Deck 9: Global Strategies and International Advantage

Question 1

In international business, the USA, Japan and the EU form what is commonly known as the

A) trading bloc
B) triad
C) trading region
D) FDI

Answer 1

triad

Question 2

Describe the factors in Porter's Diamond of National Advantage.

Answer 2

Factor conditions - these are supply characteristics such as availability of certain skills.
Demand conditions - characteristics of customer demand such as the need for space saving products in Japan Firm strategy, structure and rivalry - the domestic structure of the industry, for example where there are a number of equally powerful firms, it increases the motivation of firms to be innovative Related and supporting industries - the degree to which the industry is surrounded by a network of related firms such as component suppliers to the automobile industry. According to Porter global competitiveness is not just determined by strategies of firms but also by the conditions in the home country (as described by the four factors) of the firm.

Question 3

How effective is the transnational organizational form in addressing the strategic challenges of globalized industries?

Answer 3

According to Bartlett and Ghoshal the transnational organizational form is appropriate for firms in industries which face pressures for global coordination and integration as well as pressures for national responsiveness. The ransnational organization is one which seeks to achieve the benefits of economies of scale and scope and global learning at the same time as benefiting from the increased customer satisfaction achieved through adapting products/services to local tastes. The transnational organization sounds good in theory but it has been problematic in implementation because being an integrated network of companies which relies on effective transfer of competencies throughout the whole organization. Knowledge management is thus crucially important. Command and control is also difficult because the structure is not typical

Question 4

Explain why a global standardization strategy would not be suitable for a high street retailer.

Question 5

Explain what is meant by 'comparative advantage' in international trade theory.

Question 6

Explain using Stopford and Wells model how an internationalizing firm would typically develop.

Question 7

According to Stopford and Wells (1972) international firms typically respond to increasing geographic and product diversity by deploying which kind of organizational structure?

A) A global matrix structure
B) An international division structure
C) Autonomous division structure
D) Global area structure

Question 8

According to Bartlett and Ghoshal (1989), MNEs following a multidomestic strategy were typically from

A) Japan
B) USA
C) Europe
D) Asian

Question 9

According to Rugman and D'Cruz (2000), a 'flagship' firm is one which

A) Is in the top ten of the biggest MNEs in the world
B) Can create value through the creation of beneficial relationships
C) Is able to be both globally integrated and locally responsive
D) Triggers an industry to become global

Question 10

Capital transfers from one country to another country are commonly known as

A) Inward investments
B) Joint Ventures
C) Exports and imports
D) Foreign Direct Investment

Question 11

The 500 largest multinational enterprises in the world accounts for how much of all FDI?

A) 8%
B) 25%
C) 80%
D) 18%

Question 12

The term ______________ industry when competition in one country is influenced by competition in another countryg

Question 13

Which term is used to describe an industry where consumer tastes are not homogenous across all national markets?

A) Multinational
B) Glocal
C) Multidomestic
D) Global

Question 14

Which writer compelled multinational firms to treat the world as one market?

A) Levitt
B) Ohmae
C) Ghemawat
D) Porter

Question 15

Which of the following constitutes a 'demand side' driver of globalization?

A) Deregulation
B) Economies of scope
C) Homogenization of customer tastes
D) Economies of scale

Question 16

Which of the following models can be used to understand why some countries have global competitive advantage in certain industries?

A) Porter's Diamond
B) Porter's Five Forces
C) Ghemawat's CAGE framework
D) Prahalad and Doz's integration responsiveness grid

Question 17

According to Porter, the determinants of national competitive advantage are

A) 1. Factor conditions 2. Firm strategy, structure and rivalry 3. Barriers to entry 4. Related and supporting industries
B) 1. Factor conditions 2. Firm strategy, structure and rivalry 3. Demand conditions 4. Related and supporting industries
C) 1. Buyer power 2. Firm strategy, structure and rivalry 3. Barriers to entry 4. Related and supporting industries
D) 1. Supplier power 2. Firm strategy, structure and rivalry 3. Barriers to entry 4. Related and supporting industries

Question 18

Which of the following industries are likely to follow a global strategy?

A) Processed food
B) Movie production
C) Jet engines
D) Clothing

Question 19

The activities of the value chain of an international firm are likely to be geared towards either global standardization or local adaptation.

Question 20

Production and assembly of automobiles is suitable for which kind of strategy?

A) Local adaptation
B) Multidomestic
C) Global standardization
D) International

Question 21

Which kind of strategy is most suitable for high street retailing?

A) Global standardization
B) Local adaptation
C) Transnational
D) Global integration

Question 22

When an international business decides on how to configure the value chain, it is deciding

A) How to integrate activities
B) How to coordinate activities
C) How to link similar activities
D) Where to perform each activity

Question 23

Which of the following value chain configurations is likely for a strategy of local differentiation?

A) Most or all of the value chain activities are performed within one region
B) Value chain activities are performed where the cost is the lowest
C) Value chain activities are performed where the culture is close to the host organization
D) Value chain activities are performed where exchange rates are favourable

Question 24

According to Ghoshal (1987) there are three fundamental tools for building global competitive advantage. These are achieving economies of scale, achieving economies of scope and

A) innovation
B) creating barriers to entry
C) exploiting absolute advantage
D) exploiting comparative advantage

Question 25

Which of the following statements describes the transnational strategy?

A) Treats the world as a single integrated unit
B) The world of integrated variety
C) Treats foreign operations as offshoots of domestic strategy
D) Treats the world as a portfolio of local markets

Question 26

Some MNEs benefit from the factor conditions outside its home base in achieving global competitive advantage. This is known as

A) The transnational effect
B) The 'double diamond' effect
C) The competitive advantage of nations
D) The diamond of national advantage

Question 27

The competitive advantage matrix of Rugman and Hodgetts (2003) is used as a basis for understanding the basis of competitive advantage of firms.The matrix is based around two variables - firm specific advantages and

A) factor specific advantage
B) diamond specific advantage
C) triad specific advantages
D) country specific advantages