Question 1

Strategic alliances tend to increase the risk associated with international expansion for the U.S.partner because of the greater dependence on the foreign firm.

Accepted Answer

A) True 
 B)False

Question 2

A multidomestic corporate-level strategy is one in which:

Accepted Answer

A)  a corporation chooses not to compete internationally but where there are a number of international competitors in the firm's local marketplace. 
B)  the firm produces a standardized product, but markets it differently in each country in which it competes. 
C)  the firm customizes the product for each country in which it competes. 
D)  the firm competes in a number of countries, but it is centrally coordinated by the home office.

Question 3

Michael Porter's determinants of national advantage describe factors associated with the firm's domestic environment that contribute to its dominance in a particular global industry.

Accepted Answer

A) True 
 B)False

Question 4

Although licensing is the least costly method to enter a foreign market, its disadvantages include high costs of transportation and low control over the marketing and distribution of goods.

Accepted Answer

A) True 
 B)False

Question 5

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:

Accepted Answer

A)  licensing. 
B)  exporting. 
C)  a strategic alliance. 
D)  a greenfield venture.

Question 6

An international diversification strategy is one in which a firm:

Accepted Answer

A)  expands into nearby markets. 
B)  expands into a potentially large number of geographic locations or markets. 
C)  expands into one or a few markets. 
D)  acquires a firm in a foreign country.

Question 7

In place of what historically were relatively stable and predictable domestic markets, firms across the globe find that they are now competing in relatively unstable and unpredictable global markets.

Accepted Answer

A) True 
 B)False

Question 8

The positive results associated with increasing international diversification have been shown to:

Accepted Answer

A)  continue as the level of international diversification increases. 
B)  level off and become negative as diversification increases past some point. 
C)  become negative quickly. 
D)  be centered in only one or two industries.

Question 9

Both the size and the nature of a country's domestic demand for a particular industry's good or service are important in Porter's determinants of national advantage.

Accepted Answer

A) True 
 B)False

Question 10

Evidence suggests that, in general, using an international cost leadership strategy when exporting to developed countries has the most positive effect on firm performance, while using an international differentiation strategy with larger scale when exporting to emerging economies leads to the greatest amount of success.

Accepted Answer

A) True 
 B)False

Question 11

Fluctuation in the value of different currencies is a major economic risk associated with international diversification.

Accepted Answer

A) True 
 B)False

Question 12

The increased pressures for global integration of operations have been driven mostly by:

Accepted Answer

A)  new low-cost entrants. 
B)  increasing demand for similar products. 
C)  increased levels of joint ventures. 
D)  the rise of governmental regulation.

Question 13

Effectively implementing the __________ international corporate-level strategy often produces higher performance than does implementing either the __________ or __________ strategies.

Accepted Answer

A)  multidomestic; global; transnational 
B)  global; multidomestic; transnational 
C)  cost leadership; differentiation; focus 
D)  transnational; multidomestic; global

Question 14

A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy.Instead, the actual strategic choices managers make may be the most compelling reasons for success or failure.

Accepted Answer

A) True 
 B)False

Question 15

In Porter's model, if a country has both __________ and __________ production factors, it is likely to serve an industry well by spawning strong home-country competitors that can also be successful global competitors.

Accepted Answer

A)  basic; advanced 
B)  advanced; generalized 
C)  basic; generalized 
D)  advanced; specialized

Question 16

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

Accepted Answer

A)  low-cost labor. 
B)  access to critical supplies. 
C)  access to customers. 
D)  avoidance of host country governmental regulations.

Question 17

Why do U.S.companies moving into the international market need to be sensitive to the need for local country or regional responsiveness?

Accepted Answer

A)  There is increasing rejection of American culture across much of the world. 
B)  The international consumer has become more sophisticated because of the Internet. 
C)  Consumer needs and desires, industry conditions, political and legal structures, and social norms vary by country. 
D)  International expansion brings an increasing loss of economies of scale.

Question 18

International associations such as the European Union, the Organization of American States, and the North American Free Trade Agreement encourage regionalization strategies rather than globalization.

Accepted Answer

A) True 
 B)False

Question 19

The four determinants in Porter's model of international competitive advantage include all of the following EXCEPT:

Accepted Answer

A)  factors of production. 
B)  demand conditions. 
C)  political and economic institutions. 
D)  related and supporting industries.

Question 20

Spotnick Enterprises is exploring options for entering into international markets.The key stakeholders have expressed that the primary concern is that Spotnick maintain the maximum amount of control possible in order to protect its proprietary technology.What type of entry would be best for Spotnick?

Accepted Answer

A)  An acquisition 
B)  Exporting 
C)  Licensing 
D)  A greenfield venture

Exam 8: International Strategy

Strategic alliances tend to increase the risk associated with international expansion for the U.S.partner because of the greater dependence on the foreign firm.

A multidomestic corporate-level strategy is one in which:

Michael Porter's determinants of national advantage describe factors associated with the firm's domestic environment that contribute to its dominance in a particular global industry.

Although licensing is the least costly method to enter a foreign market, its disadvantages include high costs of transportation and low control over the marketing and distribution of goods.

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:

An international diversification strategy is one in which a firm:

In place of what historically were relatively stable and predictable domestic markets, firms across the globe find that they are now competing in relatively unstable and unpredictable global markets.

The positive results associated with increasing international diversification have been shown to:

Both the size and the nature of a country's domestic demand for a particular industry's good or service are important in Porter's determinants of national advantage.

Fluctuation in the value of different currencies is a major economic risk associated with international diversification.

The increased pressures for global integration of operations have been driven mostly by:

Effectively implementing the international corporate-level strategy often produces higher performance than does implementing either the or __ strategies.

A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy.Instead, the actual strategic choices managers make may be the most compelling reasons for success or failure.

In Porter's model, if a country has both and production factors, it is likely to serve an industry well by spawning strong home-country competitors that can also be successful global competitors.

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

Why do U.S.companies moving into the international market need to be sensitive to the need for local country or regional responsiveness?

International associations such as the European Union, the Organization of American States, and the North American Free Trade Agreement encourage regionalization strategies rather than globalization.

The four determinants in Porter's model of international competitive advantage include all of the following EXCEPT: