Question 1

Four countries that figure greatly into the landscape of developing economies where there is great opportunity along with great risk are known collectively as BRIC and include all except ________.

Accepted Answer

The four countries that make up BRIC are Brazil, Russia, India, and China. Congo is not part of BRIC.

Question 2

The CAGE framework is a tool that considers ________ dimensions to assess the distance created by global expansion.

Accepted Answer

The CAGE framework assesses distance in global expansion through four dimensions: Culture, Administration, Geography, and Economics.

Question 3

A dimension of cultural differences that pertains to the extent to which individuals accept the existence of inequalities between subordinates and superiors within a hierarchical structure is called ________.

Accepted Answer

Power distance refers to the degree of acceptance of social inequalities or hierarchies within a society. It reflects the extent to which individuals within a culture are willing to accept differences in power and authority between subordinates and superiors. A high power distance culture would have a significant inequality in the distribution of power, resources, and privileges, while low power distance cultures would have a more egalitarian distribution of power and resources. The other dimensions listed, such as uncertainty avoidance, masculinity, and long- or short-term orientation, do not address the acceptance of social inequality.

Question 4

According to the CAGE framework, all of the following are examples of products most affected by cultural distance except ________.

Accepted Answer

According to the CAGE framework, cultural distance includes differences in language, religion, values, social norms, and customs. Products most affected by cultural distance are those that are closely tied to a country's culture and may not translate well to other cultures. TV, foods, and cars are all examples of products that are influenced by cultural factors, such as entertainment preferences, cuisine, and transportation needs. However, cement is a product that is less affected by cultural factors and is more influenced by economic and logistical factors. Therefore, the correct answer is B) cement.

Question 5

A goal of locating a firm or a particular aspect of its operations in a part of the world where competition is the fiercest is to learn from leading-edge production practices and ________.

Accepted Answer

The goal of locating a firm in a fiercely competitive location is to learn from leading-edge production practices and transfer that advanced knowledge back to the firm to improve its own operations.

Question 6

Dell Inc. uses a core distribution and sales engine known as the Dell ________ model to maintain its position as the world's second largest PC maker.

Accepted Answer

Dell's Direct model involves selling directly to customers without going through intermediary retail stores or distributors, resulting in cost savings and more control over the customer experience. This model has been a key factor in Dell's success in the PC industry.

Question 7

The geographic-diversified firm must ensure that the benefits of being international outweigh the added costs of the ________ necessary to support its nondomestic operations.

Accepted Answer

Infrastructure refers to the physical facilities, equipment, and support systems necessary for the efficient functioning of a company. These costs can include building and maintaining offices and factories, transportation expenses, and communication systems. Ensuring that the benefits of operating internationally outweigh the added costs of infrastructure is essential for a geographic-diversified firm's success. While human resources, raw materials, and learning are also important aspects of international operations, they are not the primary costs associated with supporting nondomestic operations.

Question 8

According to the CAGE framework, all of the following are attributes creating administrative distance except ________.

Accepted Answer

The CAGE framework, developed by Pankaj Ghemawat, focuses on Cultural, Administrative, Geographical, and Economic distances between countries. Weak communication links are considered a part of Geographical distance rather than Administrative distance. Administrative distance is characterized by differences in government policies, political hostility, and the presence or absence of colonial ties.

Question 9

A firm that is most interested in markets with high consumer buying power uses ________ as the first sorting cue in applying CAGE analysis.

Accepted Answer

Per capita income reflects the average income per person in a country, which can indicate the overall level of consumer buying power in that market. Higher per capita income often correlates with higher levels of consumer spending on goods and services, making it a relevant sorting cue for a firm focused on markets with high buying power.

Question 10

According to the CAGE framework, which of the following attributes creates geographic distance?

Accepted Answer

Weak transportation links create geographic distance by limiting the ease and speed of moving goods, services, and people between two locations. Different ethnicities and differences in consumer incomes create cultural and administrative distance, respectively, while differences in quality of natural resources create economic distance.

Question 11

According to the CAGE framework, which of the following is an example of a product most affected by economic distance?

Accepted Answer

The answer of According to the CAGE framework, which of...

Question 12

For the most successful firms, international expansion is used as a vehicle for ________.

Accepted Answer

The answer of For the most successful firms, international expansion...

Question 13

All of the following are benefits resulting from sharing knowledge across business units except ________.

Accepted Answer

Sharing knowledge across business units can result in many benefits, including the transfer of best practices, uncovering revenue-enhancement opportunities, and efficient use of proprietary capability. However, it is not likely to result in a reduction in infrastructure costs, as these costs are typically fixed and not affected by knowledge sharing.

Question 14

CAGE-related risks are most relevant in all of the following industries except industries in which ________.

Accepted Answer

CAGE-related risks are most relevant in industries where cultural and language identifications are crucial. Therefore, industries where language identification is minimal will be least affected by CAGE-related risks.

Question 15

The strategically most important markets to a firm will be those that feature all except ________.

Accepted Answer

The strategically most important markets for a firm are those that offer intrinsic attractiveness, opportunities to learn, and innovate. The opportunity to compete is not excluded but is rather a fundamental aspect of entering any market. The key factors that make a market strategically important are its attractiveness, and the opportunities it presents for learning and innovation, rather than just the presence of competition.

Question 16

Application of the CAGE framework requires managers to identify attractive locations based on all of the following except ________.

Accepted Answer

The CAGE framework considers cultural, administrative, geographic, and economic distances between countries in order to identify attractive locations for international expansion. The framework does not specifically factor in the number of competitors in a given location. Therefore, option B, number of competitors, is not a consideration when using the CAGE framework.

Question 17

In the area of international strategy, distance can not only be viewed in terms of geography, but also in terms of all but which of the following?

Accepted Answer

The answer of In the area of international strategy, distance...

Question 18

Researchers have identified significant cultural differences among people of different countries that include all but which of the following dimension?

Accepted Answer

Researchers have identified the following cultural dimensions among people of different countries: power distance, uncertainty avoidance, individualism/collectivism, masculinity/femininity, and long-term/short-term orientation. Gender dominance is not one of the recognized cultural dimensions.

Question 19

The greater the value differences between disconnected markets, the greater the profit potential arising from arbitrage. However, greater distance also tends to be accompanied by greater ________ and risks.

Accepted Answer

Greater distance between disconnected markets means that there are likely to be higher entry costs associated with conducting business in those markets, such as transportation costs and regulatory hurdles. These higher entry costs also increase the risks associated with conducting business in those markets.

Question 20

According to the CAGE framework, all of the following are attributes creating cultural distance except different ________.

Accepted Answer

The CAGE framework identifies four main attributes that create cultural distance between countries: Cultural, Administrative, Geographic, and Economic attributes. Among these, only climate is not included as an attribute. Therefore, the correct answer is D, different climates.

Quiz 8: Looking at International Strategies