Deck 8: Looking at International Strategies

Question 1

International expansion is a form of diversification because the firm has chosen to operate in a different market.

Answer 1

True

Question 2

All firms should think about the international dimensions of their business even if they have no international operations.

Answer 2

True

Question 3

A firm suffering from a liability of newness does not gain benefits from the learning curve.

Answer 3

True

Question 4

A good reason for a large corporation to consider global expansion is that new ideas are increasingly coming from emerging economies.

Question 5

Firms that are purely domestic should focus only on events within the domestic borders.

Question 6

Not all of the world's largest corporations are global.

Question 7

To address the strategic element of differentiators, a firm must decide whether it will use alliances or acquisitions as international entry strategies.

Question 8

Executives often make international strategy choices based on what competitors are doing instead of starting with answers to fundamental strategy diamond questions.

Question 9

A large corporation might consider global expansion simply because its competitors are globalizing.

Question 10

Some international activities are designed to augment a firm's business strategy, such as sourcing key factors of production to cheaper labor markets.

Question 11

A firm needs to consider its international strategy when any potential competitor is not domestic.

Question 12

There is little or no presence of small firms that are global very early in their business lives.

Question 13

A firm's international strategy is how it approaches the cross-border business activities of its own firm and competitors' at the present time and in the future.

Question 14

For a firm to succeed, it is not necessary for international strategy to be reflected in all five aspects of the firm's strategy diamond.

Question 15

To address the strategic element of economic logic, a firm must understand how it will expand into international markets.

Question 16

International expansion always provides a remedy for fulfilling corporate growth needs.

Question 17

Domestic strategy reflects the choices a firm's executives make with respect to sourcing and selling its
goods in foreign markets.

Question 18

Entering new businesses or new international markets can represent key elements of a firm's corporate strategy.

Question 19

To address the strategic element of arenas, a firm must understand what geographic areas it will enter internationally.

Question 20

To avoid being blindsided by an industry change, firms must keep an eye on rivals' international strategies.

Question 21

Firms in industries with declining R&D costs seek a larger revenue base, typically outside their home countries.

Question 22

Global expansion can actually detract from corporate profitability.

Question 23

Firms do not typically incur significant additional costs when diversifying their business operations around the globe.

Question 24

Performance gains from internationalization come at the early stages of internationalization.

Question 25

The costs associated with internationalization can offset the benefits of operating in multiple markets.

Question 26

Participating in international markets equates with having a competitive advantage to exploit international opportunities.

Question 27

Performance benefits from R&D increase with a firm's degree of internationalization.

Question 28

Costs are minimal in early efforts to internationalize.

Question 29

At very high levels of internationalization, firms tend to experience performance declines.

Question 30

Establishing a new business can put a new foreign division in a disadvantageous position relative to local foreign competitors.

Question 31

Liability of newness is a disadvantage that tends to increase as international diversification increases.

Question 32

The disadvantages a firm faces by not being a local player can be cultural and/or political.

Question 33

Over time, the negative influences of newness and foreignness tend to diminish.

Question 34

Bureaucratic and management costs actually decline at extreme levels of internationalization.

Question 35

International strategy must be aligned with corporate strategy in a manner that exploits firm resources and capabilities.

Question 36

The more country environments a firm must deal with, the greater the difficulty in coordination operations.

Question 37

International strategy affects a firm's economic logic through its implications for economies of scope and scale.

Question 38

The tradeoff between costs and benefits of internationalization results in a U-curve relationship between internationalization and firm performance.

Question 39

The four most important aspects of a firm's international strategy never contribute to its differentiators.

Question 40

Coordination difficulties in international firms increase as international diversification increases.

Question 41

Sharing knowledge across business units can uncover revenue-enhancement opportunities.

Question 42

The costs of different global value-chain activities are very similar.

Question 43

Firms generate more profits out of their R&D investments if they focus strictly on domestic markets.

Question 44

Scope economies are defined as the ability to lower average costs by sharing a resource across different products.

Question 45

Stronghold assault is a motivation for domestic investment.

Question 46

A firm that has operations in different countries has the opportunity to transfer knowledge from one market to another.

Question 47

Although economies of scale are possible as resources are shared across markets, strategy must be executed at the national level.

Question 48

A sustainable competitive advantage can be easily acquired and maintained through the use of arbitrage.

Question 49

Limited scope economies are available to firms that expand globally.

Question 50

When a firm can amortize R&D costs across many markets, it can, in effect, lower its average cost per sale.

Question 51

A basic five-forces analysis can be used to determine the importance of a given location.

Question 52

International expansion is actually a movement along a continuum from known markets to less-known markets.

Question 53

Strategically, the most important markets are those that offer an opportunity for innovation.

Question 54

The smaller the difference between the disconnected markets, the greater the profit potential arising from arbitrage.

Question 55

Small nationals can exploit opportunities for inter-business-unit collaboration.

Question 56

The larger scale that accompanies global expansion only creates competitive advantage if the firm translates scale into operating efficiency.

Question 57

A component of knowledge transfer learning is to locate a firm in a part of the world where competition is the weakest.

Question 58

The geographically diversified firm must learn to ensure that the benefits of being international outweigh the added infrastructure costs.

Question 59

International strategy affects a firm's economic logic through its implications for economies of scale and scope.

Question 60

Stronghold assault creates a sustainable competitive advantage.

Question 61

Foreign direct investment is often chosen because of the complexity of operating internationally.

Question 62

The use of international outsourcing has decreased significantly in recent years.

Question 63

Turnkey projects are examples of equity entry modes.

Question 64

Acquisitions typically provide the most rapid entry into a market.

Question 65

Sometimes alliances are necessary in order to include a proportion of local contact in a product.

Question 66

The CAGE Framework is particularly helpful in determining the arenas and vehicles for expanded internationally.

Question 67

All of the available entry vehicles have comparable degrees of risk and control.

Question 68

A critical element of international expansion is determining which vehicles to use.

Question 69

Licensing allows a firm to transfer the risk of implementing market entry to another firm.

Question 70

The greenfield investment typically involves the greatest risk and time.

Question 71

The main costs associated with exporting are transportation and research and development.

Question 72

Alliances tend to be the most expensive international entry tactic.

Question 73

Greenfield investments do not require any equity investment.

Question 74

Direct exports are an example of nonequity entry modes.

Question 75

The physical entry barriers to becoming an exporter are higher than ever before.

Question 76

The widespread diffusion of the Internet has provided the drive for the international outsourcing of services.

Question 77

Exporting is a popular internationalization vehicle with small firms.

Question 78

Minimum efficient scale is an explanation for the use of alliances as a foreign-entry tactic.

Question 79

Exporting may involve selling production or service inputs.

Question 80

Alliances are often chosen because of government regulations.