Deck 10: Global Strategy: Competing Around the World

Question 1

Regional clusters promote regional economic growth because it is easier to promote tighter interfirm collaboration with reduced proximity.

Answer 1

True
Explanation: One of the major characteristics of clusters is reduced proximity.

Question 2

A firm must choose an appropriate international entry strategy to go global.

Answer 2

True
Explanation: Stage model of international entry strategy provides a number of different entry modes for firms to expand globally.

Question 3

MNEs attempt to maximize economies of scale by having access to lowest-cost input factors.

Answer 3

True
Explanation: Low-cost factors are associated with cost reduction.

Question 4

Globalization has led to significant increases in corporate earnings.

Question 5

Hollywood filmmakers used diversified inputs to gain international market access for their products by using:

A) Foreign screenplays.
B) Foreign locations.
C) Foreign actors/actresses.
D) All of the above.

Question 6

According to ChapterCase 10,Hollywood filmmakers have paid little attention to international markets.

Question 7

Which one of the following does NOT contribute to the rapid development of globalization?

A) Falling trade barriers
B) Advanced communication technology
C) Reductions in transportation costs
D) Increasing local tariffs

Question 8

GM's entry into China was gained by using an export strategy.

Question 9

Higher intensity in a focal industry is preferred by MNEs because it promotes a lower cost structure.

Question 10

Walmart's failure in Germany was caused by higher labor costs than the competition.

Question 11

The movie Slumdog Millionaire's budget was $14 million dollars,which is low compared to other Hollywood blockbusters.What was the movie's international focus?

A) Local responsiveness
B) Low cost factors
C) Reduced proximity
D) Crowdsourcing

Question 12

Foreign direct investment is a primary investment process used by small and medium-sized firms to expand internationally.

Question 13

A firm must find the balance between local responsiveness and cost factors.

Question 14

A low-cost labor pool is considered an important factor in international expansion for many MNEs.

Question 15

Foreign direct investment (FDI)is a firm's investment in _________ abroad.

A) Political funds
B) Outsourcing
C) Emerging economies
D) Value chain activities

Question 16

One of the benefits gained by a firm entering the international market is competitive advantage through location.

Question 17

Regional clusters cause higher unemployment rates because of high labor mobility.

Question 18

International strategy refers to:

A) An action plan pursued by American companies to compete against foreign companies operating in the United States.
B) A political and economic action plan developed by businesses and governments to cope with global competition.
C) Leveraging home-based core competencies by selling the same products or services in both domestic and foreign markets.
D) The high entry barriers of the home market.

Question 19

MNEs that pursue a transnational strategy usually end up with an optimal supply chain structure.

Question 20

One of the dimensions of corporate strategy is how to compete effectively in the global marketplace.

Question 21

Location economies are promoted by _____________ from foreign direct investments.

A) High-quality labor
B) A well-established infrastructure
C) A complete supporting industry
D) A community of learning

Question 22

Economic development has two consequences for MNEs.They are ______________.

A) Rising wages and trustworthy relationships with suppliers
B) High living standards and low crime rates
C) Higher production rates and the development of green technology
D) Rising wages and high living standards

Question 23

GM has been producing a small,boxy type of sedan in China,because of:

A) Cultural differences
B) The lower purchasing power of the Chinese market.
C) Different customer demands.
D) All of these.

Question 24

Globalization 1.0 from Strategy Highlight 10.1 is similar to which of the following international entry modes?

A) Licensing
B) Export
C) Strategic alliance
D) Greenfield investment

Question 25

Which one of the following is NOT a reason firms expand abroad?

A) To gain access to a larger market
B) To gain access to low-cost input factors
C) To develop new competencies
D) To dominate domestic markets

Question 26

AstraZeneca,a Swiss pharmaceutical firm,relocated its research facility to the Boston biotech cluster.This is because they want to ___________.

A) Gain access to low-cost input factors
B) Gain access to foreign markets
C) Develop new competencies
D) Enjoy low tariffs

Question 27

Nike is headquartered in the U.S.,outsources its manufacturing to Asia,has an extensive distribution network that covers the entire world,and has extremely high brand name and product exposure around the globe.What stage of globalization is Nike using in this example?

A) Globalization 1.0
B) Globalization 2.0
C) Globalization 3.0
D) Globalization 4.0

Question 28

China is a popular target for MNEs,but it is NOT because of ___________.

A) Low-cost input factors
B) High market potential
C) Their information censorship policy
D) The high-quality labor pool there

Question 29

Global strategy is a firm's strategy to gain ________ when competing against foreign companies around the world.

A) Competitive advantage
B) A home-based market
C) High-quality labor
D) Shareholder value

Question 30

Moving into international markets is a particularly attractive strategy to firms whose domestic markets:

A) Demand a differentiation strategy for success.
B) Have entered the mature stage on the industry life cycle.
C) Have fewer competitors.
D) Have high import tariffs and regulations.

Question 31

According to Strategy Highlight 10.1,when all important business functions are located in the home country and only sales and distribution take place overseas,what stage of globalization is this?

A) Globalization 1.0
B) Globalization 2.0
C) Globalization 3.0
D) Globalization 4.0

Question 32

Why might going global be necessary to achieve growth in smaller economies like South Korea?

A) High intensity of local competition
B) Limited domestic market
C) Abundant local suppliers
D) Plentiful natural resources

Question 33

Firms with core competencies that can be exploited across international markets are able to ______________________________.

A) Achieve synergies and produce high quality goods at lower costs
B) Enter new markets more quickly
C) Enhance their market image and brand loyalty among local consumers
D) Meet local government requirements more quickly than their international competitors

Question 34

____________ refer(s)to the additional costs of doing business in an unfamiliar cultural and economic environment.

A) International strategy
B) National institutions
C) National cultures
D) Liabilities of foreignness

Question 35

What is the main reason that Globalization 2.0 practices have faded over time?

A) Substantial FDI for the duplication of home-based business functions induced a waste of resources.
B) Decoupled strategic business units induced a higher cost of coordination.
C) Distrusting relationships with suppliers induced an increased cost of procurements.
D) A lack of understanding of local cultures caused a higher cost in distribution and sales.

Question 36

The degree of CORE COMPETENCIES increased in a firm when adopting Globalization 2.0 is ________.

A) High, because firms can acquire knowledge from all over the world.
B) High, because firms can acquire high quality labor from all over the world.
C) Low, because firms still have limited knowledge flow back to headquarters.
D) Low, because firms do not need to increase their core competencies.

Question 37

Globalization 2.0 requires significant ________ when initiating business operations overseas.

A) Strategic alliances
B) Joint ventures
C) Foreign direct investment
D) Core competencies

Question 38

The major disadvantages of expanding internationally is ________________.

A) Liability of foreignness
B) Cultural compatibility
C) Technology availability
D) Knowledge complementarity

Question 39

Globalization 1.0 in Strategy Highlight 10.1 is similar to which one of the following strategies?

A) International strategy
B) Global standardization strategy
C) Transnational strategy
D) Localization strategy

Question 40

Google has benefited from being located in San Jose,California,which is considered a high-technology hub.This is because Google enjoyed _________.

A) Low-cost labor
B) Low-cost input factors
C) Low tariffs
D) Location economies

Question 41

When a firm chooses to build new plants and facilities from scratch in foreign markets,this is called __________.

A) Exporting
B) A joint venture
C) A greenfield strategy
D) Franchising

Question 42

According to the globalization hypothesis,there seems to be some convergence of consumer preferences across the globe.However,national differences remain.This is due to ________________.

A) Core competencies
B) Location economies
C) Regional clusters
D) Distinct institutions and cultures

Question 43

The major benefit of having established national institutions is ___________.

A) Reduced uncertainty and cost
B) Higher entry barriers
C) Cultural compatibility
D) Less competitive dynamics

Question 44

_______ focuses on the relationship between genders and its relation to an individual's role at work and society.

A) Uncertainty avoidance
B) Masculinity-femininity
C) Individualism
D) Power distance

Question 45

Which of the following modes of entering a foreign market has the highest level of investment and control?

A) Franchising
B) Licensing
C) Acquisition
D) Exporting

Question 46

Hofstede's national culture consists of all the following EXCEPT:

A) Power distance.
B) Individualism.
C) Uncertainty-avoidance.
D) Knowledge spillover.

Question 47

When the degree of power distance in a particular culture is ______,people tend to allow more inequalities and transform to their own benefits.

A) high
B) low
C) equal
D) usual

Question 48

Terrorist attacks and the war in Iraq have:

A) Encouraged MNEs to take advantage of reduced entry barriers in the Iraqi market.
B) Reduced the "cost of doing business" by MNEs.
C) Increased foreign direct investments in overseas markets.
D) Increased the liability of foreignness for firms thinking of expanding.

Question 49

_______ refers to the political and legal factors of a foreign market.

A) National culture
B) Core competence
C) Competitiveness
D) National institutions

Question 50

In highly masculine cultures,general values are more toward each of the following EXCEPT:

A) Competitiveness
B) Assertiveness
C) The exercise of power
D) Cooperation

Question 51

In high uncertainty-avoidance cultures,the values will lean more toward ______.

A) Tolerance of ambiguity
B) Less emotional resistance to change
C) Structured career patterns
D) A greater willingness to take risks

Question 52

___________ deal(s)with inequality among people in terms of physical and intellectual capabilities.

A) National institutions
B) Power distance
C) Individualism
D) Core competence

Question 53

A phenomena of having an optimal geography for a specific activity is called _______.

A) Crowdsourcing
B) Knowledge sharing
C) Location economies
D) Outsourcing

Question 54

A U.S.manufacturer of adaptive devices for persons with disabilities is considering expanding internationally.It is a fairly small company,but it is looking for growth opportunities.This company should primarily consider the option of:

A) Licensing.
B) Exporting.
C) A strategic alliance.
D) A greenfield strategy.

Question 55

According to the integration-responsiveness framework,if a firm is facing high pressure for local responsiveness and low pressure for cost reductions,the firm is likely to adopt a(n)_____________.

A) Transnational strategy
B) Global-standardization strategy
C) Localization strategy
D) International strategy

Question 56

National culture refers to:

A) The collective mental and emotional programming of the mind that differentiates human groups.
B) Universal customs and habits within the country.
C) Changes of political regimes for each country.
D) None of these.

Question 57

The location advantages associated with locating facilities in other countries can include all of the following EXCEPT:

A) Lower-cost inputs.
B) Access to supplies.
C) Access to markets.
D) The evasion of host country regulations.

Question 58

In high-power distance cultures,people tend to:

A) Translate inequalities in power, status, and wealth.
B) Create equal distribution among people.
C) Adapt to new environments quicker.
D) Embrace change and seek new opportunities.

Question 59

When a firm faces high pressure for local responsiveness and high pressure for cost reduction,it is likely to adopt a(n)_____________.

A) Transnational strategy
B) Localization strategy
C) Global-standardization strategy
D) International strategy

Question 60

Individualism focuses on _______________________.

A) Caring for others
B) Creating equality in society
C) Personal achievement and fame
D) Sharing and the collective good

Question 61

Which of the following companies adopted an international strategy?

A) Lenovo
B) Nestlé
C) Bridgestone
D) Rolex

Question 62

International strategy focuses on:

A) The scale of operations through both product and geographic diversification.
B) Competition within each country.
C) Economies of scale and scope for the firm.
D) The sophistication of monitoring and controlling systems.

Question 63

Transnational strategy is quite appealing,but it is difficult to implement due to _______.

A) The high cost of input factors
B) The diversified national culture
C) The lack of national institutions
D) Organizational complexities

Question 64

A large domestic market can provide the country's industries with a chance at dominating the world market because _____________.

A) They have been able to develop economies of scale at home
B) They have access to abundant resources
C) The related and supporting industries will have been developed
D) They have cultural compatibility

Question 65

The four aspects of Porter's model of national competitive advantage include all of the following EXCEPT the:

A) Factor condition.
B) Demand condition.
C) Economic institutions.
D) Supporting industry.

Question 66

Which of the following is NOT a factor pressuring companies for local responsiveness?

A) Differences in employment laws
B) Customization due to cultural differences
C) Government pressure for firms to use local sources for procurement
D) Availability of low labor costs

Question 67

The Swiss-based Nestlé offers a wide variety of different products to foreign markets because of:

A) International strategy.
B) Localization strategy.
C) Global-standardization strategy.
D) Transnational strategy.

Question 68

The risks of choosing an international strategy includes all of the following EXCEPT:

A) Limited local responsiveness.
B) It is highly affected by exchange rate fluctuations.
C) Leveraging core competence.
D) Legal barriers for expansion.

Question 69

One disadvantage noted in the text of an international strategy is _______________.

A) The expropriation of intellectual property by foreign competitors
B) The high distribution cost for firms operating internationally
C) The low market presence, since there is low response to local markets
D) Diminishing returns on any increasing marginal sales

Question 70

Firms within emerging economies may want to form strategic alliances with firms from developed countries because __________.

A) Assets from the investing foreign company can be nationalized later
B) Disruption to the host-country's economy will be minimal
C) There will be less cultural conflict than in licensing arrangements
D) It gains access to the foreign firm's sophisticated technology

Question 71

Transnational strategy promotes innovation because of:

A) Effective global learning.
B) The standardization of the operation process.
C) Economies of scale and scope.
D) Easier access to natural resources.

Question 72

When a firm faces low pressure for local responsiveness and high pressure for cost reduction,it is likely to adopt a(n)__________.

A) International strategy
B) Localization strategy
C) Global-standardization strategy
D) Transnational strategy

Question 73

Harley Davidson offers similar products in many different global markets by using a(n)____________.

A) International strategy
B) Localization strategy
C) Global-standardization strategy
D) Transnational strategy

Question 74

From Porter's National Competitive Advantage framework,____________ describe(s)a country's endowments in terms of natural,human,and other resources.

A) Demand conditions
B) Competitive intensity
C) Supporting industries
D) Factor conditions

Question 75

According to the integration-responsiveness framework,if a firm is facing low pressure for local responsiveness and low pressure for cost reductions,the firm is likely to adopt a(n)_________.

A) International strategy
B) Localization strategy
C) Global-standardization strategy
D) Transnational strategy

Question 76

The stage model of an international entry vehicle does NOT apply to ___________.

A) Manufacturers
B) Distribution/logistics firms
C) R&D facilities
D) Internet companies

Question 77

Japan,due to a lack of undeveloped land,would be an unusual choice of location for a U.S.cattle company to set up local grazing operations.This limiting factor would be identified in what part of Porter's determinants of national advantage?

A) Factor condition
B) Demand condition
C) Supporting industry
D) Firm strategy and structure

Question 78

To maximize profitability,the best global strategy to use is _____________.

A) The localization strategy of the firm
B) The transnational strategy for the country
C) The global standardization strategy for the SBU
D) Dependent on products offered and strategic intent

Question 79

A global standardization strategy emphasizes _____________.

A) Differentiated products
B) Economy of scale
C) Decentralizing control
D) Adapting to new cultures

Question 80

A reason for a country's development of advanced and specialized factors of production is often its ___________.

A) Lack of a critical resource
B) Small workforce
C) Protective tariffs
D) Monetary wealth