Question 1

The problems associated with exporting include

Accepted Answer

A)  merging corporate cultures. 
B)  a partner's incompatibility. 
C)  difficulty in negotiating relationships. 
D)  high transportation costs and the expense of tariffs.

Question 2

In Porter's model, a specialized factor of production would include

Accepted Answer

A)  abundant natural resources. 
B)  a large workforce. 
C)  an extensive highway transportation system. 
D)  workers with advanced engineering skills.

Question 3

After a firm decides to compete internationally, it must select its strategy and choose a mode of entry into international markets.

Accepted Answer

A) True 
 B)False

Question 4

Walmart depends on its distribution, warehousing, logistics, and data management core competencies developed in domestic markets when entering international markets (Chapter 8 Strategic Focus).

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

As an indication of the importance of economies of scale, Ford Motor Company runs a single global business developing cars and trucks that can be built and sold through the world. By 2015, Ford intends for about 75% of the vehicles it sells to be variants of about 5 basic platforms.

Accepted Answer

A) True 
 B)False

Question 7

Disney suffered lawsuits in France at Disneyland Paris as a result of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of

Accepted Answer

A)  the effects of regionalization. 
B)  the risks of a multidomestic strategy. 
C)  the liability of foreignness. 
D)  the effect of demand conditions.

Question 8

International diversification is a strategy through which a firm expands the sale of its goods and services across borders of global regions and countries into a potentially large number of geographic locations of markets. Instead of entering one or a few markets, international diversification means that the firm enters multiple markets.

Accepted Answer

A) True 
 B)False

Question 9

A global corporate-level strategy assumes

Accepted Answer

A)  efficiency and customization can be achieved simultaneously. 
B)  a rise in income levels across the world. 
C)  increasing levels of cultural differences among nations. 
D)  more standardization of products across country markets.

Question 10

Coca Cola and PepsiCo approach international growth differently. Coca Cola is the world's largest snack-food producer and relies on overseas sales to make up for slower sales volumes in North America. In contrast, PepsiCo which is less diversified, derives only 32% of it sales from North America, an indication of the importance of international markets to its performance.

Accepted Answer

A) True 
 B)False

Question 11

The chief risks in the international environment are political and cultural.

Accepted Answer

A) True 
 B)False

Question 12

A transnational strategy is an international strategy in which the firm seeks to achieve both global efficiency and local responsiveness.

Accepted Answer

A) True 
 B)False

Question 13

A global corporate-level strategy differs from a multidomestic corporate-level strategy in that in a global strategy,

Accepted Answer

A)  competitive strategy is dictated by the home office. 
B)  competitive strategy is decentralized and controlled by individual strategic business units. 
C)  products are customized to meet the individual needs of each country. 
D)  the firm sells in multiple countries.

Question 14

Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model?

Accepted Answer

A)  Japanese cameras and copiers 
B)  Italian leather-processing and shoes 
C)  U.S. computers and software 
D)  Highway systems and the supply of debt capital

Question 15

Case Scenario 2: Heartsong LLC. 
Heartsong LLC is a designer and manufacturer of replacement heart valves based in Peoria, Illinois. While a relatively small company in the medical devices field, it has established a worldwide reputation as the provider of choice of high-quality, leading-edge artificial heart valves. Most of its products are sold to large regional hospital systems and research hospitals around the world, though primarily to customers in the U.S. and Europe. Specialty heart centers are another emerging, but fast-growing market for its valves. Heartsong has recently embarked on an expansion strategy that requires it to increase its volume, which in turn will demand more component parts than it can source domestically - both from an economic and volume standpoint. The firm has determined that such growth is only viable if it produces these parts itself overseas for a lower cost, or outsources the production entirely to a joint venture it establishes with a local manufacturer, which could both produce the parts more cheaply and in higher volumes. It is considering starting up an owned production facility in Luxembourg, or seeking a joint venture with a precision manufacturer in China.
-(Refer to Case Scenario 2) The advantages of a joint venture with a precision manufacturer in China is shared costs, shared resources, and shared risks, but there may be problems integrating the two corporate cultures.

Accepted Answer

A) True 
 B)False

Question 16

The Haier Group is an example of a firm using the multidomestic international corporate-level strategy as a means to build its global brand name (Chapter 8 Strategic Focus).

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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 18

The growing number of global competitors heightens the requirements to keep costs down and there is the desire for more specialized products to meet customer needs. These two pressures make transnational strategies increasingly necessary.

Accepted Answer

A) True 
 B)False

Question 19

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry which provides the leather needed to construct shoes and related products.

Accepted Answer

A) True 
 B)False

Question 20

The amount of diversification in a firm's international operations that can be managed varies from company to company and is affected by manager's abilities to deal with ambiguity and complexity.

Accepted Answer

A) True 
 B)False

Exam 8: Global Strategy

The problems associated with exporting include

In Porter's model, a specialized factor of production would include

After a firm decides to compete internationally, it must select its strategy and choose a mode of entry into international markets.

Walmart depends on its distribution, warehousing, logistics, and data management core competencies developed in domestic markets when entering international markets (Chapter 8 Strategic Focus).

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

As an indication of the importance of economies of scale, Ford Motor Company runs a single global business developing cars and trucks that can be built and sold through the world. By 2015, Ford intends for about 75% of the vehicles it sells to be variants of about 5 basic platforms.

Disney suffered lawsuits in France at Disneyland Paris as a result of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of

A global corporate-level strategy assumes

The chief risks in the international environment are political and cultural.

A transnational strategy is an international strategy in which the firm seeks to achieve both global efficiency and local responsiveness.

A global corporate-level strategy differs from a multidomestic corporate-level strategy in that in a global strategy,

Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model?

The Haier Group is an example of a firm using the multidomestic international corporate-level strategy as a means to build its global brand name (Chapter 8 Strategic Focus).

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

The growing number of global competitors heightens the requirements to keep costs down and there is the desire for more specialized products to meet customer needs. These two pressures make transnational strategies increasingly necessary.

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry which provides the leather needed to construct shoes and related products.

The amount of diversification in a firm's international operations that can be managed varies from company to company and is affected by manager's abilities to deal with ambiguity and complexity.