Deck 10: Global Strategy: Competing Around the World

Question 1

Jane is the CEO of a clothing brand,Diva Rule Inc.,which has retail stores and production units in five different countries.The firm's shareholders ensure the proper management of Diva Rule Inc.through their appointed board of directors.In this scenario,Diva Rule Inc.is most likely a

A) nonprofit organization.
B) nationalized firm.
C) sole proprietorship.
D) multinational enterprise.

Answer 1

D
Explanation: In this scenario, Diva Rule Inc. is most likely a multination enterprise (MNE). The MNE is the engine behind globalization-a firm that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries.

Question 2

During the period of Globalization 1.0,the mode of entry into foreign markets primarily involved

A) exporting goods.
B) making foreign direct investments.
C) making foreign institutional investments.
D) licensing production and distribution.

Answer 2

A
Explanation: During Globalization 1.0, basically all the important business functions were located in the home country. Typically, only sales and distribution operations took place overseas-essentially exporting goods to other markets.

Question 3

Which of the following is a feature of the Globalization 2.0 stage?

A) Huge investments in fiber-optic cable networks around the world enabled companies to operate as global-collaboration networks.
B) Only sales and distribution operations took place overseas, while all the important business functions were located in the home country.
C) Two-way knowledge flow between the local subsidiaries and their U.S. headquarters was strong.
D) Multinational enterprises (MNEs) began to create smaller, self-contained replicas of themselves in a few key countries.

Answer 3

D
Explanation: From 1945 to the end of the 20^th century, in the Globalization 2.0 stage, MNEs began to create smaller, self-contained copies of themselves, with all business functions intact, in a few key countries (notably, Western European countries, Japan, and Australia).

Question 4

Silca Electronics Inc.is a consumer-electronics company based in the country of Pelo.It has approximately 300 stores across the country and is already active in three foreign countries.It attempts to establish itself successfully in the country of Zevar,and uses its low-cost strategy to do so.However,due to the additional costs associated with training,coordinating across geographic distances,and other costs associated with doing business in an unfamiliar cultural and economic environment,Silca Electronics Inc.incurs huge financial losses in Zevar.In this scenario,Silca Electronics Inc.'s failure to establish itself successfully in Zevar occurs most likely because

A) it overestimates its need to protect its intellectual property.
B) it underestimates its liability of foreignness when entering the Zevar market.
C) it underestimates its dwindling reputation before it enters the Zevar market.
D) it overestimates the geographic and cultural distance between Pelo and Zevar.

Question 5

Which of the following statements accurately explains the primary reason behind Walmart's failure in Germany?

A) inability to implement its trademark focused-differentiation strategy in the German market
B) significant differences between its U.S. personnel policies and Germany's culture
C) Germany's unfamiliarity with retail discount powerhouses
D) Metro's hostile takeover of Walmart in Germany

Question 6

A firm is said to be pursuing a polycentric innovation strategy when

A) its research facility is situated in the headquarters and all other business activities are located around the world.
B) it draws from multiple, equally important research facilities located throughout the world.
C) it restricts its innovation to Western economies and production to developing markets.
D) its knowledge flow takes a one-way path-from its headquarters to the subsidiaries.

Question 7

European aircraft maker Airbus is investing $600 million in Mobile,Alabama,to build jetliners.Which of the following statements best explains why it is employing this strategy?

A) to take advantage of the high labor costs in the southern United States
B) to take advantage of the high cost of living in the southern United States
C) to take advantage of the low impact of globalization in the United States
D) to take advantage of lower taxes in the southern United States

Question 8

Which of the following is an observable feature in the Globalization 3.0 stage?

A) Knowledge flow between the local replicas of the multinational enterprises and their U.S. headquarters is limited.
B) Only sales and distribution functions of a multinational enterprise are located in a few key countries.
C) Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world.
D) Firms have reorganized from a global enterprise with different centers of expertise to a multinational company with self-contained operations in a few selected countries.

Question 9

A trend observed during the Globalization 3.0 stage involves

A) countries around the globe becoming more self-sufficient and independent.
B) multinational companies organizing as global-collaboration networks.
C) privately-owned firms getting nationalized.
D) world's market economies becoming less integrated.

Question 10

How will an increase in coordinated economic and political integration between countries affect the world economy?

A) The world's market economies will become self-sufficient and independent.
B) There will be gains in social welfare and living standards across the globe.
C) The cost of labor will further decline in emerging economies.
D) There will be a movement away from global-collaboration networks among multinational enterprises (MNEs).

Question 11

India has been able to carve out a competitive advantage in business process outsourcing (BPO)primarily because

A) it has emerged as a manufacturing powerhouse.
B) of an efficient infrastructure and high labor costs.
C) it has an abundance of uneducated workers who are highly trainable.
D) of an abundance of well-educated, English-speaking young people.

Question 12

As a result of globalization,the

A) economies around the world are becoming more independent.
B) cultural distance between countries is increasing.
C) cost of doing business around the world is increasing.
D) world's market economies are becoming more integrated.

Question 13

Which of the following has been a key driver for firms to expand globally during the Globalization 3.0 stage?

A) benefits from lower labor costs in manufacturing and services
B) access to low-cost raw materials such as lumber and iron ore
C) low levels of economic growth in emerging economies
D) inefficient infrastructure in countries like China, which have brought down setting-up costs

Question 14

Japanese and European engineering companies entered China to participate in building the world's largest network of high-speed trains worth billions of dollars.Companies such as Kawasaki Heavy Industries (Japan),Siemens (Germany),and Alstom (France)were joint-venture partners with domestic Chinese companies.These firms now allege that the Chinese partners built on the Japanese and European partners' advanced technology to create their own,next-generation high-speed trains.This example best highlights the _____ that firms can experience when expanding overseas.

A) threat of new entrants
B) liability of foreignness
C) loss of reputation
D) intellectual property exposure

Question 15

Unilever's new-concept center is situated in downtown Shanghai,China,attracting hundreds of eager volunteers to test the firm's latest product innovations on-site while Unilever researchers monitor consumer reactions.In this example,Unilever is trying to reap the benefits of

A) location economies.
B) economies of scope.
C) learning races.
D) network effects.

Question 16

Ridemore Autos Inc.has shifted its research and development unit from its home country to Germany.This allows the company to be better informed about the latest developments in the automotive industry by tapping into the highly advanced automotive industry in Germany.In this scenario,Ridemore Autos Inc.is reaping the benefits of

A) economies of scope.
B) location economies.
C) resource immobility.
D) resource ambiguity.

Question 17

Because keeping cost low is critical to IKEA's value innovation,it switched from a(n)

A) transnational strategy to a multidomestic strategy.
B) transnational strategy to a global-standardization strategy.
C) international strategy to a multidomestic strategy.
D) international strategy to a global-standardization strategy.

Question 18

Although demand for IKEA's low-cost furnishings has increased,its annual store growth has slowed to fewer than ten new stores a year.Why has this happened?

A) IKEA has failed to hire top designers for its furniture.
B) IKEA's global supply chain has become bottlenecked.
C) IKEA has had a revolving door of CEOs for the past 20 years.
D) IKEA's holding companies are all located in Sweden.

Question 19

How has China been affected by its one-child-per-family policy and appreciation of its currency?

A) The purchasing power of its workforce has reduced.
B) The value added to production has reduced.
C) The standard of living within the economy has lowered.
D) The country's advantage in low-cost manufacturing has reduced.

Question 20

Emirates,Etihad Airlines,and Qatar Airways are a threat to U.S.legacy carriers because they offer

A) higher quality for lower costs for international routes.
B) higher quality for similar costs for U.S domestic routes.
C) similar quality for lower costs for international routes.
D) similar quality for lower costs for U.S domestic routes.

Question 21

Which of the following is part of Geert Hofstede's cultural dimensions?

A) locus of control
B) self-efficacy
C) span of control
D) power distance

Question 22

SmallWorld Inc.is a global Internet company that offers country-specific variations of its sites,keeping in mind the linguistic and religious differences between the countries.SmallWorld Inc.is most likely doing this to

A) reduce its geographical distance from the other countries.
B) increase its administrative distance from the other countries.
C) increase its economic distance from the other countries.
D) reduce its cultural distance from the other countries.

Question 23

Zeda is a country of English-speaking people and has a very profitable economy.Which of the following countries is most likely to be the closest to Zeda in terms of cultural distance?

A) Olax, which has the same wealth and per capita income as Zeda
B) Jordax, which has a very profitable economy and where people speak Jordaxian
C) Segar, where people speak English and have a low standard of living
D) Terra, which is located close to Zeda and is easily accessible by road

Question 24

For which of the following companies will geographic distance be the most relevant factor in deciding whether or not to trade with a target country?

A) a firm that manufactures cell phone batteries
B) a firm that extracts and exports iron ore
C) a firm that produces movies
D) a firm that sells wristwatches

Question 25

Which of the following types of organizations comparatively requires the lowest levels of investment and control?

A) joint ventures
B) franchising
C) acquisition
D) greenfield operations

Question 26

United Nerumbia and Fernsland are two neighboring countries with strong economic disparities.However,both the countries share a common national language and the same political ideologies.The relationship between these two countries will most likely affect the trade of

A) food processed in Fernsland.
B) movies and TV shows produced in United Nerumbia.
C) iron ore extracted in Fernsland.
D) luxury items manufactured in United Nerumbia.

Question 27

A greater cultural distance between two trading countries

A) increases linguistic similarities between the two countries.
B) increases the liability of foreignness.
C) reduces the uncertainty of doing business.
D) reduces the transaction costs associated with business.

Question 28

When two neighboring,democratic countries that are part of a trading bloc follow different religions and social norms,they most likely have high ______ distance.

A) political
B) geographic
C) administrative
D) cultural

Question 29

Plethora Inc.,a well-established and reputed multinational enterprise (MNE),is headquartered in a highly developed economy.It wants to start its operations in United Bejukistan,which has been recognized as one of the less-developed nations in the world.How will this strategic move most likely affect Plethora Inc.?

A) It will be able to benefit from economic arbitrage.
B) It will be able to successfully leverage its competitive advantage from economies of standardization.
C) It will be able to replicate its existing business model easily.
D) It will be able to easily sell products for which demand varies by income.

Question 30

Which of the following modes of entering a foreign market allows for the lowest level of control?

A) greenfield ventures
B) exporting
C) joint ventures
D) acquisitions

Question 31

Octa Autos Inc.wants to globally expand its market.It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property,though it may mean investing a significant amount of capital and other resources.In this scenario,which of the following foreign entry modes would best suit Octa Autos Inc.?

A) exporting
B) franchise agreement
C) acquisition
D) licensing

Question 32

Which of the following foreign entry modes primarily involves producing goods in one country to sell in another?

A) greenfield operations
B) brownfield operations
C) exporting
D) crowdsourcing

Question 33

Which of the following statements best explains why Walmart is finding it difficult to replicate its existing business model in India?

A) because of the political differences between India and U.S.
B) because NAFTA prohibits Walmart from investing in countries outside North America
C) because of the large economic distance between U.S. and India
D) because Walmart's low-cost strategy has not been accepted by Indian consumers

Question 34

Which of the following statements is true with regard to international trade between countries?

A) Greater cultural distance between the home and host countries decreases the liability of foreignness to multinational companies.
B) Colony-colonizer relationships have a strong negative effect on bilateral trade between countries.
C) Wealthy countries engage in relatively more cross-border trade than poorer ones.
D) Political integrations decrease the expected trade intensity between two countries.

Question 35

Which of the following factors is the most important determinant of economic distance?

A) the wealth and per capita income of consumers
B) the ethnicity and religion of consumers
C) the presence of legal institutions in a country
D) the topography of a country

Question 36

Under the CAGE distance framework,the administrative and political distance between two countries primarily increases with

A) differences in climates and time zones.
B) the absence of a trading bloc.
C) physical remoteness.
D) the lack of connective ethnic and social networks.

Question 37

Lucar Steels Inc.has decided to enter into a foreign market by setting up its own production facilities and distribution channels from scratch.This will allow it to have strong control over all of its business activities.What is the foreign entry mode most likely opted by Lucar Steels Inc.?

A) greenfield operation
B) export
C) joint venture
D) acquisition

Question 38

Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?

A) They are easy to initiate and terminate.
B) They require low amounts of investments in terms of capital.
C) They reduce a firm's exposure to loss of reputation.
D) They are based on contracts rather than ownership.

Question 39

The administrative and political distance between two trading countries reduces when

A) there are FDI restrictions in the host country.
B) there is no independent central bank in the host country.
C) there are tariffs and trade quotas in the host country.
D) there is a well-functioning capital market in the host country.

Question 40

How has the administrative and political distance between Canada,Mexico,and the United States been reduced?

A) by adopting similar national cultures
B) by lowering the disparities between their per capita incomes
C) by establishing the North American Free Trade Agreement (NAFTA)
D) by reducing their linguistic differences

Question 41

When a firm pursues a(n)_____,it sells the same products or services in both domestic and foreign markets.

A) domestic strategy
B) international strategy
C) differentiation strategy
D) localization strategy

Question 42

Which of the following statements is true of a multidomestic strategy?

A) Firms frequently use a multidomestic strategy when entering host countries with large and/or idiosyncratic local markets.
B) The multidomestic strategy is one of the main strategies companies pursued in the Globalization 1.0 stage.
C) Companies pursuing a multidomestic strategy generally follow a cost-leadership strategy at the business level.
D) The multidomestic strategy effectively protects firms from the risk of intellectual property appropriation.

Question 43

Multinational enterprises (MNEs)like Harley-Davidson,Rolex,and Starbucks are said to be following an international strategy because

A) they pursue a cost-leadership strategy in their respective industries.
B) they are highly responsive to the local needs and preferences of customers in the host countries.
C) they offer the same products or services in all their stores throughout the world.
D) they attempt to combine benefits of localization and standardization strategies simultaneously.

Question 44

Which of the following statements is true of an international strategy?

A) It enables firms to leverage their home-based core competencies in foreign markets.
B) It is advantageous when firms face high pressures for both local responsiveness and cost reductions.
C) It relies on joint ventures to reap economies of scale by accessing a larger market.
D) It effectively protects a firm from exchange rate fluctuations.

Question 45

Which of the following is not included within the types of strategic alliances?

A) joint ventures
B) franchising
C) acquisitions
D) licensing

Question 46

Which of the following statements best describes local responsiveness?

A) the process of producing goods in one country and selling them in another
B) the need to tailor product and service offerings to fit native consumer preferences and host-country requirements
C) the belief that consumer needs and preferences throughout the world are converging and thus becoming increasingly homogenous
D) the additional costs of doing business in an unfamiliar culture and economic environment, and of coordinating across geographic distances

Question 47

Which of the following is a drawback faced by multinational enterprises (MNEs)pursuing an international strategy?

A) They cannot leverage their home-based core competencies in foreign markets.
B) They are highly affected by exchange rate fluctuations.
C) They have to be highly responsive to local needs and preferences.
D) They cannot reap the benefits of economies of scale due to their highly customized products.

Question 48

After testing its products in foreign markets by pursuing an international strategy,GR Foods Inc.wants to expand by pursuing a multidomestic strategy.How will this most likely affect the company?

A) The company's operations will become more cost-efficient.
B) The company's exposure to exchange rate fluctuations will reduce.
C) The company will be able to reap greater benefits from economies of scale.
D) The company will be exposed to a lower risk of intellectual property appropriation.

Question 49

Toyota is selling its hybrid Prius vehicle,built on global platforms,successfully in 80 countries.This information best supports the assumptions made under the

A) globalization hypothesis.
B) upper-echelons theory.
C) real-options perspective.
D) global scaling theory.

Question 50

In which of the following situations is pursuing an international strategy advisable?

A) when a firm manufactures products related to national and religious identity
B) when a firm operates in an industry where the pressure to keep the costs low is extremely high
C) when a firm wants to be perceived as a domestic company by the host-country consumers
D) when a firm enjoys a large domestic market, strong reputation, and brand name

Question 51

A(n)_____ arises out of the combination of high pressure for local responsiveness and low pressure for cost reductions.

A) international strategy
B) transnational strategy
C) global-standardization strategy
D) multidomestic strategy

Question 52

A multinational enterprise (MNE)is said to be pursuing a multidomestic strategy when it

A) is pursued in response to low pressure for local responsiveness and low pressure for cost reduction.
B) attempts to reap significant economies of scale by pursuing a global division of labor based on wherever best-of-class capabilities reside at the lowest cost.
C) attempts to maximize local responsiveness, hoping that the host country consumers will perceive it to be a local company.
D) operates on the assumptions made in the globalization hypothesis in order to lower costs.

Question 53

Which of the following is one of the features of an international strategy?

A) It is characterized by limited local responsiveness.
B) It is one of the newest types of global strategies.
C) It is characterized by cost-leadership as a preferred business strategy.
D) It is often used successfully by firms with relatively small domestic markets.

Question 54

Evara Cosmetics Inc.is a company that operates in 20 countries around the globe.The company clearly understands that the skin and hair type of customers varies from one country to another.Consequently,its products are customized to suit local needs and preferences of customers,even though the costs incurred while producing these products are exceptionally high.This strategy helps the company behave as a local firm in a foreign market.In this scenario,which of the following strategies does Evara Cosmetics Inc.most likely implement?

A) a multidomestic strategy
B) an international strategy
C) a global-standardization strategy
D) a one-product strategy

Question 55

Opula Inc.,a luxury car company,sells the same cars and offers the same superior services in both its home country and foreign markets.The market it operates in faces low pressures for both local responsiveness and cost reductions.Which of the following strategies within the integration-responsiveness framework does Opula Inc.most likely pursue?

A) a multidomestic strategy
B) a transnational strategy
C) a global-standardization strategy
D) an international strategy

Question 56

Which of the following is a drawback of pursuing a multidomestic strategy?

A) The strategy allows for the lowest possible local responsiveness.
B) The strategy lowers the differentiation of a firm's product and service offerings.
C) The strategy exposes a firm to greater exchange rate fluctuation when compared to an international strategy.
D) The strategy is costly and inefficient because it requires the duplication of key business functions across several countries.

Question 57

Fragra Inc.,a company that manufactures and sells premium perfumes,is pursuing an international strategy.SaveMart Inc.,a supermarket chain,follows a multidomestic strategy.Which of the following statements is most likely true of this scenario?

A) Fragra Inc. will sell the same products and services in both domestic and foreign markets, whereas SaveMarket Inc. will customize its product offerings to suit local requirements.
B) Fragra Inc. will pursue a differentiation strategy at the business level, whereas SaveMarket Inc. will pursue a cost-leadership strategy at the business level.
C) Fragra Inc. will be better protected from exchange rate fluctuations when compared to SaveMarket Inc.
D) Fragra Inc. will not be able to leverage its home-based core competencies in foreign markets as much as SaveMarket Inc.

Question 58

A firm following a multidomestic strategy

A) is highly efficient.
B) lacks local responsiveness.
C) faces a greater risk of intellectual property (IP) appropriation.
D) requires exposing explicit knowledge because products are manufactured locally.

Question 59

For a multinational enterprise (MNE),applying the globalization hypothesis would mean

A) being highly responsive to the heterogeneous needs and preferences of consumers globally, without focusing on cost reduction.
B) customizing each product sold by an enterprise to differentiate it from its competitors.
C) manufacturing products on international platforms and slightly modifying them to meet local tastes and standards.
D) pursuing a focused differentiation strategy instead of a cost-leadership strategy to gain a competitive advantage.

Question 60

For which of the following types of industries is a multidomestic strategy most common?

A) machine-tool industries
B) genetic industries
C) food industries
D) capital goods industries

Question 61

A(n)_____ strategy arises out of the combination of high pressure for local responsiveness and high pressure for cost reductions.

A) transnational
B) multidomestic
C) international
D) global-standardization

Question 62

Food Works Inc.is a multinational fast-food chain that follows a multidomestic strategy.Which of the following statements most likely holds true for the company?

A) The company's competitive advantage lies in leveraging its home-based core competencies in foreign markets.
B) Each country unit owned by the company will tend to be highly autonomous.
C) Majority of the value creation for the company will take place in its home country.
D) The company will not face any operational inefficiency as the key business functions do not have to be duplicated.

Question 63

Jade Mobiles Inc.,a cell phone manufacturing company,has its product development centers located in the U.S.and South Korea.The manufacturing units are located in China and Philippines to benefit from low-labor costs and access to original equipment manufacturers.This allows the company to competitively price its cell phones.Also,the various phone models sold by the company are uniform in all the foreign markets it operates in.In this scenario,which of the following strategies does Jade Mobiles Inc.most likely pursue?

A) international strategy
B) multidomestic strategy
C) global-standardization strategy
D) localization strategy

Question 64

A firm pursuing a transnational strategy would believe that

A) key business functions should be located in its home country headquarters.
B) local-responsiveness is more important than cost-reductions for competitive advantage.
C) best practices, ideas, and innovations should be diffused throughout the world.
D) the majority of the value creation should take place in the home country.

Question 65

Which of the following strategies must a multinational enterprise (MNE)use when it wants to pursue an integration strategy at the business level by attempting to reconcile product and/or service differentiations at low cost?

A) a multidomestic strategy
B) an international strategy
C) a global-standardization strategy
D) a transnational strategy

Question 66

For a firm pursuing a global-standardization strategy,which of the following bases of competition becomes its primary weapon?

A) product differentiation
B) superior customer service
C) local responsiveness
D) price

Question 67

Shine Enterprises Inc.is a large financial conglomerate that operates in more than 50 countries and employs over 80,000 people across the world.It operates through multiple regional product divisions,which tend to function as autonomous profit-and-loss centers.This allows the company to reap significant economies of scale.Though each division acts as an autonomous firm with its individual regional leaders,frequent sharing of knowledge between the divisions allows for global learning.These factors help the company reconcile product and service differentiations at low cost.Which of the following strategies does Shine Enterprises Inc.most likely use?

A) an international strategy
B) a focused-differentiation strategy
C) a multidomestic strategy
D) a transnational strategy

Question 68

In which of the following stages of globalization did firms organize as networks to pursue a global-standardization strategy?

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

Question 69

Which of the following is a feature of a multinational company pursuing a global-standardization strategy?

A) Its key business functions are located at the home country headquarters.
B) Its business-level strategy tends to be cost-leadership.
C) Its competitive advantage lies in its high local responsiveness.
D) Its core competency lies in its strong product differentiation.

Question 70

To keep track of the latest developments in computing,Lenovo's research centers are located in China,U.S.A.,and Japan.Also,to benefit from low-cost labor and reduced shipping costs,the company's manufacturing facilities are in Mexico,India,and China.Which of the following strategies would require Lenovo to organize its operations worldwide in order to develop uniform products for its domestic and foreign markets?

A) a transnational strategy
B) a multidomestic strategy
C) a localization strategy
D) a global-standardization strategy

Question 71

Which of the following is a benefit of the transnational strategy?

A) It facilitates global learning and harnesses economies of location.
B) It completely eliminates a firm's risk of intellectual property expropriation.
C) It helps to create a matrix global structure, which is cost-effective and easy to implement.
D) It helps a firm pursue a cost-leadership strategy by minimizing the need for local responsiveness.

Question 72

Which of the following products are generally manufactured by multinational enterprises (MNEs)pursuing a global-standardization strategy?

A) products with a high value-to-weight ratios like luxury goods
B) commodity products like computer hardware
C) consumer products related to national and/or religious identity like food
D) products that carry country-specific quality associations like wine

Question 73

Why did the American MTV network cable channel fail when pursuing a global-standardization strategy?

A) because MTV failed to understand that music videos were a commodity product
B) because the globalization hypothesis holds true for the music industry
C) because cultural distance most affects products with high linguistic content
D) because an international strategy was more suitable for the music industry

Question 74

Which of the following globalization strategies requires managers working in multinational enterprises (MNEs)to remember to think globally,but act locally?

A) international strategy
B) global-standardization strategy
C) transnational strategy
D) focused-differentiation strategy

Question 75

McDonald's uses mutton instead of beef in India and offers teriyaki burgers in Japan.Which of the following strategies is the fast-food chain pursuing?

A) multidomestic strategy
B) focused differentiation strategy
C) global-standardization strategy
D) international strategy

Question 76

Stop n' Save Inc.,a supermarket chain,is implementing a multidomestic strategy.SunLife Inc.,a company that manufactures solar panels for commercial and domestic purposes,is pursuing a global-standardization strategy.How will the two companies most likely differ from each other?

A) Stop n' Save Inc. will focus more on cost-reduction than SunLife Inc.
B) Stop n' Save Inc. will have its business functions spread across the world; SunLife Inc.'s business functions will be highly centralized.
C) Unlike SunLife Inc., Stop n' Save Inc. will be able to pursue a differentiation strategy at the business level.
D) Unlike SunLife Inc., Stop n' Save Inc. will be able to reap significant economies of scale and location economies.

Question 77

The global-standardization strategy arises out of the combination of

A) high pressure for cost reductions and low pressure for local responsiveness.
B) high pressure for local responsiveness and low pressure for cost reductions.
C) low pressure for both local responsiveness and cost reductions.
D) high pressure for both local responsiveness and cost reductions.

Question 78

Some multinational enterprises (MNEs)attempt to reap significant economies of scale and location economies by pursuing an international division of labor based on wherever best-of-class capabilities reside at the lowest cost.This is known as a(n)_____ strategy.

A) international
B) multidomestic
C) global-standardization
D) localization

Question 79

Marc Works Inc.,a reputed brand for fine writing instruments,is implementing an international strategy in its firms.Torque Inc.,a laptop brand,is pursuing a global-standardization strategy in its firms.Which of the following statements most likely holds true in this scenario?

A) While Marc Works Inc.'s competitive advantage lies in its high local responsiveness, Torque Inc. will lack such capabilities.
B) Torque Inc. focuses more on cost-reductions when compared to Marc Works Inc.
C) Torque Inc.'s business functions are highly centralized, whereas Marc Works Inc. organizes its activities worldwide.
D) Torque Inc. is exposed to greater risks of exchange rate fluctuations.

Question 80

Which of the following is a benefit of a multinational enterprise (MNE)pursuing a global-standardization strategy?

A) The firm customizes products and services to better suit local requirements.
B) The firm reaps significant economies of scale and location economies.
C) The firm follows a differentiation strategy at the business level.
D) The firm has all its key business functions located in the home country.