the fact that products are superior,but it is also important that companies use existing competencies in foreign markets as well.Second,companies that expand their sales volume through international expansion can expect to realize savings from economies of scale,thereby increasing profitability through the ability to lower their cost structure.Third,companies can realize location economies by performing value creation activities in the optimal location for that activity,wherever in the world that may be.Different counties offer opportunities to both lower costs and increase differentiation.Finally,a company can leverage the skills of global subsidiaries by applying best practices and good ideas that may come from anywhere in the organization.

Question 4

Most manufacturing companies begin their global expansion by exporting.

Accepted Answer

A) True 
 B)False

Question 5

A key to making a strategic alliance work is

Accepted Answer

A)  having one partner handle daily operations. 
B)  selecting the right partner. 
C)  sharing all knowledge. 
D)  enforcing one culture for both partners. 
E)  reducing investment in the alliance to a minimum. 
A)  having one partner handle daily operations. 
B)  selecting the right partner. 
C)  sharing all knowledge. 
D)  enforcing one culture for both partners. 
E)  reducing investment in the alliance to a minimum.

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

When toymaker Mattel sells Barbie dolls in the Middle East,it changes the doll's shape to one that is a more accurate portrayal of a female body.Mattel does this to

Accepted Answer

A)  create a commodity-type product. 
B)  transfer technological know-how. 
C)  increase product standardization. 
D)  realize experience curve effects. 
E)  respond to differences in local tastes. 
A)  create a commodity-type product. 
B)  transfer technological know-how. 
C)  increase product standardization. 
D)  realize experience curve effects. 
E)  respond to differences in local tastes.

Question 8

List and briefly descibe each of the four basic global strategies.

Accepted Answer

Companies that pursue a global standardi

Question 9

Factor endowments-the cost and quality of factors of production-are a prime determinant of the competitive advantage that certain countries have in certain industries.

Accepted Answer

A) True 
 B)False

Question 10

When a company increases its growth rate by taking goods or services developed at home and selling them internationally,it is

Accepted Answer

A)  leveraging its existing products. 
B)  taking the path of least resistance. 
C)  engaging in price positioning. 
D)  realizing cost economies from global expansion. 
E)  realizing location economies. 
A)  leveraging its existing products. 
B)  taking the path of least resistance. 
C)  engaging in price positioning. 
D)  realizing cost economies from global expansion. 
E)  realizing location economies.

Question 11

Attaining a credible commitment from a potential partner

Accepted Answer

A)  is a step in partner selection. 
B)  requires the ability to share skills with partners. 
C)  requires the ability to learn from alliance partners. 
D)  is a way to minimize opportunism. 
E)  requires the ability to share skills with and learn from alliance partners. 
A)  is a step in partner selection. 
B)  requires the ability to share skills with partners. 
C)  requires the ability to learn from alliance partners. 
D)  is a way to minimize opportunism. 
E)  requires the ability to share skills with and learn from alliance partners.

Question 12

Which of the following is not an objective of a transnational company?

Accepted Answer

A)  Local responsiveness 
B)  Realization of experience-based economies 
C)  Low cross-national integration 
D)  Global learning 
E)  Realization of location economies 
A)  Local responsiveness 
B)  Realization of experience-based economies 
C)  Low cross-national integration 
D)  Global learning 
E)  Realization of location economies

Question 13

Which of the following is not a necessity for leveraging the skills of global subsidiaries?

Accepted Answer

A)  The firm must have incentives for local managers to share knowledge and ideas. 
B)  The firm's managers must be aware that competencies can develop anywhere. 
C)  The firm must be pursuing a strategy of differentiation. 
D)  The firm's managers must help to transfer competencies around the company. 
E)  The firm must offer incentives that encourage employees to take necessary risks. 
A)  The firm must have incentives for local managers to share knowledge and ideas. 
B)  The firm's managers must be aware that competencies can develop anywhere. 
C)  The firm must be pursuing a strategy of differentiation. 
D)  The firm's managers must help to transfer competencies around the company. 
E)  The firm must offer incentives that encourage employees to take necessary risks.

Question 14

Global expansion

Accepted Answer

A)  is feasible only for large companies. 
B)  can enable companies to increase their profitability and grow their profits more rapidly. 
C)  allows domestic companies in the mature stage of the industry life cycle to maintain profits but not to increase them. 
D)  requires locating facilities in foreign countries. 
E)  makes sense for manufacturing firms but not for service firms. 
A)  is feasible only for large companies. 
B)  can enable companies to increase their profitability and grow their profits more rapidly. 
C)  allows domestic companies in the mature stage of the industry life cycle to maintain profits but not to increase them. 
D)  requires locating facilities in foreign countries. 
E)  makes sense for manufacturing firms but not for service firms.

Question 15

MTV is a good example of a company that has had to pursue a transnational strategy.

Accepted Answer

A) True 
 B)False

Question 16

A transnational strategy makes the most sense when there are strong pressures for cost reductions and when demand for local responsiveness is minimal.

Accepted Answer

A) True 
 B)False

Question 17

In which of the following circumstances does a localization strategy make the most sense?

Accepted Answer

A)  Global market standardization is not possible, and there are no significant economies of scale to be realized from centralizing global manufacturing. 
B)  Global market standardization is possible, but there are no significant economies of scale to be realized from centralizing global manufacturing. 
C)  Global market standardization is not possible, but there are significant economies of scale to be realized from centralizing global manufacturing. 
D)  Global market standardization is possible, and there are significant economies of scale to be realized from centralizing global manufacturing. 
E)  Consumer tastes and preferences differ among national markets, and economies of scale are substantial. 
A)  Global market standardization is not possible, and there are no significant economies of scale to be realized from centralizing global manufacturing. 
B)  Global market standardization is possible, but there are no significant economies of scale to be realized from centralizing global manufacturing. 
C)  Global market standardization is not possible, but there are significant economies of scale to be realized from centralizing global manufacturing. 
D)  Global market standardization is possible, and there are significant economies of scale to be realized from centralizing global manufacturing. 
E)  Consumer tastes and preferences differ among national markets, and economies of scale are substantial.

Question 18

Southwest Airlines,Sony,and Costco conduct business in two or more countries.These companies are referred to as multinational companies.

Accepted Answer

A) True 
 B)False

Question 19

The best part of global strategic alliances is that selection of the right partner does not affect success of the alliance.

Accepted Answer

A) True 
 B)False

Question 20

Cost reduction pressures can be particularly intense in industries producing

Accepted Answer

A)  commodity-type products. 
B)  highly differential products. 
C)  goods that do not compete on the basis of price. 
D)  goods servicing narrowly defined markets. 
E)  highly advertised goods. 
A)  commodity-type products. 
B)  highly differential products. 
C)  goods that do not compete on the basis of price. 
D)  goods servicing narrowly defined markets. 
E)  highly advertised goods.

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

A nation's companies gain competitive advantage if their domestic customers are

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

Most manufacturing companies begin their global expansion by exporting.

A key to making a strategic alliance work is

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.

When toymaker Mattel sells Barbie dolls in the Middle East,it changes the doll's shape to one that is a more accurate portrayal of a female body.Mattel does this to

List and briefly descibe each of the four basic global strategies.

Factor endowments-the cost and quality of factors of production-are a prime determinant of the competitive advantage that certain countries have in certain industries.

When a company increases its growth rate by taking goods or services developed at home and selling them internationally,it is

Attaining a credible commitment from a potential partner

Which of the following is not an objective of a transnational company?

Which of the following is not a necessity for leveraging the skills of global subsidiaries?

Global expansion

MTV is a good example of a company that has had to pursue a transnational strategy.

A transnational strategy makes the most sense when there are strong pressures for cost reductions and when demand for local responsiveness is minimal.

In which of the following circumstances does a localization strategy make the most sense?

Southwest Airlines,Sony,and Costco conduct business in two or more countries.These companies are referred to as multinational companies.

The best part of global strategic alliances is that selection of the right partner does not affect success of the alliance.

Cost reduction pressures can be particularly intense in industries producing

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters

Exam 8: Strategy in the Global Environment

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

A nation's companies gain competitive advantage if their domestic customers are

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

Most manufacturing companies begin their global expansion by exporting.

A key to making a strategic alliance work is

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.

When toymaker Mattel sells Barbie dolls in the Middle East,it changes the doll's shape to one that is a more accurate portrayal of a female body.Mattel does this to

List and briefly descibe each of the four basic global strategies.

Factor endowments-the cost and quality of factors of production-are a prime determinant of the competitive advantage that certain countries have in certain industries.

When a company increases its growth rate by taking goods or services developed at home and selling them internationally,it is

Attaining a credible commitment from a potential partner

Which of the following is not an objective of a transnational company?

Which of the following is not a necessity for leveraging the skills of global subsidiaries?

Global expansion

MTV is a good example of a company that has had to pursue a transnational strategy.

A transnational strategy makes the most sense when there are strong pressures for cost reductions and when demand for local responsiveness is minimal.

In which of the following circumstances does a localization strategy make the most sense?

Southwest Airlines,Sony,and Costco conduct business in two or more countries.These companies are referred to as multinational companies.

The best part of global strategic alliances is that selection of the right partner does not affect success of the alliance.

Cost reduction pressures can be particularly intense in industries producing

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters