Deck 7: Strategies for Competing in International Markets

Question 1

Which of the following statements is false?

A)Tiffany entered the mining industry in Canada to access diamonds that could be certified as "conflict free" and not associated with either the funding of African wars or unethical mining conditions.
B)Many U.S.airlines locate call centers in countries such as India and Ireland.
C)The advantage to Italian companies like Ducati,Ferrari,and Maserati,which have developed as part of a related-automotive technology industry cluster,comes from the close collaboration with key suppliers and the greater knowledge sharing throughout the cluster,resulting in greater efficiency and innovativeness.
D)Companies like Samsung that export goods to foreign countries always gain in competitiveness when the currency of South Korea,in which the goods are manufactured,is strong.
E)Venezuela's 2017 nationalization of a General Motors plant in Valencia that employs nearly 2,700 workers is an example of political risk.

Answer 1

D

Question 2

Competitive advantages of manufacturing goods in a particular country and exporting them to foreign markets

A)are largely unaffected by fluctuating exchange rates.
B)are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders.
C)can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold.
D)are eroded when the manufacturing country's home currency strengthens relative to the currencies of the foreign countries where the output is being sold.
E)are seriously compromised by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

Answer 2

D

Question 3

Competing in the markets of foreign countries entails dealing with such factors except

A)fluctuating exchange rates,country-to-country variations in host-government restrictions and requirements,and variations in cultural,demographic,and market conditions.
B)important country-to-country differences in consumer buying habits and buyer tastes and preferences.
C)whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide.
D)the fact that product designs suitable for one country are sometimes inappropriate in another.
E)the prevalence of global brands.

Answer 3

E

Question 4

Which one of the following is not a reason a company decides to enter foreign markets?

A)Spreading business risk across a wider geographic market base
B)Capitalizing on company competencies and capabilities
C)Achieving lower costs and enhance the firm's competitiveness
D)Building the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market
E)Gaining access to new customers

Question 5

Market size and growth rates in different countries can be influenced positively or negatively by

A)population sizes,income levels and cultural influences,the current state of the infrastructure,and distribution and retail networks available.
B)the ability of management to tailor a strategy to take into consideration country differences.
C)the large size of emerging markets such as China and India.
D)competitive rivalry that is only moderate in some countries.
E)the absence or presence of low trade barriers.

Question 6

Exxon Mobil has entered into a pact with Gazprom,the world's largest natural gas extractor,to set up a processing unit in Baku,Azerbaijan.Which of the following is most likely the reason for Exxon Mobil to opt for this strategic alliance?

A)To better compete with Gazprom
B)To scale back its core competencies
C)To gain access to low-cost inputs of production
D)To gain access to new customers in new markets
E)To restrict its factors of production

Question 7

The reasons why a company opts to expand outside its home market include all of the following except

A)to exploit its core competencies and capabilities
B)to identify resources and capabilities in the company's home market
C)to achieve lower costs thereby enhancing the firm's competitiveness
D)to gain access to new customers for the company's products/services
E)to achieve lower costs through economies of scale,experience,and increased purchasing power

Question 8

Companies opt to expand into foreign markets in order to

A)grow sales faster than the industry average,reduce the competitive threats from their rivals,and open up more opportunities to enter into strategic alliances.
B)boost returns on investment,broaden their product lines,avoid tariffs and trade restrictions,and escape dealing with strong labor unions.
C)avoid having to employ an export strategy,avoid the threat of cross-market subsidization from their rivals,and enable the use of a global strategy instead of a multidomestic strategy.
D)raise the entry barriers for industry newcomers,neutralize the bargaining power of important suppliers,grow sales faster,and increase the number of loyal customers.
E)gain access to new customers,achieve lower costs,enhance the company's competitiveness,capitalize on core competencies,and spread business risk across a wider market base.

Question 9

What factor is not likely to be responsible for Apple's decision to set up mobile phone manufacturing facilities in India?

A)comparatively lower exchange rate and political risks
B)potential location advantages in wages,inflation rates,and tax rates that reduce costs
C)global standardization of mobile phone technology
D)growth potential of India's emerging market
E)franchising opportunities in India

Question 10

Competing in the markets of foreign countries generally does not involve which of the following?

A)Country-by-country differences in consumer buying habits,tastes,and preferences
B)Country-by-country variations in host-government regulations,fluctuating exchange rates,and economic policies
C)Choices to customize the company's offerings to each country market or to offer a primarily standardized product to all markets around the globe
D)Choices to locate company operations on the basis of variations in wages rates,worker productivity,energy costs,tax rates,and distribution channels
E)Crafting a multicountry strategy that can transform the world market into one big profit sanctuary

Question 11

Which of the following countries had the highest manufacturing labor wage rates in 2015?

A)United States
B)South Korea
C)India
D)China
E)Norway

Question 12

One of the biggest strategic challenges to competing in the international arena include

A)how to avoid the risks of shifting exchange rates.
B)whether to charge the same price in all country markets.
C)how many foreign firms to license to produce and distribute the company's products.
D)whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the tastes and preferences of local buyers.
E)whether to pursue a global strategy or an international strategy.

Question 13

Which of the following is not an accurate statement as concerns competing in the markets of foreign countries?

A)Localizing Apple's product offerings country-by-country leads to low-cost advantage.
B)Starbucks must contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements.
C)There are country-to-country differences in Round Table Pizza's customers' buying habits and buyer tastes and preferences.
D)Market growth rates vary from country to country,impacting John Deere's international sales.
E)Avon's cosmetic products suitable for China are often inappropriate in Singapore and Malaysia.

Question 14

Which of the following is not a reason why the world economy is globalizing at an accelerated pace?

A)Growth-minded companies are racing to build stronger competitive positions in the markets of more countries.
B)Information technology is shrinking the importance of geographic distance.
C)Countries that previously had planned economies now embrace mixed or market economies.
D)Countries previously closed to foreign companies have opened their markets.
E)Countries opposed to market or mixed economies have stringent trade barriers in place.

Question 15

Which of the following countries had the lowest manufacturing labor wage rates in 2015?

A)Hungary
B)Brazil
C)India
D)China
E)Mexico

Question 16

Which of the following is not a reason why a company decides to enter foreign markets?

A)To impart technical knowledge to high-cost human resources in developing nations
B)To capitalize on company competencies and capabilities
C)To spread business risk across a wider geographic market base
D)To capture economies of scale in product development,manufacturing,or marketing
E)To achieve lower costs through economies of scale,experience,and increased purchasing power

Question 17

Which of the following is not a possible reason why Uber opted to expand its on-demand transportation services into foreign markets?

A)To build the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market
B)To achieve lower costs and enhance the firm's competitiveness
C)To capitalize on company competencies and capabilities
D)To gain access to new customers in new markets
E)To spread its business risk across a wider geographic market base

Question 18

Why do companies decide to enter a foreign market?

A)To exploit the natural resources found within its home market.
B)To decrease the rate at which they accumulate experience and move up the learning curve.
C)To raise input costs through greater pooled purchasing power.
D)To capture economies of scale in product development,manufacturing,or marketing.
E)To concentrate risk within a broader base of countries,especially when sales are down in one area and the company can undermine sales elsewhere.

Question 19

Which of the following is not a typical reason for a company to expand into the markets of foreign countries?

A)Gaining access to new customers
B)Strengthening its capability to employ offensive strategies,especially those that involve preemptive strikes
C)Achieving lower costs and enhance the firm's competitiveness
D)Capitalizing on company competencies and capabilities
E)Spreading business risk across a wider geographic market base

Question 20

Which of the following is not a factor surrounding the decision to enter into the markets of foreign countries?

A)Market growth rates that vary from country to country
B)Country-by-country differences in consumer tastes and buying habits
C)Fluctuating exchange rates and country-by-country variations in host-government restrictions and requirements
D)Product designs that may be suitable for one country but inappropriate for another
E)Repatriation of foreign company assets by governments in countries outside of home market(s)

Question 21

Which of the following is not an example of a cross-border alliance?

A)Pharmaceutical giants Eli Lilly and Kyowa Hakko Kogyo develop and perform clinical tests of a new cancer treatment therapy.
B)Western Union purchases the global payments division of British-owned Travelex Ltd.
C)Deutsch,a New York-based wine importer,and Casella,an Australian wine producer,create and market the Yellowtail wine brand.
D)Lidl,a German deep-discount supermarket chain,establishes a new wholly owned venture with a supermarket chain in Poland.
E)American Airlines' close ties and shared reservations systems with Japan Airlines and Cathay Pacific.

Question 22

The disadvantages of using a franchising strategy to pursue opportunities in foreign markets do not include

A)maintaining quality control.
B)having to decide whether to allow foreign franchisees to modify the franchisor's product offering to better satisfy the tastes and expectations of local buyers.
C)foreign franchisees that do not always exhibit strong commitment to consistency and standardization.
D)franchisees bearing most of the costs and risks of establishing foreign locations,so a franchisor has to expend only the resources to recruit,train,support,and monitor franchisees.
E)the ability to build multiple profit sanctuaries.

Question 23

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

A)franchisees bear most of the costs and risks of establishing foreign locations,and the franchisor is required to expend only the resources to recruit,train,and support foreign franchisees.
B)its being particularly well suited to the global expansion efforts of companies with multicountry strategies.
C)the ability to build multiple profit sanctuaries.
D)its being particularly well suited to companies that employ cross-market subsidization.
E)its being particularly well suited to the global expansion efforts of manufacturers.

Question 24

When a company operates in the markets of two or more different countries,its foremost strategic decision is

A)whether to use strategic alliances to help defeat its rivals.
B)whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.
C)whether to maintain a national (one-country)manufacturing base and export goods to the other countries.
D)which foreign companies to team up with via strategic alliances or joint ventures.
E)whether to test the waters with an export strategy before committing to some other competitive approach.

Question 25

Acquisition of an existing firm rather than via internal development may be the least risky and cost-efficient means of overcoming entry barriers such as

A)rapidly building a strong market presence.
B)moving directly to the task of transferring resources and personnel,and integrating and redirecting activities into the acquiring firm's operation.
C)gaining access to local distribution networks,building supplier networks,and establishing working relationships with key government officials.
D)fast-tracking exports into a foreign market by marketing indirectly through local rivals.
E)putting the acquiring firm's strategy into place.

Question 26

Using domestic plants as a production base for exporting goods to selected foreign country markets

A)can be an excellent initial strategy to pursue international sales.
B)can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country.
C)works well when a firm does not have the financial resources to employ cross-market subsidization.
D)is usually a weak strategy when competitors are pursuing multicountry strategies.
E)can be a powerful strategy because the company is not vulnerable to fluctuating exchange rates.

Question 27

Government host policies are not likely to increase a country's political and economic risks when

A)the national government is unstable or weak.
B)incentives such as reduced taxes,low-cost loans,and site-development assistance are provided to companies agreeing to construct or expand production and distribution facilities.
C)there is distress in the country's monetary system.
D)there are threats from piracy and lack of protection for the company's intellectual property.
E)there is new onerous legislation or regulations on foreign-owned businesses.

Question 28

A think local,act local multidomestic type of strategy

A)is very risky,given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods.
B)is usually defeated by a think global,act global type of strategy.
C)is more appealing the bigger the country-to-country differences in buyer tastes,cultural traditions,and marketing methods.
D)is generally an inferior strategy when one or more foreign competitors is pursuing a global low-cost strategy.
E)can defeat a global strategy if the think local,act local multidomestic strategist concentrates its efforts exclusively in those foreign markets where it has profit sanctuaries.

Question 29

Which of the following is not one of the strategy options for expanding into markets of foreign countries?

A)A profit sanctuary strategy
B)An export strategy
C)A licensing strategy
D)Establishment of a subsidiary in a foreign market strategy
E)A franchising strategy

Question 30

Which of the following is not a potential benefit of strategic alliances or other cooperative arrangements between foreign and domestic companies?

A)Obtaining wider access to attractive country markets
B)Gaining better access to economies of scale in production and/or marketing
C)Filling competitively important gaps in technical expertise and/or knowledge of local markets
D)Safeguarding the company's dependence,allowing for positive engagement once the purpose has been serving,and ensuring products of important technical standardization requirements are not developed
E)Sharing distribution facilities and dealer networks,thus mutually strengthening access to buyers

Question 31

Which of the following is not one of the problems and risks of cross-border strategic alliances,that is,between domestic and foreign firms?

A)Overcoming language and cultural barriers,and the sometimes-extensive managerial time required for trust-building,communication,and coordination
B)The trouble allies can have reaching mutually agreeable ways to deal with key issues
C)Becoming overly dependent on another company for essential expertise and competitive capabilities
D)Making it harder to pursue a multidomestic strategy as compared to a global strategy
E)Suspicions about whether allies are being forthright in exchanging information and expertise

Question 32

The advantages of using a licensing strategy to participate in foreign markets include

A)being especially well suited to the use of cross-market subsidization.
B)being able to charge lower prices than rivals.
C)enabling a company to achieve competitive advantage quickly and easily.
D)being able to leverage the company's technical know-how or patents without committing significant additional resources to markets that are unfamiliar,politically volatile,economically uncertain,or otherwise risky.
E)being able to achieve higher product quality and better product performance than with an export strategy.

Question 33

The advantages of using an export strategy to build a customer base in foreign markets include

A)being able to minimize shipping costs,avoid tariffs,and curb the effects of fluctuating exchange rates.
B)minimizing capital requirements and involvement in foreign markets.
C)being cheaper and more cost effective than licensing and franchising.
D)being cheaper and more cost effective than a multicountry strategy.
E)facilitating the establishment of profit sanctuaries in foreign countries and being more suited to accommodating local buyer tastes than a global strategy.

Question 34

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true?

A)Fluctuating exchange rates pose no significant risks to a company's competitiveness in foreign markets.
B)Competitive advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.
C)Exporters are advantaged when the currency of the country where goods are being manufactured grows stronger.
D)Exporters always gain in cost/price competitiveness when the currency of the country in which the goods are manufactured is weak.
E)Exporters always lose in cost/price competitiveness when the currency of the country in which the goods are manufactured is weak.

Question 35

Which of the following is an example of an export strategy?

A)Facebook generates 51 percent of its advertising revenue outside the United States.
B)American Airlines' common stock,owned by AMR Corp. ,is not available for public purchase.
C)The popular Harry Potter character Voldemort can only be leased or rented for use by amusement park operators.
D)ZipCar allows taxi fleet operators to use its trademarks,services,and products for a fee.
E)The United States is home to the world's three largest producers and suppliers of artificial heart valves.

Question 36

Which of the following is an example of a cross-border alliance?

A)Hyundai Motor Company plans to open a new manufacturing plant in the Czech Republic.
B)Carrefour,a French grocery chain,established a new wholly owned venture in Poland.
C)Facebook took over WhatsApp for $19 billion in February 2014.
D)The insurance company Geico is a wholly owned subsidiary of Berkshire Hathaway.
E)Renault-Nissan sells more than one in ten cars worldwide.

Question 37

Founding a wholly owned subsidiary in a foreign market to take advantage of all essential value chain activities requires a strategy that

A)establishes a wholly owned subsidiary.
B)acquires a foreign company.
C)supports direct control over all aspects of operating in a foreign market.
D)establishes a start-up operation.
E)creates multiple country value chains to attain and sustain a competitive advantage in all markets served.

Question 38

A think local,act local multidomestic strategy works particularly well when

A)host governments relax regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards.
B)there are few country-to-country differences in customer preferences and buying habits.
C)diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country to country.
D)there are few country-to-country differences in distribution channels and marketing methods.
E)companies centralize strategy making in global headquarters.

Question 39

The strategic options for expansion into foreign markets include all of the following except

A)employing a franchising strategy.
B)maintaining a national (one-country)production base and exporting goods to foreign markets.
C)licensing foreign firms to produce and distribute one's products.
D)establishing a subsidiary in a foreign market.
E)creating products and services that are not subject to tariffs and local regulations.

Question 40

The strength of a think local,act local multidomestic strategy is that

A)it matches a company's competitive approach to prevailing market and competitive conditions in each country market.
B)each of a company's country strategies is almost totally different from and unrelated to its strategies in other countries.
C)the plants located in different countries can be operated independently of one another,thus promoting greater achievement of scale economies.
D)it avoids host-country ownership requirements,and import quotas.
E)it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

Question 41

A think global,act global approach to strategy making is preferable to a think local,act local approach when

A)a big majority of the company's rivals are pursuing localized multidomestic strategies.
B)country-by-country differences are small enough to be accommodated within the framework of a mostly uniform global strategy.
C)plants need to be scattered across many countries to avoid high shipping costs.
D)market growth rates vary considerably from country to country.
E)host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards.

Question 42

When expanding outside its domestic market,a company can gain competitive advantage by

A)not pursuing costly efforts to build multiple profit sanctuaries.
B)deliberately choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices),thus keeping costs and prices lower than rivals'.
C)using an export strategy to circumvent the risks of adverse exchange rate fluctuations.
D)using location to lower costs or help achieve greater product differentiation or using cross-border coordination in ways a domestic-only competitor cannot.
E)employing a multidomestic strategy instead of a global strategy.

Question 43

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations except

A)when high transportation costs make it expensive to operate from central locations.
B)if resources retain their foreign contexts so there is competitive advantage over a broader domain.
C)when it is desirable to hedge against (1)the risks of fluctuating exchange rates, (2)supply interruptions,or (3)adverse political developments.
D)if diseconomies of large size exist,thereby making it more economical to perform an activity on a smaller scale in several different locations.
E)whenever buyer-related activities are best performed in locations close to buyers.

Question 44

Which of the following is not a strategic option companies should consider in tailoring their strategy to fit circumstances of emerging country markets?

A)Try to change the local market to better match the way the company does business elsewhere.
B)Modify aspects of the company's business model to accommodate local circumstances.
C)Prepare to compete on the basis of low price.
D)Enter only those emerging markets that provide profit sanctuaries by offering opportunities for offensive strategies,such as preemptive strikes.
E)Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.

Question 45

Which of the following is an example of a modification in a particular company's business model to accommodate the unique local circumstances of developing countries?

A)Japan is known for its competitive strength in consumer electronics.
B)Home Depot could rely on its value propositions only in some developing countries.
C)Mahindra and Mahindra ranked number one in J.D.Power Asia Pacific's new-vehicle overall quality category.
D)Unilever developed a low-cost detergent,named Wheel,for the Indian market.
E)In China,Dell moved from its traditional Internet-based orders to orders over phone and fax.

Question 46

The ability of a multinational or global competitor to shift production from country to country to take advantage of exchange rate fluctuations,energy costs,wage rates,or changes in tariffs is an example of

A)a profit sanctuary.
B)cross-border coordination.
C)an international strategic alliance.
D)cross-market subsidization.
E)cross-market differences in cultural,demographic,and market conditions.

Question 47

The competitive strategy of a firm pursuing a think global,act local approach to strategy making

A)entails little or no strategy coordination across countries.
B)usually involves cross-subsidizing the prices in those markets where there are significant country-to-country differences in the product attributes that customers are most interested in.
C)involves selling a mostly standardized product worldwide but varying a company's use of distribution channels and marketing approaches to accommodate local market conditions.
D)is essentially the same in all country markets where it competes,but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.
E)involves having strongly differentiated product versions for different countries and selling them under distinctly different brand names (one for each country or group of neighboring countries)so that there will be no doubt in customers' minds that the product is more local than global.

Question 48

In competing in foreign markets,companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations,except when

A)there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations).
B)the costs of manufacturing or other activities are significantly lower in some geographic locations than in others.
C)certain locations have superior resources,allow better coordination of related activities,or offer other valuable advantages.
D)there are significant economies of scale in performing an activity.
E)the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

Question 49

Which of the following is not a typical option that companies have to consider in order to tailor their strategy to fit the circumstances of emerging country markets?

A)Prepare to compete on the basis of low price.
B)Be prepared to modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding).
C)Try to change the local market to better match the way the company does business elsewhere.
D)Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly.
E)Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.

Question 50

Which of the following is not a typical option that companies have to consider in order to tailor their strategy to fit the circumstances of emerging country markets?

A)Try to change the local market to better match the way the company does business elsewhere.
B)Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.
C)Change the local market to better match the way the company does business elsewhere.
D)Modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding).
E)Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly.

Question 51

The transnational approach of a firm using a think global,act local version of a global strategy entails

A)producing and marketing a variety of product versions under the same brand name,with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country.
B)little or no strategy coordination across countries.
C)pursuing the same basic competitive strategy theme (low-cost,differentiation,best-cost,focused)in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production,distribution,and marketing to be responsive to local market conditions.
D)selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries)so that buyers in each country market will think they are buying a locally made brand.
E)selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country)but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

Question 52

To use location to build competitive advantage when competing in both domestic and foreign markets,a company must

A)scatter its production plants across many different country markets so as to minimize the costs of shipping to its own distribution centers and/or wholesalers/retail dealers.
B)consider (1)whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations and (2)in which countries to locate particular activities.
C)concentrate buyer-related activities in a few well-chosen locations so as to maximize the capture of distribution-related economies of scale.
D)disperse both production and distribution activities across many nations in order to hedge against fluctuating exchange rates and lessen the risks of adverse political developments.
E)avoid selling in countries where there are high trade barriers or where buyers purchase in small quantities.

Question 53

To use location to build competitive advantage,a company that operates multinationally or globally must

A)employ either an export strategy or a franchising strategy.
B)scatter its production plants across many countries in different parts of the world so as to minimize transportation costs.
C)consider (1)whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2)in which countries to locate particular activities.
D)locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs.
E)concentrate all of its value chain activities in a single country-the one that has the best combination of low wage rates,low shipping costs,and low tax rates on profits.

Question 54

Briefly identify the major reasons a company may choose to expand outside its domestic market.

Question 55

A localized or multidomestic strategy

A)is generally preferable to a global strategy in situations where buyers are price sensitive because a "think local,act local" type of multidomestic strategy is better suited to achieving low unit costs than a global strategy.
B)involves much less adherence to using the same basic competitive strategy theme (low-cost,differentiation,best-cost,or focused)in all country markets.
C)is generally best suited for globally standardized industries,in which small country-by-country differences can be accommodated.
D)is generally inferior to a global strategy when it comes to pursuing product differentiation.
E)has two big drawbacks: (1)it hinders the transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities,and (2)it does not promote building a single,unified competitive advantage,especially one based on low cost.

Question 56

In which of the following circumstances is it not advantageous for a multinational competitor to concentrate its activities in a limited number of locations in order to build competitive advantage?

A)When the costs of performing certain value chain activities are significantly lower in certain geographic locations than in others
B)When a company has a competitively superior patented technology that it can license to foreign partners
C)When there is a steep learning or experience curve associated with performing an activity in a single location
D)When certain locations have superior resources,allow better coordination of related activities,or offer other valuable advantages
E)When there are significant economies of scale in performing the activity

Question 57

The drawbacks of a localized multidomestic strategy include

A)hindering the use of cross-market subsidization techniques and increasing company vulnerability to adverse shifts in currency exchange rates.
B)the difficulty in taking into account significant country-to-country differences in distribution channels and marketing methods.
C)the difficulty in and costs of being responsive to country-to-country differences in customer needs,buying habits,cultural traditions,and market conditions.
D)hindering the transfer of a company's competencies and resources across country boundaries and hindering the pursuit of a single,uniform competitive advantage in all country markets where a company operates.
E)being unsuitable for competing in the markets of emerging countries and posing added difficulty in building multiple profit sanctuaries.

Question 58

Televisa,a Mexican media company,became the world's most prolific producer of Spanish-language soap operas owing to its expertise in Spanish culture and linguistics.Which of the following strategies did Televisa employ to defend against global giants?

A)Use acquisition and rapid-growth strategies to better defend against expansion-minded international media companies.
B)Take advantage of aspects of the local workforce with which large international media companies may be unfamiliar.
C)Utilize keen understanding of local customer needs and preferences to create customized products or services.
D)Develop business models that exploit shortcomings in local media content distribution networks or infrastructure.
E)Transfer company expertise to cross-border markets and initiate actions to contend on an international level.

Question 59

Two major drawbacks of a think local,act local multidomestic strategy are

A)that it is especially vulnerable to fluctuating exchange rates and can usually be defeated by companies employing cross-market subsidization tactics.
B)excessive vulnerability to fluctuating exchange rates and having to craft a separate strategy for each country market in which the company competes.
C)hindering a company's transfer of competencies and resources across country boundaries (since somewhat different competencies and capabilities are likely to be employed in different host countries)and not promoting the building of a single,unified competitive advantage in all country markets where a company competes.
D)greater exposure to both increases in tariffs and restrictive trade barriers,and added difficulty in accommodating the diverse trade restrictions and regulatory requirements of host governments.
E)not being able to export products manufactured in one country to markets in other countries and being largely unsuitable for competing in the markets of emerging countries.

Question 60

Companies racing for global market leadership

A)generally have to consider establishing competitive positions in the markets of emerging countries.
B)are well advised to avoid all the risks and problems of competing in emerging country markets.
C)seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage compared to the domestic market leaders.
D)can usually be expected to earn sizable profits quickly in emerging country markets.
E)usually encounter very low barriers in entering the markets of emerging countries.

Question 61

Under what circumstances is it advantageous for a company competing in foreign markets to disperse certain internal processes across many countries?

Question 62

Explain and provide examples as to why the strategies of firms that expand internationally are usually grounded in home-country advantages or core competencies.

Question 63

Discuss in some detail the difference between a localized multidomestic strategy and a global strategy,and give the pros and cons of each.

Question 64

Discuss in some detail the difference between a multidomestic strategy and a global strategy.Give the pros and cons of each.

Question 65

What are the possible benefits and risks of using strategic alliances to try to enhance a company's ability to compete in foreign markets?

Question 66

Explain under what circumstances it becomes necessary for a multinational company to concentrate internal processes in a few locations.

Question 67

When is a global strategy superior to a multidomestic strategy?

Question 68

What circumstances call for use of a multidomestic strategy for competing in international markets?

Question 69

Identify and briefly describe any three of the five strategic options for entering foreign markets.

Question 70

A global strategy embraces the theme think global,act global,whereas a multidomestic strategy relies more on a think global,act local mentality.True or false? Explain.

Question 71

Explain the importance of competing in emerging markets.

Question 72

Identify and briefly explain two ways that multinational companies are able to use international operations to improve overall competitiveness.

Question 73

Briefly discuss why a domestic company desirous of entering foreign markets might see attractive advantages in forming strategic alliances with foreign companies.

Question 74

List and discuss three strategy options for competing in emerging markets.

Question 75

What are the primary country differences that shape strategy choices in international markets?