Question 1

In choosing one of the four basic strategies for competing in the global marketplace (international, global, multidomestic, transnational), the strategy that a company selects depends upon the degree of pressure that it is facing for revenues.

Accepted Answer

A) True 
 B)False

Question 2

A multidomestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

Accepted Answer

A) True 
 B)False

Question 3

Renault paid 1 billion USD to acquire a 25 percent ownership stake in the Russian automaker AvtoVAZ in 2008. Just one year later, Russian Prime Minister Vladimir Putin threatened to dilute the Renault ownership stake unless it contributed more money to prop up AvtoVAZ, which was then experiencing a significant slide in sales. This is an example of _____________ risk.

Accepted Answer

A) currency 
B) economic 
C) political 
D) management

Question 4

Expanding the global presence of a firm automatically increases its scale of operations.

Accepted Answer

A) True 
 B)False

Question 5

The trade among nations has increased dramatically in recent years, and it is estimated that by 2015 the trade ________ nations will exceed the trade _______ nations.

Accepted Answer

A) within; across 
B) across; within 
C) with; outside of 
D) above; within

Question 6

Rivalry is particularly intense in nations with conditions of strong consumer demand, strong supplier bases, and high new-entrant potential from related industries.

Accepted Answer

A) True 
 B)False

Question 7

Countries with a strong supplier base benefit by adding efficiency to downstream activities.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a reason for the rise in regional expansion?

Accepted Answer

A) increase in the number of trading blocs and free trade zones 
B) decrease in the number of trading blocs and free trade zones 
C) increasing national trade restrictions 
D) increasing local taxes and tariffs

Question 9

Wholly owned subsidiaries are least appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations.

Accepted Answer

A) True 
 B)False

Question 10

__________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries.

Accepted Answer

A) Joint ventures 
B) Strategic alliances 
C) Licensing agreements 
D) Wholly owned subsidiaries

Question 11

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

Accepted Answer

A) True 
 B)False

Question 12

GE Healthcare developed a portable, inexpensive ultrasound device for the emerging Chinese market. It expects to sell the device in the United States at a price cheap enough for every physician, paramedic, and emergency room nurse to purchase. This is an example of

Accepted Answer

A) total wage costs and indirect costs. 
B) risk reduction. 
C) reverse innovation. 
D) optimization of value-chain activity locations.

Question 13

In reviewing the Indian Software industry and the diamond of national advantage, which of the following is a relatively weak set of factors in the national competitive advantage in this industry?

Accepted Answer

A) U.S. demand conditions 
B) Factor endowments 
C) Domestic rivalry 
D) Domestic demand conditions

Question 14

According to The Economist article explained in Exhibit 7.1 in the textbook, the rate of GDP growth is the highest in the European Union and the United States.

Accepted Answer

A) True 
 B)False

Question 15

Exporting is an expensive way to enter foreign markets.

Accepted Answer

A) True 
 B)False

Question 16

Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.

Accepted Answer

A) True 
 B)False

Question 17

Two opposing pressures that managers face when they compete in foreign markets are cost reduction and adaptation to foreign markets.

Accepted Answer

A) True 
 B)False

Question 18

Because many countries are investing in countries other than their own, each country is becoming more autonomous and independent.

Accepted Answer

A) True 
 B)False

Question 19

By 2015, it is predicted that trade within nations will exceed trade across nations.

Accepted Answer

A) True 
 B)False

Question 20

Globalization is a term used to mean the growing dissimilarity of laws, rules, norms, values and ideas across countries.

Accepted Answer

A) True 
 B)False

Exam 7: International Strategy: Creating Value in Global Markets

In choosing one of the four basic strategies for competing in the global marketplace (international, global, multidomestic, transnational), the strategy that a company selects depends upon the degree of pressure that it is facing for revenues.

A multidomestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

Expanding the global presence of a firm automatically increases its scale of operations.

The trade among nations has increased dramatically in recent years, and it is estimated that by 2015 the trade __ nations will exceed the trade _ nations.

Rivalry is particularly intense in nations with conditions of strong consumer demand, strong supplier bases, and high new-entrant potential from related industries.

Countries with a strong supplier base benefit by adding efficiency to downstream activities.

Which of the following is a reason for the rise in regional expansion?

Wholly owned subsidiaries are least appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations.

__________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries.

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

GE Healthcare developed a portable, inexpensive ultrasound device for the emerging Chinese market. It expects to sell the device in the United States at a price cheap enough for every physician, paramedic, and emergency room nurse to purchase. This is an example of

In reviewing the Indian Software industry and the diamond of national advantage, which of the following is a relatively weak set of factors in the national competitive advantage in this industry?

According to The Economist article explained in Exhibit 7.1 in the textbook, the rate of GDP growth is the highest in the European Union and the United States.

Exporting is an expensive way to enter foreign markets.

Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.

Two opposing pressures that managers face when they compete in foreign markets are cost reduction and adaptation to foreign markets.

Because many countries are investing in countries other than their own, each country is becoming more autonomous and independent.

By 2015, it is predicted that trade within nations will exceed trade across nations.

Globalization is a term used to mean the growing dissimilarity of laws, rules, norms, values and ideas across countries.