Deck 8: Corporate Diversity

Question 1

Which of Porter's home base determinants relates to the clusters of high- technology enterprises in Silicon Valley?

A) Firm strategy, industry structure and rivalry
B) Governmental policy
C) Home demand conditions
D) Related and supporting industries
E) Factor conditions

Answer 1

D

Question 2

Which three of the following are the key questions for companies considering internationalisation?

A) How far should we modify our products and services?
B) How will it help to gain competitive advantage at home?
C) How can we manage across borders?
D) Which countries should we compete in?

Answer 2

A, C, D

Question 3

An advertising agency is very aware that national requirements and regulations vary widely between different countries. What international strategy should it adopt?

A) Simple export
B) Complex export
C) Global
D) Multidomestic

Answer 3

D

Question 4

Which of the following is not categorised as a type of political risk?

A) International risk
B) Sovereign risk
C) Protection of intellectual property
D) Corruptions
E) Investment risk

Question 5

Which of the following is an advantage of licensing?

A) Limits economic and financial exposure
B) Exploitation of economies of scale
C) Full control of resources and capabilities
D) Combining complementary resources and knowhow

Question 6

Having assessed a country using PESTEL and CAGE analyses, you conclude that the situation may be suitable. However, you note that there are many existing competitors and low barriers to further new entrants from overseas. What action would you take?

A) Review your CAGE analysis.
B) Reject the country as a suitable location.
C) Accept the country as a suitable location.
D) Investigate further.
E) Review your PESTEL analysis.

Question 7

Which market entry mode has an advantage of sharing investment risk with a partner but a disadvantage that there is a loss of competitive advantage through imitation.

A) Joint ventures
B) Exporting
C) Licensing
D) Foreign direct investment

Question 8

Which of the following is a disadvantage of exporting as a foreign entry mode?

A) No operational facilities required in the host country
B) Even inexperienced firms can gain access to export markets via the Internet
C) Economies of scale
D) Exposure to trade barriers such as import tariffs

Question 9

Which market entry mode has an advantage of not needing operational facilities in the host country, but a disadvantage that there are limited opportunities to gain knowledge about local markets and conditions?

A) Exporting
B) Foreign direct investment
C) Licensing
D) Joint ventures

Question 10

Which market entry mode has an advantage of maintaining full control of resources and capabilities but a disadvantage that it involves substantial investment in the host country leading to economic and financial exposure?

A) Foreign direct investment
B) Licensing
C) Exporting
D) Joint ventures

Question 11

Which are the main types of reason for pursuing a strategy of internationalisation?

A) Fun to travel and excuse to get an executive jet
B) Market based reasons, leveraging strategic capabilities and economic benefits
C) Copying what competitors do, exhaustion of local market, political reasons
D) Political reasons, technological reasons and corporate governance reasons

Question 12

Chinese companies are increasingly able to to operate in parts of the world where American companies are finding it hard (e.g. the Middle East and Africa). Which aspect of Ghemawat's framework does this example relate to?

A) Administrative and political distance
B) Cultural distance
C) Geographical distance
D) Economic distance

Question 13

Which of the following have created pressure to internationalisation? Choose all that apply.

A) Poor home performance during the early 2000s.
B) Success of countries like Brazil, Russia, India and China
C) Improvements in communication
D) Lower barriers to trade, investment and migration

Question 14

Which of the following is not one of Porter's home base determinants?

A) Related and supporting industries
B) Governmental policy
C) Factor conditions
D) Home demand conditions
E) Firm strategy, industry structure and rivalry

Question 15

A company selling agricultural materials has a strong base in France, but has little management expertise internationally. What international strategy should it adopt if it wants to expand?

A) Multidomestic
B) Complex export
C) Global
D) Simple export

Question 16

What are the two key points highlighted by the inverted- U curve?

A) There are costs related to the high levels of organisational complexity.
B) Profits can be maximised by maximising the level of international exposure.
C) Smaller companies should not attempt to expand internationally.
D) Internationalisation allows firms to realise benefits such as economies of scale.

Question 17

Which international strategy involves activities that are concentrated but involve low levels of coordination?

A) Global
B) Simple export
C) Complex export
D) Multidomestic

Question 18

What do the letters of Ghemawat's CAGE framework refer to?

A) Cash- based, Administrative, Geographical and Ecological
B) Cultural, Administrative, Geographical and Economic
C) Cash, Administration, Gender and Economy
D) Culture, Anti- American, Geographical and Economic
E) Culture, Administration, Gender and Ecological

Question 19

Which of the following is not an example of utilising the international value network?

A) Availability of unique national capabilities
B) Ability to differentiate products to meet national market requirements
C) Global sourcing
D) Running an export operation from the home base

Question 20

Which of the following is not one of Yip's categories of drivers of internationalisation?

A) Competitive
B) Cost
C) Government
D) Mode of entry
E) Market

Question 21

Which two of the following are least likely to be an important consideration when comparing the economic situation in various countries?

A) Disposable income
B) Currency risk
C) Gross domestic product
D) Demography
E) Religion

Question 22

A company is considering entering a country that seems very attractive, but which contains at least one competitor that can be expected to react strongly. What other factor must be considered?

A) The potential size of the market
B) The likely levels of profit
C) The competitor's clout
D) Social and demographic factors

Question 23

What three factors must be considered when assessing international competitor retaliation?

A) Legislative pressures
B) Market attractiveness
C) Defender reactiveness
D) Social and demographic factors
E) Clout

Question 24

Multinational companies from rich countries are typically weak at serving poor consumers in developing countries. Which aspect of Ghemawat's framework does this example relate to? Choose all that apply.

A) Cultural distance
B) Economic distance
C) Geographical distance
D) Administrative and political distance

Question 25

Which international strategy involves activities that are concentrated and involve high levels of coordination?

A) Global
B) Multidomestic
C) Simple export
D) Complex export

Question 26

Which are the two generic international strategies?

A) Multi- domestic and global
B) Global and local
C) Global and international
D) Transnational and global

Question 27

Which of the following is not a major factor to be considered when identifying attractive national markets?

A) Cultural norms and social structures
B) Macro- economic conditions
C) Local infrastructure
D) Current availability of organisation's product/service
E) Political environment

Question 28

Which of the following are typical stages in the development of a emerging country multinational? Choose all that apply.

A) Developing unique capabilities in the home market.
B) Licensing operations with a firm in a developed country.
C) Forming a joint venture with a new company in a developed country.
D) Developing outposts in more developed markets.

Question 29

Which of the following organisations facilitate internationalisation? Choose all that apply.

A) European Union
B) Greenpeace
C) North American Free Trade Association
D) World Trade Organization

Question 30

What two points does Porter's Diamond highlight?

A) There are inherent reasons why some industries within nations are more competitive than others.
B) The competitiveness of different nations depends solely on the competitiveness of the various industries within that nation.
C) There are inherent reasons why some nations are more competitive than others.
D) There are no clear reasons why some industries within nations are more competitive than others.

Question 31

Which of the following statements is correct?

A) Internationalisation requires managers to learn new ways of doing business.
B) There is no requirement for companies to accumulate knowledge of doing business overseas.
C) Internationalisation means that the same business practices are used worldwide.
D) Large successful companies do not need to consider the different factors influencing national markets.

Question 32

What name is given to small firms that internationalize rapidly at early stages of their development?

A) Born again firms
B) Foreign growth firms
C) Joint ventures
D) Born global firms

Question 33

Which of the following is not a major entry mode into foreign markets?

A) Diversification
B) Foreign direct investment
C) Licensing
D) Exporting
E) Joint ventures and alliances

Question 34

Which of the following is analysed using Porter's Diamond?

A) Groups within an industry with similar characteristics and following similar strategies
B) The reasons why some nations are more competitive than others
C) An organisation's value chain
D) The sources of competition in an industry or sector
E) The key drivers of change

Question 35

Which of the following is not one of the five forces used in Porter's model to analyse industries?

A) Bargaining power of customers
B) Supplier bargaining power
C) Threat of new entrants
D) Bargaining power of complementors
E) Threat from substitutes

Question 36

Under which of Yip's categories of drivers of internationalisation would you place economies of scale and favourable logistics?

A) Mode of entry
B) Competitive
C) Market
D) Government
E) Cost

Question 37

Which two questions must a company consider before deciding on an international strategy?

A) What are the drivers of internationalisation?
B) In which ways should we diversify?
C) Which is the most suitable mode of entry
D) What are the various sources of competitive advantage?

Question 38

What does Ghemawat mean by cultural distance?

A) The degree to which people from the two countries interact.
B) Differences in language, ethnicity, religion and social tastes.
C) The geographical distance from one country to another.
D) Differences in the time for which meetings can be expected to be held.

Question 39

What term is used for the process in which firms initially use entry modes to allow them to maximise knowledge acquisition whilst minimising the exposure of their assets?

A) Emergingisation
B) Reactivity
C) Staged international expansion
D) Licensing

Question 40

Which of the following is not one of the subsidiary roles in multinational firms?

A) Strategy leader
B) Contributor
C) Star
D) Implementer
E) Black hole

Question 41

Internationalisation is likely to be particularly beneficial for service sector organisations.

Question 42

Which three components underly Yip's market driver category?

A) The possibility of transferable marketing
B) The presence of similar customer needs and tastes
C) The presence of global customers
D) The benefits of economies of scale

Question 43

A manufacturing company realises that its components and products could be made more cheaply in a range of countries; the products need to be carefully tailored to suite customers in a range of countries. What international strategy should it adopt?

A) Multidomestic
B) Simple export
C) Global
D) Complex export

Question 44

Which of Porter's home base determinants relates to the German companies' strategy of investing in engineering industries and creating large pools of expertise?

A) Factor conditions
B) Home demand conditions
C) Governmental policy
D) Firm strategy, industry structure and rivalry
E) Related and supporting industries

Question 45

The possibility of transferable marketing means that firms like Coca Cola must devise independent marketing campaigns for every country.

Question 46

Which three elements underly Yip's cost driver category?

A) Favourable logistics
B) The existence of country- specific differences
C) The possibility of transferable marketing
D) The benefits of economies of scale

Question 47

International strategy depends ultimately on the external environment rather than internal, organisational capabilities.

Question 48

Product- diversified firms are likely to do better from international expansion because they have already developed the skills of dealing with internal diversity.

Question 49

During staged international expansion firms initally use entry modes that allow them to maximise knowledge acquisition and maximise the exposure of their assets.