Deck 11: International Strategies

Question 1

To the extent that customers outside a firm's domestic market are willing and able to buy a firm's current products or services, implementing an international strategy can directly increase a firm's revenues.

Answer 1

True

Question 2

Border levies are an example of tariffs.

Answer 2

True

Question 3

Different physical standards are more challenging than differences in tastes for firms looking to sell their products or services outside the domestic market.

Answer 3

False

Question 4

The increased use of international strategies by both large and small firms suggests that the economic opportunities associated with operating in multiple geographic markets can be substantial.

Question 5

International strategies are typically limited to just huge multinational companies.

Question 6

International strategies are actually a special case of business strategies.

Question 7

Hard currencies are currencies that are traded, and thus have value, on international money markets.

Question 8

In some international markets, adequate distribution networks exist but are tied up by new entrants to these markets.

Question 9

Distribution problems are typically limited to developing economies.

Question 10

Embargoes are an example of nontariff barriers.

Question 11

Differences in tastes can be a major challenge for firms looking to sell their products or services outside the domestic market.

Question 12

Japanese retail distribution has historically been much more fragmented, and much less efficient, than the system that exists in either the United States or Western Europe.

Question 13

The most obvious economy of scope that may motivate firms to pursue an international strategy is the potential new customers for a firm's current products or services that such a strategy might generate.

Question 14

Products and services that a firm sells in its domestic market will always also sell in foreign markets.

Question 15

In order for the basis of an international strategy to attract new customers, those products or services must address the needs, wants, and preferences of customers in foreign markets at least as well as, if not better than, alternatives.

Question 16

In 2012, more than 50 percent of General Motor's automobile sales came from outside the United States.

Question 17

Different physical standards can require a firm pursuing international opportunities to change its current products or services to sell them into a nondomestic market.

Question 18

Countervailing duties are an example of quotas.

Question 19

In 2012, about a third of Wal-Mart's sales revenues came from outside the United States.

Question 20

At some level, international strategies have existed since before the beginning of recorded time.

Question 21

Financial risks can be daunting when a firm first begins international operations.

Question 22

Local responsiveness can help firms be successful in addressing the local needs of nondomestic customers, thereby increasing demand for a firm's current products or services.

Question 23

Because the value of hard currencies can fluctuate in the world economy, firms can manage their currency risk by engaging in various hedging strategies in world money markets.

Question 24

The search for low labor costs has led some firms to engage in international strategies to gain access to low-cost labor.

Question 25

Growth is the third stage in the product life cycle.

Question 26

Learning from international operations is automatic.

Question 27

Unlearning requires a firm to modify or abandon traditional ways of engaging in business.

Question 28

In many ways, the transnational structure is similar to the centralized hub.

Question 29

Currency fluctuations can significantly affect the value of a firm's domestic investments.

Question 30

A multinational strategy exploits all the advantages of both international integration and local responsiveness.

Question 31

Hedging strategies reduce the political risks that firms assume when they enter into nondomestic markets.

Question 32

When international firms engage in countertrade, they receive payment for the products or services they sell into a country in the form of hard currency.

Question 33

Firms can maintain traditional arm's-length market relationship between themselves and their nondomestic customers and still implement international strategies.

Question 34

Government upheaval and the attendant risks to international firms are facts of life in some countries.

Question 35

In a decentralized federation, each country in which the firm operates is organized as a full profit-and-loss division headed by a division general manager who is typically the president of the company in a particular country.

Question 36

A product or service can be at different stages of its life cycle in different countries.

Question 37

Gaining access to new customers is, perhaps, the most traditional reason why firms begin international operations.

Question 38

The ability to learn from operations can be helped if managers perceive that there is too much to be learned.

Question 39

One of the most compelling reasons for firms to begin operations outside their domestic markets is to refine their current core competencies and to develop new core competencies.

Question 40

One estimate suggests that countertrade accounts for between 10 and 20 percent of world trade.

Question 41

Which one of the following is not a determinant of the ability of a firm to learn from its international operations?

A) the intent to learn
B) the transparency of business partners
C) receptivity to learning
D) the resources for learning

Question 42

Countervailing duties are an example of

A) quotas.
B) nontariff barriers acquisition.
C) tariffs.
D) countertrade.

Question 43

Improvements in the ________ infrastructure of business are one of the important contributors to the growth in the number of firms pursuing international strategies.

A) pecuniary
B) cultural
C) technological
D) corporate

Question 44

Which one of the following is not a potential source of economies of scope for firms pursuing international strategies?

A) to develop new core competencies
B) to manage corporate risk
C) to control countertrade
D) to gain access to low-cost factors of production

Question 45

A ________ strategy exploits all the advantages of both international integration and local responsiveness.

A) corporate
B) multinational
C) transnational
D) global

Question 46

Japanese retail distribution has historically been much more ________ than the system that exists in the United States or Western Europe.

A) closely held
B) fragmented
C) consolidated
D) open

Question 47

________ can help firms be successful in addressing the local needs of nondomestic customers, thereby increasing demand for a firm's current products or services.

A) Globalization
B) Internationalization
C) Target responsiveness
D) Local responsiveness

Question 48

International strategies are an example of ________ strategies.

A) corporate
B) business
C) functional
D) operational

Question 49

Variable levies are an example of

A) quotas.
B) tariffs.
C) nontariff barriers.
D) countertrade.

Question 50

One survey of CEOs from around the world reported that ________ percent of U.S. CEOs had no foreign experience.

A) 2
B) 14
C) 34
D) 64

Question 51

Embargoes are an example of

A) quotas.
B) tariffs.
C) nontariff barriers.
D) subsidies.

Question 52

The ability to develop detailed local knowledge of nondomestic markets may require firms to have management teams with a great deal of ________ experience.

A) foreign
B) technical
C) corporate
D) functional

Question 53

Different ________ standards can require a firm pursuing international opportunities to change its current products or services to sell them into a nondomestic market.

A) financial
B) operational
C) fiscal
D) physical

Question 54

One survey indicated that the foreign experience of ________ percent of U.S. CEOs was limited to vacation travel.

A) 14
B) 56
C) 48
D) 61

Question 55

Broad changes in the political situation in a foreign country is an example of political risk that affects the international strategies at the ________ level.

A) macro
B) micro
C) functional
D) cultural

Question 56

The second stage in the product life cycle is the ________ stage.

A) introduction
B) growth
C) maturity
D) decline

Question 57

________ requires a firm to modify or abandon traditional ways of engaging in business.

A) Unlearning
B) Learning
C) Relearning
D) Absorbing

Question 58

________ currencies are currencies that are traded, and thus have value, on international money markets.

A) Soft
B) Variable
C) Operational
D) Hard

Question 59

Even if direct duplication of a firm's international strategies is ________, ________ might still exist that limit the ability of that strategy to generate sustained competitive advantages.

A) costly; substitutes
B) inexpensive; substitutes
C) costly; fragmentation
D) inexpensive; fragmentation

Question 60

Hedging is a way to counter the ________ risks of doing business in foreign markets.

A) political
B) financial
C) cultural
D) business

Question 61

General Electric (GE) uses a ________ structure to manage its global operations.

A) transnational
B) centralized hub
C) decentralized federation
D) coordinated federation

Question 62

In a ________, strategic and operational decisions are delegated to divisions/country companies.

A) transnational structure
B) decentralized federation
C) coordinated federation
D) centralized hub

Question 63

Firms that have been successful in adopting the transnational structure include

A) Sony.
B) Disney.
C) Ford.
D) Nokia.

Question 64

Which one of the following is an example of the hierarchical governance option for firms pursuing international strategies?

A) mergers
B) exporting
C) licensing
D) joint ventures

Question 65

Which one of the following structural options combines a high level of both global integration and local responsiveness?

A) centralized hub
B) decentralized hub
C) transnational structure
D) coordinated federation

Question 66

Firms that seek to maximize international integration in their operations will typically opt for ________ structures.

A) transnational
B) decentralized federation
C) coordinated federation
D) centralized hub

Question 67

A firm implements a(n) ________ strategy when it diversifies its business operations across country boundaries.

A) functional
B) operational
C) international
D) transnational

Question 68

In a coordinated federation structure, shared activities and other cross-divisional/cross-country economies of scope are managed by the

A) country unit.
B) corporate center.
C) local unit.
D) country manager.

Question 69

In a ________ structure, operational decisions are delegated to division general managers/country presidents, but broader strategic decisions are made at corporate headquarters.

A) transnational
B) centralized hub
C) coordinated federation
D) decentralized federation

Question 70

Strategic alliances fall within the ________ governance option for firms pursuing international strategies.

A) corporate
B) market
C) intermediate market
D) hierarchical

Question 71

In a ________ structure, corporate staff functions are generally limited to the collection of accounting and other performance information from divisions/country companies and to reporting this aggregate information to appropriate government officials and to the financial markets.

A) transnational
B) decentralized federation
C) centralized hub
D) coordinated federation

Question 72

Firms that attempt to optimize both local responsiveness and international integration will choose a ________ organizational structure.

A) centralized hub
B) transnational
C) coordinated federation
D) decentralized federation

Question 73

Exporting is a form of

A) intermediate market governance.
B) hierarchical governance.
C) vertical governance.
D) market governance.

Question 74

In many ways, the transnational structure is similar to the

A) coordinated federation.
B) centralized hub.
C) decentralized federation.
D) decentralized hub.

Question 75

Acquisitions are an example of the ________ governance option for firms pursuing international strategies.

A) market
B) hierarchical
C) corporate
D) intermediate market

Question 76

Which one of the following is not a structural option for firms pursuing international strategies?

A) corporate federation
B) decentralized federation
C) transnational structure
D) centralized hub

Question 77

Firms that seek to maximize their local responsiveness will tend to choose a ________ structure

A) transnational
B) centralized hub
C) decentralized federation
D) coordinated federation

Question 78

The role of corporate headquarters in a ________ is to constantly scan business operations across different countries for resources and capabilities that might be a source of competitive advantage for other divisions/country companies in the firm.

A) centralized hub
B) coordinated federation
C) decentralized federation
D) transnational structure

Question 79

Firms that seek to balance the need for local responsiveness and international integration will typically choose ________.

A) centralized federations
B) transnational structures
C) decentralized federations
D) matrix structures

Question 80

Toyota is an example of a firm that uses the ________ structure.

A) centralized hub
B) transnational
C) decentralized federation
D) coordinated federation