Question 1

In considering the transnational strategy, Nestle evaluates the limits of decentralization. The closer they are to the consumer in activities such as branding and pricing, the more they tend to decentralize. The more they deal with production and logistics, the more they centralize decision-making. The production and logistics decisions involve ________ activities.
A) upstream
B) in its infrastructure
C) downstream
D) midstream

Accepted Answer

Production and logistics decisions involve upstream activities, which include sourcing raw materials, manufacturing, and distribution. Downstream activities, on the other hand, involve activities that are closer to the consumer, such as branding, advertising, and pricing.

Question 2

Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?
A) firms that compete in industries in which consumer preferences vary substantially in each country
B) firms in industries that are expanding very rapidly
C) firms in industries that have value added by sales and marketing departments
D) firms in industries that have much value added in research and design or manufacturing

Accepted Answer

Firms in industries that have much value added in research and design or manufacturing are most likely to benefit from a global strategy as opposed to a multidomestic strategy. These firms can achieve economies of scale by leveraging their R&D and manufacturing capabilities across different locations, and can also benefit from a more specialized and efficient global supply chain. Preferences of consumers can be relatively similar across different countries for such industries, hence a global strategy would be more appropriate.

Question 3

Which one of the following is nota strength of transnational strategies?
A) ability to attain economies of scale
B) ability to adapt to local markets
C) ability to locate activities in optimal locations
D) ability to decrease knowledge flows and learning

Accepted Answer

Transnational strategies are known for their ability to attain economies of scale, adapt to local markets, and locate activities in optimal locations. However, decreasing knowledge flows and learning is not a strength of transnational strategies, as it can limit the organization's ability to learn from different locations and adapt to changing market conditions.

Question 4

Which one of the following is not a limitation of a global strategy?
A) limited ability to adapt to local markets
B) the ability to locate activities in optimal locations
C) the concentration of activities may increase dependence on a single facility
D) single locations may lead to higher tariffs and transportation costs

Accepted Answer

The ability to locate activities in optimal locations does not represent a limitation of a global strategy, but rather a benefit. Global companies are able to strategically locate their production, distribution, and service facilities in the most advantageous locations around the world based on a variety of factors such as cost, proximity to markets, and availability of resources. The other options are limitations of a global strategy, including the limited ability to adapt to local markets, the concentration of activities leading to dependence on a single facility, and the potential for higher tariffs and transportation costs due to single locations.

Question 5

Which of the following is not a risk associated with a global strategy?
A) A firm with only one manufacturing location must export its product, sometimes at great distance from the operation.
B) The geographic concentration of any activity may also tend to isolate that activity from the targeted markets.
C) Concentrating an activity in a single location makes the rest of the firm dependent on that location.
D) The pressures for local adaptation may elevate the cost structure of the firm.

Accepted Answer

Some risks associated with a global strategy include:if a firm has only one manufacturing facility, it must export its output to other markets, some of which may be a great distance from the operation; the geographic concentration of any activity may also tend to isolate that activity from the targeted markets and; concentrating an activity in a single location also makes the rest of the firm dependent on that location.

Question 6

Firms following a global strategy strive to offer ________ products and services as well as locate manufacturing, research and development, and marketing activities in a limited numberoflocations.
A) widely differentiated
B) more expensive local
C) internationally differentiated
D) standardized

Accepted Answer

Firms following a global strategy strive to offer standardized products and services to promote efficiency in manufacturing, reduced costs, and a higher level of quality. They also locate manufacturing, research and development, and marketing activities in a limited number of locations to reap the benefits of economies of scale.

Question 7

Which would be the appropriate strategy for companies to use to compete in the global marketplace if both the pressures to lower costs and adapt locally are low?
A) international strategy
B) global strategy
C) multidomestic strategy
D) transnational strategy

Accepted Answer

An international strategy would be the best pure choice for a company to make in its quest to compete in the global marketplace if both the pressures to lower costs and adapt locally are low.

Question 8

Which one of the following explains why so few firms are global?
A) Culture, language, and religion are similar between countries.
B) Legal and political systems are similar between countries.
C) Governments are increasing trade restrictions in general.
D) Geographic distance is multiplied by distance in culture, language, religion, and legal and political systems.

Accepted Answer

Geographic distance is often multiplied by differences in culture, language, religion, legal and political systems, making it difficult for firms to expand globally. Additionally, firms may face significant barriers in meeting regulatory requirements in different countries which can limit their ability to operate on a global scale.

Question 9

Limitations of transnational strategies include all the following except
A) unique challenges in determining optimal locations of activities to ensure cost .
B) unique managerial challenges in fostering knowledge transfer.
C) unique ability to adapt to local markets.
D) unique challenges in determining optimal locations of activities to ensure quality.

Accepted Answer

The limitations of transnational strategies include challenges in determining optimal locations for cost and quality, as well as managerial challenges in fostering knowledge transfer. However, transnational strategies are known for their ability to adapt to local markets, so that is not considered a limitation.

Question 10

Panasonic entered the market in China and found that it needed to balance global integration with local adaptation. It set up a Lifestyle Research Center in China to interpret data oncustomer wants and needs. This is an example of a company using ________ strategy.
A) an international
B) amultidomestic
C) a single country
D) a transnational

Accepted Answer

A transnational strategy strives to optimize the trade-offs associated with efficiency, local adaptation, and learning. It recognizes the importance of local responsiveness as a tool for flexibility in international operations. Panasonic embraced the need to balance global integration with local adaptation. It set up a Lifestyle Research Center in China. In this center, marketing and product development staff compiled and interpreted data on customer wants and needs. Their charge was to uncover hidden needs in the Chinese market and design products to meet those needs. At the same time, country managers emphasized the need for the center staff to design products that benefited from global integration.

Question 11

Trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following except
A) customer needs, interests, and tastes becoming increasingly homogenized.
B) consumers around the world increasingly willing to trade preferences in product features for lower price.
C) manufacturing trends allowing a decline in the minimum volume required to reach acceptable levels of production efficiency.
D) fluctuating exchange rates.

Accepted Answer

A decentralized strategy such as that seen within the multidomestic organization, allows for greater adaptation at the local level, which would not be necessary if customers were becoming more homogeneous.

Question 12

To meet market needs companies sometimes change product names so that the name in the local language is culturally meaningful. This is an example of a company using ________ strategy.
A) an international
B) amultidomestic
C) a single country
D) a transnational

Accepted Answer

In a multidomestic strategy, companies customize their products, services, and marketing campaigns to meet the unique needs of each local market. Changing product names to be culturally meaningful in a specific local language fits with this approach.

Question 13

High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy?
A) global strategy
B) multidomestic strategy
C) transnational strategy
D) overall cost leadership strategy

Accepted Answer

A multidomestic strategy is used in industries where the pressure for local adaptation is high and the pressure for lowering costs is low.

Question 14

When differentiating products and services to local markets, strategies and tactics are likely to ________ company costs.
A) decrease
B) increase
C) obliterate
D) decentralize

Accepted Answer

Differentiating products and services to local markets require additional resources such as research, development, marketing, and distribution efforts which increases company costs.

Question 15

In the quest to achieve competitive advantage in global markets, competitive pressures require that firms do what they can to ________ unit costs so that consumers will not perceive theirproduct and service offerings as too expensive.
A) raise
B) decentralize
C) define
D) lower

Accepted Answer

To avoid being perceived as too expensive, firms need to lower their unit costs, which can be achieved through various methods such as improving efficiency, reducing waste, and leveraging economies of scale.

Question 16

Green tea Oreos in China, chocolate and peanut butter Oreos in Indonesia, and banana dulce de leche Oreos in Argentina are examples of Kraft using ________ strategy.
A) an international
B) amultidomestic
C) a single country
D) a transnational

Accepted Answer

Kraft using different flavors of Oreos in different countries is an example of a multi-domestic strategy. This strategy involves customizing products and strategies to meet the unique needs and preferences of each individual market. Kraft is tailoring its products to local tastes in each country, which is a hallmark of a multi-domestic strategy.

Question 17

Which of the following is a reason for the rise in regional expansion?
A) increase in the number of trading blocs and free trade zones
B) decrease in the number of trading blocs and free trade zones
C) increasing national trade restrictions
D) increasing local taxes and tariffs

Accepted Answer

The rise in regional expansion can be attributed to an increase in the number of trading blocs and free trade zones. This has led to the formation of regional economic integration and cooperation, promoting trade and investment among neighboring countries.

Question 18

As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may facilitate the competitive advantage of differentiation by
A) increased freedom of individual business units to adapt to local tastes.
B) the creation of a worldwide network to achieve consistent service regardless of location.
C) flexibility in applying research and development to meet country-specific needs.
D) tailoring products to meet country-specific needs.

Accepted Answer

One advantage of a global strategy is that it can enable a firm to create a standard level of quality throughout the world. Tom Siebel, former chairman of Siebel Systems (now part of Oracle), e-business application software developer, says that his customers, global companies like IBM, Zurich Financial Services, and Citicorp, expect the same high level of service and quality, and the same licensing policies, no matter where they do business with them around the world.

Question 19

Industries in which proportionally more value is added in ________ activities are more likely to benefit from a global strategy.
A) downstream
B) upstream
C) marketing
D) sales

Accepted Answer

Industries in which proportionally more value is added in upstream activities (such as raw material extraction, production, and logistics) are more likely to benefit from a global strategy because these activities often require significant investments in infrastructure and technology, and can benefit from economies of scale and scope that may be available in different regions or countries. Downstream activities (such as marketing, sales, and distribution) tend to be more location-specific and dependent on local knowledge and cultural understanding, making it more difficult to implement a standardized global strategy.

Question 20

To be responsive to local pressures, companies must ________ their offerings and strategies from country to country to reflect local consumer preferences.
A) internationalize
B) globalize
C) differentiate
D) standardize

Accepted Answer

Differentiating offerings and strategies allows companies to tailor their approach to meet the unique preferences of consumers in different countries. This approach acknowledges that one size does not fit all, and that customization is often required to effectively penetrate different markets. Introducing international or global elements may not always be effective in addressing local pressures or satisfying local demand. Standardizing, on the other hand, may allow companies to reap economies of scale, but at the expense of local responsiveness.

Quiz 7: International Strategy Creating Value in Global Markets

Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?

Which one of the following is nota strength of transnational strategies?

Which one of the following is not a limitation of a global strategy?

Which of the following is not a risk associated with a global strategy?

Firms following a global strategy strive to offer ________ products and services as well as locate manufacturing, research and development, and marketing activities in a limited numberoflocations.

Which would be the appropriate strategy for companies to use to compete in the global marketplace if both the pressures to lower costs and adapt locally are low?

Which one of the following explains why so few firms are global?

Limitations of transnational strategies include all the following except

Panasonic entered the market in China and found that it needed to balance global integration with local adaptation. It set up a Lifestyle Research Center in China to interpret data oncustomer wants and needs. This is an example of a company using ________ strategy.

Trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following except

To meet market needs companies sometimes change product names so that the name in the local language is culturally meaningful. This is an example of a company using ________ strategy.

High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy?

When differentiating products and services to local markets, strategies and tactics are likely to ________ company costs.

In the quest to achieve competitive advantage in global markets, competitive pressures require that firms do what they can to ________ unit costs so that consumers will not perceive theirproduct and service offerings as too expensive.

Green tea Oreos in China, chocolate and peanut butter Oreos in Indonesia, and banana dulce de leche Oreos in Argentina are examples of Kraft using ________ strategy.

Which of the following is a reason for the rise in regional expansion?

As in the case of Siebel Systems (now part of Oracle) , elements of a global strategy may facilitate the competitive advantage of differentiation by

Industries in which proportionally more value is added in ________ activities are more likely to benefit from a global strategy.

To be responsive to local pressures, companies must ________ their offerings and strategies from country to country to reflect local consumer preferences.