Question 1

Identify and briefly discuss the key reasons why a company may consider expanding outside its domestic market.

Accepted Answer

The answer of Identify and briefly discuss the key reasons...

Question 2

Companies that compete on an international basis have a competitive advantage over their purely domestic rivals:

Accepted Answer

Companies that compete on an international basis have another source of competitive advantage relative to their purely domestic rivals: They are able to benefit from coordinating activities across different countries' domains.

Question 3

Briefly identify the special features of competing in foreign markets.

Accepted Answer

The answer of Briefly identify the special features of competing...

Question 4

What does the World Trade Organization (WTO)NOT do primarily?

Accepted Answer

As the trade among nations has mushroomed over the past 10 years, most governments have joined the World Trade Organization (WTO), which promotes fair trade practices among nations and actively polices dumping. Companies deemed guilty of dumping frequently come under pressure from their own government to cease and desist, especially if the tariffs adversely affect innocent companies based in the same country or if the advent of special tariffs raises the specter of an international trade war.

Question 5

Profit sanctuaries are country markets or geographic regions where:

Accepted Answer

Profit sanctuaries are country markets (or geographic regions) in which a company derives substantial profits because of a strong or protected market position.

Question 6

What can happen when international rivals compete against one another in multiple-country markets?

Accepted Answer

When international rivals compete against one another in multiple-country markets, this type of deterrence effect can restrain them from taking aggressive action against one another, due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war.

Question 7

Televisa,a Mexican media company,became the world's most prolific producer of Spanish-language soap operas owing to its expertise in Spanish culture and linguistics.Which of the following strategies did Televisa employ to defend against global giants?

Accepted Answer

When a company from a developing country has resources and capabilities suitable for competing in other country markets, launching initiatives to transfer its expertise to foreign markets becomes a viable strategic option. Televisa, Mexico's largest media company, used its expertise in Spanish culture and linguistics to become the world's most prolific producer of Spanish-language soap operas. By continuing to upgrade its capabilities and learn from its experience in foreign markets, a company can sometimes transform itself into one capable of competing on a worldwide basis, as an emerging global giant.

Question 8

Explain why the strategies of firms that expand internationally are usually grounded in home-country advantages or core competencies.

Accepted Answer

The answer of Explain why the strategies of firms that...

Question 9

Profit sanctuaries are found to differ by a company's strategy,such that a(n):

Accepted Answer

In most cases, a company's biggest and most strategically crucial profit sanctuary is its home market, but international and global companies may also enjoy profit sanctuary status in other nations where they have a strong position based on some type of competitive advantage.

Question 10

Which of the following is NOT a viable strategy option for a local company in competing against global challengers?

Accepted Answer

Studies of local companies in developing markets have disclosed five strategies that have proved themselves in defending against globally competitive companies.1. Develop business models that exploit shortcomings in local distribution networks or infrastructure.2. Utilize keen understanding of local customer needs and preferences to create customized products or services.3. Take advantage of aspects of the local workforce with which large international companies may be unfamiliar.4. Use acquisition and rapid-growth strategies to better defend against expansion-minded internationals.5. Transfer company expertise to cross-border markets and initiate actions to contend on an international level.

Question 11

Companies racing for global market leadership:

Accepted Answer

Companies racing for global leadership have to consider competing in developing-economy markets like China, India, Brazil, Indonesia, Thailand, and Russia-countries where the business risks are considerable but where the opportunities for growth are huge, especially as their economies develop and living standards climb toward levels in the industrialized world.

Question 12

Sharing and transferring resources and capabilities across borders may also contribute to the development of broader or deeper competencies and capabilities,thereby helping a company achieve:

Accepted Answer

Sharing and transferring resources and capabilities across country borders may also contribute to the development of broader or deeper competencies and capabilities-helping a company achieve dominating depth in some competitively valuable area.

Question 13

What is it called when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit?

Accepted Answer

A company is said to be dumping when it sells its goods in foreign markets at prices that are (1) well below the prices at which it normally sells them in its home market or (2) well below its full costs per unit.

Question 14

The basic strategy options for local companies in competing against global challengers include:

Accepted Answer

When developing-country markets are largely made up of customers with strong local needs, a good strategy option is to concentrate on customers who prefer a local touch and to accept the loss of the customers attracted to global brands. A local company may be able to astutely exploit its local orientation-its familiarity with local preferences, its expertise in traditional products, its long-standing customer relationships.

Question 15

Viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets include all of the following,EXCEPT:

Accepted Answer

There are several options for tailoring a company's strategy to fit the sometimes unusual or challenging circumstances presented in developing-country markets:

Question 16

Transferring core competencies and resource strengths from one country market to another is:

Accepted Answer

Cross-border sharing or transferring resources and capabilities provides a cost-effective way for a company to leverage its core competencies more fully and extend its competitive advantages into a wider array of geographic markets.

Question 17

Explain how exchange rate fluctuations pose a risk to manufacturing companies that rely upon an export strategy to compete in foreign markets.

Accepted Answer

The answer of Explain how exchange rate fluctuations pose a...

Question 18

Which of the following is NOT a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets?

Accepted Answer

There are several options for tailoring a company's strategy to fit the sometimes unusual or challenging circumstances presented in developing-country markets:• Prepare to compete on the basis of low price.• Modify aspects of the company's business model to accommodate the unique local circumstances of developing countries.• Try to change the local market to better match the way the company does business elsewhere.• Stay away from developing markets where it is impractical or uneconomical to modify the company's business model to accommodate local circumstances.

Question 19

What supports competitive offensives in one market with resources and profits diverted from operations in another market?

Accepted Answer

Razor-thin margins or even losses in these markets can be subsidized with the healthy profits earned in its profit sanctuaries-a practice called cross-market subsidization. The international company can adjust the depth of its price cutting to move in and capture market share quickly, or it can shave prices slightly to make gradual market inroads (perhaps over a decade or more) so as not to threaten domestic firms precipitously and trigger protectionist government actions.

Question 20

A key approach for a company to grow sales and profits in several country markets is to:

Accepted Answer