Question 1

A firm may narrow its focus to a specific region of the world:

Accepted Answer

Focusing on a specific region allows a firm to better understand the cultures, legal and social norms, and other factors that are important for effective competition in those markets. This knowledge can help the firm tailor its products and marketing strategies to better suit the local market and ultimately improve its chances of success.

Question 2

The transnational strategy is becoming increasingly necessary to compete in international markets for all the following reasons EXCEPT:

Accepted Answer

The statement "it is easy to use" is incorrect as the transnational strategy involves significant challenges and complexities, such as managing global supply chains, coordinating operations across multiple countries, and reconciling differences in cultural and regulatory environments.

Question 3

_________ is the set of costs associated with unfamiliar operating environments; economic, administrative and cultural differences; and the challenges of coordination over distances.

Accepted Answer

The set of costs described in the question is known as the liability of foreignness, which refers to the difficulties and costs that a firm faces when operating in a foreign country due to differences in economic, administrative, and cultural factors, as well as the challenges of coordinating activities over long distances. Transnational risk and international risk refer more broadly to the risks associated with operating in foreign markets, while regionalization refers to the trend towards greater economic integration within specific regions.

Question 4

A global strategy:

Accepted Answer

A global strategy lacks responsiveness to local markets because it tries to standardize operations across all countries, rather than adapt to local conditions. This can lead to ineffective marketing, product offerings, and customer service in different regions.

Question 5

All of the following are correct about what managers should know about firms based in a country with a national competitive advantage EXCEPT:

Accepted Answer

Success is not guaranteed for any firm, regardless of the country in which it operates or the national competitive advantages of that country. The actual strategic choices made by the firm are the most significant factors in determining its success or failure. The determinants of national competitive advantage can provide a foundation for a firm's competitive advantages, but it is up to the firm to leverage those advantages effectively. Therefore, option C is incorrect.

Question 6

Effectively implementing the ________ international corporate-level strategy often produces higher performance than does implementing either the _______ or _________ strategies.

Accepted Answer

The transnational international corporate-level strategy, which combines elements of both the multi-domestic and global strategies, is often seen as the most effective approach for global firms. This strategy seeks to achieve global efficiency, local responsiveness, and cross-border learning by balancing centralized control with decentralized autonomy. This balanced approach often leads to higher performance compared to the extreme approaches of either solely focusing on local responsiveness (multi-domestic) or solely focusing on global integration (global).

Question 7

All of the following are international corporate-level strategies EXCEPT the ____ strategy.

Accepted Answer

The three common international corporate-level strategies are global, multi-domestic, and transnational. Universal strategy is not a commonly used international corporate-level strategy, therefore it is the correct answer.

Question 8

A global corporate-level strategy differs from a multi-domestic corporate-level strategy in that in a global strategy:

Accepted Answer

The answer of A global corporate-level strategy differs from a...

Question 9

Disney suffered lawsuits in France at Disneyland Paris as a result of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of:

Accepted Answer

The situation described in the question relates to the liability of foreignness, which occurs when companies face difficulties in managing differences between their home country practices and the local practices of their foreign operations. In this case, Disney's personnel policies, which were successful in the United States, did not fit with the local French employees' expectations, leading to lawsuits. This is a common challenge for multinational corporations that operate in different cultural contexts.

Question 10

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are _________ and __________.

Accepted Answer

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are liability of foreignness and regionalization. Liability of foreignness refers to the additional costs and risks that firms face when operating in foreign markets due to unfamiliarity with local customs, regulations, and legal systems. Regionalization refers to the growing economic integration of specific regions, such as the European Union or NAFTA (North American Free Trade Agreement), which affects a firm's decision to pursue a global or regional strategy.

Question 11

Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ greatly from its home market, instead expanding within the twelve-nation region that includes its home country.  Which one of these is true?

Accepted Answer

The firm is using a regional approach to international expansion, as it is choosing to expand within a twelve-nation region that includes its home country. This indicates a level of international trade, but not on a global scale. Option A is incorrect since the firm is engaging in international trade to some extent. Option C is incorrect as the firm is limiting its expansion to regions it understands well. Option D is an unwarranted assumption and lacks any evidence in the given information.

Question 12

In China, Starbucks is standardizing its operations while simultaneously decentralizing some decision-making responsibility to local levels to meet customers' tastes. Starbucks is following the __________ international corporate-level strategy.

Accepted Answer

The transnational corporate-level strategy involves standardizing certain aspects of operations while also allowing for adaptation to local markets and decentralization of decision-making. This is exactly what Starbucks is doing in China, making A the best choice. The global strategy involves complete standardization of operations across all markets, while the differentiation strategy involves focusing on unique products and services. The multi-domestic strategy involves completely adapting to local markets with no standardization.

Question 13

Associations such as the European Union, Organization of American States, and the North American Free Trade Association, encourage:

Accepted Answer

The associations mentioned in the question (European Union, Organization of American States, and North American Free Trade Association) all promote regional strategies by encouraging cooperation and trade between countries within a specific region. They do not promote global strategies or nationalization, and it is not clear how they would encourage domestication. Therefore, the best choice is C, regional strategies.

Question 14

A multi-domestic corporate-level strategy is one in which:

Accepted Answer

A multi-domestic corporate-level strategy is one in which the firm customizes the product for each country in which it competes. This means that the firm adapts its product and marketing strategy to meet the specific needs and preferences of each local market, rather than applying a standardized approach across all countries. This allows the firm to better meet local demand and gain a competitive advantage in each market.

Question 15

A multi-domestic corporate-level strategy has ____ need for global integration and ____ need for local market responsiveness.

Accepted Answer

A multi-domestic strategy focuses on tailoring products and services to fit local markets, which requires high local market responsiveness and low global integration.

Question 16

A global corporate-level strategy assumes:

Accepted Answer

A global corporate-level strategy aims to create a standardized product that can be offered in multiple country markets with minimal customization. This approach assumes that there will be some level of homogeneity in consumer preferences and needs across these markets, and that a standardized product will be more efficient and cost-effective than customizing products for each individual market.

Question 17

A global corporate-level strategy emphasizes:

Accepted Answer

A global corporate-level strategy emphasizes achieving economies of scale by standardizing products and processes across different markets to reduce production costs and increase efficiency. This may involve centralizing control and closely monitoring operations to ensure consistency and maximize coordination. Differentiated products and sensitivity to local product preferences are more associated with a multi-domestic strategy, which emphasizes customization and decentralized decision-making. Decentralizing control and limited monitoring are more associated with a transnational strategy, which seeks to balance global integration and local responsiveness.

Question 18

Increasingly, customers worldwide are demanding emphasis on local requirements and companies require efficiency as global competition increases. This has triggered an increase in the number of firms using the ____ strategy.

Accepted Answer

The answer of Increasingly, customers worldwide are demanding emphasis on...

Question 19

In addition to the four basic dimensions of Porter's "diamond" model, ____ may also contribute to the success or failure of firms.

Accepted Answer

While all of these factors may have some impact, government policy can have a significant influence on the success or failure of firms in a particular industry or location. For example, favorable tax laws or subsidies can make it easier for firms to compete, while regulations or restrictions can make it more difficult.

Question 20

International corporate-level strategy focuses on:

Accepted Answer

International corporate-level strategy is concerned with expanding a company's activities beyond its home country by diversifying its products and entering new geographic markets. Hence, the focus is on the scope of operations through both product and geographic diversification. Choice B is not accurate as competition within each country is a part of business-level strategy. Choice C is too narrow as economies of scale is just one aspect of corporate-level strategy. Choice D is not relevant as monitoring and controlling systems form a part of implementation, which is not a focus of corporate-level strategy.

Quiz 8: International Strategy