Question 1

A firm can establish a wholly owned subsidiary by

Accepted Answer

A)  acquiring an existing company in the home country. 
B)  keeping all of the activity offshore. 
C)  licensing intellectual property. 
D)  entering into a franchising agreement. 
A)  acquiring an existing company in the home country. 
B)  keeping all of the activity offshore. 
C)  licensing intellectual property. 
D)  entering into a franchising agreement.

Question 2

Exporting is an expensive way to enter foreign markets.

Accepted Answer

A) True 
 B)False

Question 3

L'Oreal acquired two U.S.firms that developed and sold hair care products to African-American customers.This permitted it to build a new ethnic hair care division in Europe and Africa.This represents an advantage of international expansion using ____________.

Accepted Answer

A)  arbitrage 
B)  optimization of the location of value-chain activities 
C)  performance enhancement 
D)  learning opportunities 
A)  arbitrage 
B)  optimization of the location of value-chain activities 
C)  performance enhancement 
D)  learning opportunities

Question 4

In reviewing the Indian Software industry and the diamond of national advantage,which of the following is a growing detractor to the national competitive advantage in this industry?

Accepted Answer

A)  English-language capability 
B)  growing market and sophisticated, customers 
C)  duty-free access to imported computers and software 
D)  rise of competing low-labor-cost countries 
A)  English-language capability 
B)  growing market and sophisticated, customers 
C)  duty-free access to imported computers and software 
D)  rise of competing low-labor-cost countries

Question 5

A multidomestic strategy is the most appropriate strategy for international operations,because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeal to the largest number of consumers in every market.

Accepted Answer

A) True 
 B)False

Question 6

A limitation of a multidomestic strategy is that it may lead to over-adaptation as conditions change.

Accepted Answer

A) True 
 B)False

Question 7

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n)__________ or __________ in order to compete in the global marketplace.

Accepted Answer

A)  global strategy; transnational strategy 
B)  global strategy: multidomestic strategy 
C)  international strategy; multidomestic strategy 
D)  international strategy; transnational strategy 
A)  global strategy; transnational strategy 
B)  global strategy: multidomestic strategy 
C)  international strategy; multidomestic strategy 
D)  international strategy; transnational strategy

Question 8

Typically,joint ventures involve less control and risk than franchising.

Accepted Answer

A) True 
 B)False

Question 9

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n)_________________ strategy.

Accepted Answer

A)  focus 
B)  diversification 
C)  unrelated 
D)  generic 
A)  focus 
B)  diversification 
C)  unrelated 
D)  generic

Question 10

Statistics indicate that over half of the world output now comes from emerging markets.This is leading to a(n)___________ of living standards across the globe and is changing the face of business.

Accepted Answer

A)  divergence 
B)  convergence 
C)  expansion 
D)  contraction 
A)  divergence 
B)  convergence 
C)  expansion 
D)  contraction

Question 11

A __________ is a business in which a multinational company owns 100 percent of the stock.

Accepted Answer

A)  wholly owned subsidiary 
B)  strategic alliance 
C)  joint venture 
D)  franchising operation 
A)  wholly owned subsidiary 
B)  strategic alliance 
C)  joint venture 
D)  franchising operation

Question 12

In a global strategy a firm operates all of its businesses under a single common strategy,regardless of location.

Accepted Answer

A) True 
 B)False

Question 13

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n)__________ or __________ in order to compete in the global marketplace.

Accepted Answer

A)  global strategy; transnational strategy 
B)  global strategy: multidomestic strategy 
C)  international strategy; global strategy 
D)  transnational strategy; multidomestic strategy 
A)  global strategy; transnational strategy 
B)  global strategy: multidomestic strategy 
C)  international strategy; global strategy 
D)  transnational strategy; multidomestic strategy

Question 14

There are risks associated with the Bottom of the Pyramid strategy.One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

Accepted Answer

A) True 
 B)False

Question 15

To be responsive to local pressures,companies must ____________ their offerings and strategies from country to country to reflect local consumer preferences.

Accepted Answer

A)  internationalize 
B)  globalize 
C)  differentiate 
D)  standardize 
A)  internationalize 
B)  globalize 
C)  differentiate 
D)  standardize

Question 16

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?

Accepted Answer

A)  foreign rivalry 
B)  domestic rivalry 
C)  global rivalry 
D)  international rivalry 
A)  foreign rivalry 
B)  domestic rivalry 
C)  global rivalry 
D)  international rivalry

Question 17

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

Accepted Answer

A)  A low-end version of a brand may detract from the overall brand attractiveness. 
B)  The new low-cost products they develop may cannibalize the sales of their core products. 
C)  Entrenched competitors can impact the ability of the new firm to enter the market successfully. 
D)  New products may be perceived as exploiting the privileged customer with substandard products. 
A)  A low-end version of a brand may detract from the overall brand attractiveness. 
B)  The new low-cost products they develop may cannibalize the sales of their core products. 
C)  Entrenched competitors can impact the ability of the new firm to enter the market successfully. 
D)  New products may be perceived as exploiting the privileged customer with substandard products.

Question 18

In international markets,a disadvantage of licensing is that the firm granting a license incurs little risk,since it does not have to invest any significant resources into the country itself.

Accepted Answer

A) True 
 B)False

Question 19

Major Western hemisphere trade blocs include NAFTA,Mercosur,and ASEAN.

Accepted Answer

A) True 
 B)False

Question 20

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

Accepted Answer

A) True 
 B)False

A firm can establish a wholly owned subsidiary by

Exporting is an expensive way to enter foreign markets.

L'Oreal acquired two U.S.firms that developed and sold hair care products to African-American customers.This permitted it to build a new ethnic hair care division in Europe and Africa.This represents an advantage of international expansion using ____________.

In reviewing the Indian Software industry and the diamond of national advantage,which of the following is a growing detractor to the national competitive advantage in this industry?

A multidomestic strategy is the most appropriate strategy for international operations,because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeal to the largest number of consumers in every market.

A limitation of a multidomestic strategy is that it may lead to over-adaptation as conditions change.

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n) or in order to compete in the global marketplace.

Typically,joint ventures involve less control and risk than franchising.

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n)_________________ strategy.

Statistics indicate that over half of the world output now comes from emerging markets.This is leading to a(n)___________ of living standards across the globe and is changing the face of business.

A __________ is a business in which a multinational company owns 100 percent of the stock.

In a global strategy a firm operates all of its businesses under a single common strategy,regardless of location.

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n) or in order to compete in the global marketplace.

There are risks associated with the Bottom of the Pyramid strategy.One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

To be responsive to local pressures,companies must ____________ their offerings and strategies from country to country to reflect local consumer preferences.

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

In international markets,a disadvantage of licensing is that the firm granting a license incurs little risk,since it does not have to invest any significant resources into the country itself.

Major Western hemisphere trade blocs include NAFTA,Mercosur,and ASEAN.

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

Strategic Management: Creating Competitive Advantages

Analyzing the External Environment of the Firm: Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firms Intellectual Assets: Moving Beyond a Firms Tangible Resources

Business-Level Strategy: Creating and Sustaining Competitive Advantages

Corporate-Level Strategy: Creating Value Through Diversification

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership: Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

Filters

Exam 7: International Strategy: Creating Value in Global Markets

A firm can establish a wholly owned subsidiary by

Exporting is an expensive way to enter foreign markets.

L'Oreal acquired two U.S.firms that developed and sold hair care products to African-American customers.This permitted it to build a new ethnic hair care division in Europe and Africa.This represents an advantage of international expansion using ____________.

In reviewing the Indian Software industry and the diamond of national advantage,which of the following is a growing detractor to the national competitive advantage in this industry?

A multidomestic strategy is the most appropriate strategy for international operations,because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeal to the largest number of consumers in every market.

A limitation of a multidomestic strategy is that it may lead to over-adaptation as conditions change.

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n)__________ or __________ in order to compete in the global marketplace.

Typically,joint ventures involve less control and risk than franchising.

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n)_________________ strategy.

Statistics indicate that over half of the world output now comes from emerging markets.This is leading to a(n)___________ of living standards across the globe and is changing the face of business.

A __________ is a business in which a multinational company owns 100 percent of the stock.

In a global strategy a firm operates all of its businesses under a single common strategy,regardless of location.

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n)__________ or __________ in order to compete in the global marketplace.

There are risks associated with the Bottom of the Pyramid strategy.One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

To be responsive to local pressures,companies must ____________ their offerings and strategies from country to country to reflect local consumer preferences.

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

In international markets,a disadvantage of licensing is that the firm granting a license incurs little risk,since it does not have to invest any significant resources into the country itself.

Major Western hemisphere trade blocs include NAFTA,Mercosur,and ASEAN.

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

Strategic Management: Creating Competitive Advantages

Analyzing the External Environment of the Firm: Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firms Intellectual Assets: Moving Beyond a Firms Tangible Resources

Business-Level Strategy: Creating and Sustaining Competitive Advantages

Corporate-Level Strategy: Creating Value Through Diversification

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership: Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

Filters

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n) or in order to compete in the global marketplace.

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n) or in order to compete in the global marketplace.