Question 1

When a firm initially pursues an international business-level strategy, the resources and capabilities established in the home country frequently allow the firm to pursue the strategy into markets located in other countries.

Accepted Answer

This statement is correct. In many cases, the resources and capabilities that a firm has developed in its home country can be leveraged to pursue international business-level strategies in other markets. This may include using established brand recognition, production capabilities, and distribution networks in new geographic locations. However, entering international markets may also require additional resources and capabilities specific to those markets.

Question 2

Multinational firms have many opportunities to learn from their experiences in international markets, but they must have a strong R&D system to absorb the knowledge.

Accepted Answer

Multinational firms can learn a lot from their experiences in international markets, but they need to have a strong research and development (R&D) system in place to absorb and apply that knowledge effectively. Without a strong R&D system, a firm may struggle to understand and adapt to the unique challenges and opportunities present in each market they enter. Therefore, the statement is true.

Question 3

The liability of foreignness is generally unaffected by the cultural distance between the two countries in an international transaction.

Accepted Answer

The liability of foreignness is actually affected by the cultural distance between the two countries. The higher the cultural distance, the greater the liability of foreignness. This is because cultural differences can create a greater sense of unfamiliarity and risk, which can make it more difficult for the foreign firm to navigate local regulations, customs, and business practices.

Question 4

The three corporate-level international strategies are cost leadership, differentiation, and focus.

Accepted Answer

The three corporate-level international strategies are multi-domestic, global, and transnational.

Question 5

As noted in the Opening Case, the Chinese market is attractive only for manufacturing firms such as those in the automobile industry.

Accepted Answer

The statement is false. While the Chinese market is attractive for manufacturing firms, it is also attractive for other industries such as technology, healthcare, and consumer goods.

Question 6

The "regionalization" environmental trend means that firms can focus on a region (customization) but also have some standardization or sharing within the region.

Accepted Answer

Regionalization allows firms to customize their offerings for a specific region while also standardizing or sharing certain aspects within that region. This trend can help companies better meet the unique needs and preferences of customers in different parts of the world while still achieving efficiency and economies of scale within a given market.

Question 7

It is generally easier to negotiate employee layoffs in Europe than in the United States because of the generous government-provided social services in Europe.

Accepted Answer

The answer of It is generally easier to negotiate employee...

Question 8

The "liability of foreignness" will have a greater negative impact on a firm using a multidomestic strategy than on a firm using a global strategy.

Accepted Answer

The answer of The "liability of foreignness" will have a...

Question 9

One reason why firms pursue international opportunities is to extend the product's life cycle.

Accepted Answer

When a product's life cycle reaches maturity or saturation in one market, firms look for new markets to extend the product's life cycle and generate additional revenues. Going global allows firms to tap into new markets and continue selling their products.

Question 10

The benefits of international diversification must be tempered by political and economic risks and the problems of managing a complex international firm with operations in multiple countries.

Accepted Answer

While international diversification can provide benefits such as access to new markets, it also involves political and economic risks that must be taken into account. Additionally, managing a complex multinational firm can be challenging and require specialized skills and resources.

Question 11

A multidomestic strategy uses a highly decentralized approach meaning that country managers have the autonomy to customize the firm's products as necessary to meet the needs and preferences of local customers.

Accepted Answer

A multidomestic strategy relies on decentralization, giving country managers the authority to make decisions and tailor products to meet localized demands.

Question 12

Many firms choose direct investment in assets in foreign countries (e.g., establishing new subsidiaries, making acquisitions, or building joint ventures) over direct investment because it provides better protection for their assets.

Accepted Answer

Direct investment in foreign assets such as establishing subsidiaries, acquisitions, or joint ventures in foreign countries provides better protection for firm's assets than direct investment.

Question 13

In the chapter Strategic Focus, SunTech's success has been attributed in part to country conditions such as the availability of low-cost manufacturing and the strong engineering talents in China.

Accepted Answer

The statement is true.

Question 14

International associations such as the European Union, the Organization of American States, and the North American Free Trade Association encourage regionalization of competition rather than globalization.

Accepted Answer

International associations like the ones mentioned often prioritize regional integration and competition rather than complete globalization. This is done to foster stronger political and economic ties between neighboring countries or regions.

Question 15

A transnational strategy is difficult to achieve because the multiple objectives involved are contradictory.

Accepted Answer

A transnational strategy involves balancing the conflicting goals of achieving global integration and local responsiveness, which can be difficult to achieve simultaneously. Therefore, the multiple objectives involved in a transnational strategy are contradictory, making it a challenging strategy to execute.

Question 16

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry which provides the leather needed to construct shoes and related products.

Accepted Answer

Italy's well-established leather-processing industry has contributed to the country's leadership in the shoe industry.

Question 17

Even if effectively implemented, the transnational strategy often produces lower performance than does the implementation of either the multidomestic or global strategies.

Accepted Answer

The answer of Even if effectively implemented, the transnational strategy...

Question 18

Having substantial supplies of critical basic natural resources is a necessary condition for a country to support businesses which can successfully compete in international markets.

Accepted Answer

The answer of Having substantial supplies of critical basic natural...

Question 19

A firm is more likely to invest R&D to build competitive advantage in smaller markets, even though those markets offer lower potential returns and pose more risk for the firm's investments.

Accepted Answer

The answer of A firm is more likely to invest...

Question 20

A global strategy assumes that the strategic business units operating in each country are interdependent and the home office attempts to achieve integration across these businesses.

Accepted Answer

A global strategy involves integrating the strategic business units operating in each country, assuming they are interdependent. The home office attempts to achieve integration across these businesses to achieve a common goal or objective.

Quiz 9: International Strategy Emea Edition