Question 1

All of the following are reasons that global firms like Acer and GE have established facilities in South Africa EXCEPT ________.
A) low tax rates
B) minimal corruption
C) excellent infrastructure
D) lack of labor regulation

Accepted Answer

The lack of labor regulation is not a reason that global firms like Acer and GE have established facilities in South Africa. The other options listed (low tax rates, minimal corruption, and excellent infrastructure) are all factors that may attract multinational corporations to operate in a particular location.

Question 2

The planning phase of the strategic management process consists of all of the following EXCEPT ________.
A) clarifying the company's mission
B) establishing an organizational structure
C) assessing the external environment
D) performing a SWOT analysis

Accepted Answer

The planning phase of the strategic management process includes clarifying the company's mission, assessing the external environment, and performing a SWOT analysis. However, establishing an organizational structure is typically part of the organizing phase of the process.

Question 3

The second part of the strategic management process is known as the ________.
A) implementation phase
B) evaluation stage
C) planning phase
D) analysis stage

Accepted Answer

The second part of the strategic management process is the implementation phase, which involves putting the chosen strategy into action through specific actions and initiatives. The planning phase comes first, during which goals and objectives are established and various strategies are developed and evaluated. The analysis stage is a part of both the planning and implementation phases, as it involves analyzing internal and external factors to determine strengths, weaknesses, opportunities, and threats. The evaluation stage comes last, during which the effectiveness of the implemented strategy is assessed and adjustments are made as necessary.

Question 4

Recent problems for Cemex, the Mexican cement giant, were most likely caused by all of the following EXCEPT ________.
A) tightened trade barriers
B) weakened value of the peso
C) aggressive global expansion
D) decline in construction industry

Accepted Answer

Tightened trade barriers are not listed as a factor that has caused recent problems for Cemex. The weakened value of the peso, aggressive global expansion, and decline in the construction industry are all mentioned as potential causes.

Question 5

The most likely reason that McDonald's has aggressively expanded internationally is to ________.
A) reduce labor costs
B) find new financing sources
C) establish economies of scale
D) overcome restricted domestic growth opportunities

Accepted Answer

McDonald's has faced limited growth opportunities in its domestic market due to intense competition and saturation. Therefore, the company has looked to international markets for expansion to continue its growth trajectory.

Question 6

Which of the following terms refers to the basic means by which a company competes: its choice of business in which it operates and how it differentiates itself from its competitors?
A) mission
B) procedure
C) strategy
D) process

Accepted Answer

The term that refers to a company's choice of business and differentiation from competitors is its strategy. A company's mission is its overall purpose, while a procedure and process are specific steps or methods used to accomplish a task.

Question 7

All of the following are proactive reasons that firms expand their operations overseas EXCEPT ________.
A) availability of raw materials
B) demands of foreign customers
C) low labor costs for production workers
D) growth opportunities in emerging markets

Accepted Answer

This answer does not align with proactive reasons for firms to expand overseas, as it is reactive to existing demand rather than a proactive strategy. A, C, and D are examples of proactive reasons for expanding overseas, as they involve the pursuit of cost savings or new growth opportunities that can be achieved through overseas expansion.

Question 8

All of the following are common examples of government incentives used to attract foreign investment EXCEPT ________.
A) loans
B) tax holidays
C) use of property
D) minimum wage reductions

Accepted Answer

Minimum wage reductions are not typically used as a government incentive to attract foreign investment, as they can result in negative repercussions for domestic workers and the economy as a whole. Common examples of government incentives used to attract foreign investment include offering loans, tax holidays, and use of property at reduced rates.

Question 9

The process by which a firm's managers evaluate the future prospects of the firm and decide on appropriate strategies to achieve long-term objectives is called ________.
A) strategic planning
B) internal resource analysis
C) environmental scanning
D) product planning

Accepted Answer

Strategic planning is the process of evaluating a firm's future prospects and deciding on long-term objectives and appropriate strategies to achieve those objectives. Internal resource analysis, environmental scanning, and product planning are all components of strategic planning but do not fully encompass the entire process.

Question 10

Which of the following charts the direction of the company and provides a basis for strategic decision making?
A) environmental assessment
B) corporate structure
C) organizational mission
D) SWOT analysis

Accepted Answer

The organizational mission provides a company's purpose, direction, and overall goals which serve as a basis for strategic decision making. The environmental assessment is a tool to assess the external factors affecting the company, the corporate structure defines the hierarchy and reporting relationships within the company, and the SWOT analysis is a framework for analyzing the company's strengths, weaknesses, opportunities, and threats. While all of these are important aspects of a company's strategy, the organizational mission is the most critical for providing direction and guiding decision making.

Question 11

When Disney decided to build a park in Paris, the French government gave Disney prime farm land just outside the city limits. This is most likely an example of a firm expanding overseas due to ________.
A) globalization of competitors
B) restrictive trade barriers
C) home country regulations
D) monetary incentives

Accepted Answer

The French government providing prime farm land as an incentive indicates that Disney expanded overseas due to monetary incentives offered by the foreign government.

Question 12

Experts suggest that significant changes in the competitive nature of international business have most likely occurred because of ________.
A) terrorism and technology
B) globalization and the Internet
C) trade and foreign direct investment
D) foreign direct investment and the EU

Accepted Answer

Globalization and the Internet have allowed for increased connectivity and competition among businesses worldwide. It has facilitated the movement of goods, services, and information across borders, leading to a more competitive international business environment. The development of technology has also allowed companies to operate on a global scale with greater ease, leading to increased competition.

Question 13

Which of the following is a proactive reason that prompts firms to expand overseas?
A) avoiding restrictive trade barriers
B) solving logistical problems
C) responding to foreign competitors
D) seeking economies of scale

Accepted Answer

Seeking economies of scale is a proactive reason for expanding overseas because it involves a deliberate effort to achieve cost advantages by operating on a larger scale and realizing greater efficiencies in production and distribution. This is different from avoiding trade barriers, responding to competitors, or solving logistical problems, which are often reactive reasons that firms expand overseas in response to external pressures or challenges.

Question 14

Which of the following best explains why Avon expanded to the international market?
A) increased domestic competition in the door-to-door cosmetic industry
B) increased number of American women in the workforce
C) decreased restrictions on cosmetics in the Chinese market
D) decreased number of qualified sales representatives in the U.S.

Accepted Answer

The answer of Which of the following best explains why...

Question 15

Which of the following best explains why South Africa attracts global firms?
A) highly skilled workers
B) stable exchange rate
C) good credit access
D) low crime rate

Accepted Answer

South Africa attracts global firms due to its relatively good credit access, which facilitates business operations and investments.

Question 16

Which of the following is a true statement about the strategic formulation process?
A) Domestic strategic formulation is more difficult than global strategic formulation.
B) The strategic formulation process is an aspect of a firm's strategic management process.
C) Strategic formulation consists of four defined stages that occur in a consecutive order.
D) Most firms operate on planning cycles of ten or more years with periodic strategy reviews.

Accepted Answer

The strategic formulation process is one of the key components of a firm's strategic management process. It involves analyzing the external and internal environment, identifying strategic options, evaluating and selecting the most appropriate strategy, and developing an action plan to implement the chosen strategy. The process may not necessarily consist of four defined stages or operate on planning cycles of a specific length, and the difficulty of domestic versus global strategic formulation can vary depending on the particular industry and market conditions.

Question 17

Which of the following best explains why Europe is attracting more new investment capital?
A) low labor costs in both Eastern and Western Europe
B) the opening of new markets in Eastern Europe
C) unstable currency exchange rates in Asia
D) inadequate infrastructure in South Africa

Accepted Answer

The opening of new markets in Eastern Europe has made it more attractive for investment capital to flow into Europe.

Question 18

Restrictive trade barriers most likely affect corporate globalization by encouraging firms to ________.
A) develop joint ventures with local firms
B) import supplies from foreign vendors
C) expand the exportation of raw materials
D) switch from exporting to overseas manufacturing

Accepted Answer

Restrictive trade barriers make it difficult for firms to export goods, so they may opt to shift their manufacturing or production to foreign locations as a way to avoid those barriers.

Question 19

What is the most likely effect of costly regulations and restrictions enforced by a firm's home government?
A) Firms search for less restrictive operating environments overseas.
B) Firms respond to customer demands more promptly.
C) Firms become entangled in lengthy litigation.
D) Firms expand their domestic operations.

Accepted Answer

Costly regulations and restrictions enforced by a firm's home government can make it difficult and expensive for firms to operate domestically. As a result, firms may search for less restrictive operating environments overseas where they can operate more efficiently and cost-effectively.

Question 20

Which of the following is the most common reactive reason for a firm to extend its operations overseas?
A) tax incentives
B) economies of scale
C) globalization of competitors
D) research and development needs

Accepted Answer

Globalization of competitors is a reactive reason as firms often expand overseas to maintain competitiveness when their rivals do so.

Quiz 6: Formulating Strategy

All of the following are reasons that global firms like Acer and GE have established facilities in South Africa EXCEPT ________.

The planning phase of the strategic management process consists of all of the following EXCEPT ________.

The second part of the strategic management process is known as the ________.

Recent problems for Cemex, the Mexican cement giant, were most likely caused by all of the following EXCEPT ________.

The most likely reason that McDonald's has aggressively expanded internationally is to ________.

Which of the following terms refers to the basic means by which a company competes: its choice of business in which it operates and how it differentiates itself from its competitors?

All of the following are proactive reasons that firms expand their operations overseas EXCEPT ________.

All of the following are common examples of government incentives used to attract foreign investment EXCEPT ________.

The process by which a firm's managers evaluate the future prospects of the firm and decide on appropriate strategies to achieve long-term objectives is called ________.

Which of the following charts the direction of the company and provides a basis for strategic decision making?

When Disney decided to build a park in Paris, the French government gave Disney prime farm land just outside the city limits. This is most likely an example of a firm expanding overseas due to ________.

Experts suggest that significant changes in the competitive nature of international business have most likely occurred because of ________.

Which of the following is a proactive reason that prompts firms to expand overseas?

Which of the following best explains why Avon expanded to the international market?

Which of the following best explains why South Africa attracts global firms?

Which of the following is a true statement about the strategic formulation process?

Which of the following best explains why Europe is attracting more new investment capital?

Restrictive trade barriers most likely affect corporate globalization by encouraging firms to ________.

What is the most likely effect of costly regulations and restrictions enforced by a firm's home government?

Which of the following is the most common reactive reason for a firm to extend its operations overseas?