Deck 8: Looking at International Strategies

Question 1

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

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

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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 16

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

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

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

Question 19

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 20

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

Question 21

Global expansion can actually detract from corporate profitability.

Question 22

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

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

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

Question 26

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

Question 27

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

Question 28

Costs are minimal in early efforts to internationalize.

Question 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

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

Question 35

Coordination difficulties in international firms increase as international diversification increases.

Question 36

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

Question 37

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

Question 38

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

Question 39

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

Question 40

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

Question 41

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

Question 42

Stronghold assault creates a sustainable competitive advantage.

Question 43

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

Question 44

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

Question 45

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

Question 46

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

Question 47

Stronghold assault is a motivation for domestic investment.

Question 48

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

Question 49

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

Question 50

Limited scope economies are available to firms that expand globally.

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

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

Question 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

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

Question 62

Acquisitions typically provide the most rapid entry into a market.

Question 63

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

Question 64

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

Question 65

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

Question 66

Turnkey projects are examples of equity entry modes.

Question 67

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

Question 68

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

Question 69

Direct exports are an example of nonequity entry modes.

Question 70

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

Question 71

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

Question 72

Alliances are often chosen because of government regulations.

Question 73

The greenfield investment typically involves the greatest risk and time.

Question 74

Greenfield investments do not require any equity investment.

Question 75

Exporting is a popular internationalization vehicle with small firms.

Question 76

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

Question 77

Alliances tend to be the most expensive international entry tactic.

Question 78

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

Question 79

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

Question 80

Exporting may involve selling production or service inputs.