Deck 10: Globalization of Services

Question 1

A company that adopts the concept of importing customers usually is following a multiservice single-site strategy.
Multiple Choice

Answer 1

True

Question 2

Hedging is a strategy adopted by multinational corporations to neutralize their exposure to fluctuating currency exchange rates.

Answer 2

True

Question 3

The disadvantage of concentric diversification is that it does not allow for economies of scale.

Answer 3

False

Question 4

One of the advantages of franchising is that a firm can grow without the cost of developing key managers.

Question 5

Following its initial success, the Kinko copying service employed a diversified network expansion strategy.

Question 6

The start-up phase for a franchise business is shorter than that for an independent business, because of the existence of a well-known brand.

Question 7

A diversified network is a situation where many services are offered at a single location.

Question 8

Concentric diversification is a means of ensuring rapid market growth.

Question 9

Communication is included in the five C' s of strategic planning.

Question 10

Consumers develop expectations for a low divergent set of products and services from franchises.

Question 11

When a firm offers multiple services at a single location, it is using a clustered service strategy.

Question 12

A family restaurant is an example of a focused service.

Question 13

Franchising usually is used when developing a focused network.

Question 14

Rapid growth with investment capital from franchisers is the main objective of franchising.

Question 15

A diversified network is not feasible with complex services.

Question 16

From the standpoint of the franchiser, decision-making autonomy is not a benefit of franchising.

Question 17

American Express is an example of a firm that has a multisite, multiservice expansion strategy.

Question 18

The famous Mayo clinic in Minneapolis is an example of a firm that employs a clustered service strategy.

Question 19

A franchise is a low risk investment, because the franchiser ensures success.

Question 20

Network development is a consideration in the decision to plan a multinational service.

Question 21

When franchising which one of the following is not a benefit to the franchiser?

A) Proven business
B) Rapid expansion
C) Right to dictate conditions
D) Fees from the franchisee

Question 22

When franchising, which of the following is not an issue for the franchisee?

A) Establishing a brand
B) Franchise contract
C) Degree of discretion
D) Conflict resolution

Question 23

American Express, which offers financial and travel services on a global basis, is an example of a:

A) focused service.
B) focused network.
C) clustered service.
D) diversified network.

Question 24

Which of the following is not a benefit to the franchisee of a franchise?

A) Brand name
B) National advertising
C) Economics of scale
D) Autonomy

Question 25

Which of the following is not one of the major considerations in planning multinational operations?

A) Cultural transferability
B) Technological compatibility
C) Network development
D) Host government policy

Question 26

"Develop foreign customers" is a consideration for the global service strategy of "following your customers". The relevant globalization factor is:

A) cultural adoption.
B) customer contact.
C) complexity.
D) Customization.

Question 27

Global service strategies include all but one of the following:

A) Exporting services
B) Following your customers
C) Beating-the-clock
D) Service offshoring

Question 28

The "cookie-cutter" concept best describes which expansion strategy?

A) Focused service
B) Clustered service
C) Focused network
D) Diversified network

Question 29

"Hiring local personnel" addresses the labor intensity factor in the ________ global service strategy.

A) multicountry expansion
B) following your customers
C) service offshoring
D) beating the clock

Question 30

McDonald's includes beer on its menu for German franchises. This is an example of _______

A) cultural transferability.
B) network development.
C) host government policy.
D) labor norms.

Question 31

A relatively recent concept that refers to the movement of new products through existing distribution channels is called:

A) economies of scale.
B) economies of scope.
C) diversification.
D) micromarketing.

Question 32

What is the principal reason that service trade receives low priority at WTO meetings?

A) Controlling service trade is difficult.
B) Governments are more concerned with trade in manufactured products.
C) Service trade is an insignificant factor in international trade.
D) Tariffs cannot be applied to services.

Question 33

Multinational expansion by a service firm is:

A) often driven by customer demand.
B) vital for growth.
C) not recommended for labor intensive operations.
D) primarily a defense strategy.

Question 34

USAA, which provides financial services to military officers by mail, telephone, and Internet is an example of a:

A) focused service.
B) focused network.
C) clustered service.
D) diversified network.

Question 35

Mayo Clinic is a service firm that would fall under which of the following categories:

A) single location, single service.
B) single location, multiservice.
C) multisite, single service
D) mulitsite, multiservice

Question 36

All of the following are benefits of a multisite type of expansion except:

A) ability to reach a mass market quickly.
B) reduced financial risk from local economic downturn.
C) preemption of competitors by capturing premium locations.
D) retention of control.

Question 37

A 5:00 p.m. pickup for FedEx was not workable in Spain owing to extended business hours. This is an example of cultural adoption under which of the following global service strategies:

A) beating the clock.
B) service offshoring.
C) following your customers.
D) multicountry expansion.

Question 38

A community hospital is an example of a:

A) diversified network.
B) focused network.
C) focused service.
D) clustered service.

Question 39

Which of the following is not one of Kenichi Ohmae's five "Cs" of strategic planning in a borderless world economy?

A) Competitors
B) Creativity
C) Company
D) Country