Deck 9: International Strategy

Question 1

International associations such as the European Union,the Organization of American States,and the North American Free Trade Association encourage regionalization of competition rather than globalization.

Answer 1

True

Question 2

Location advantages are influenced by costs of production,access to natural resources and critical supplies,as well as the needs of customers,but not culture.

Answer 2

False

Question 3

A global strategy is easier to manage because of the limited need to coordinate strategies and decisions across country borders.

Answer 3

False

Question 4

A transnational strategy is an international strategy in which the firm seeks to achieve both global efficiency and local responsiveness.

Question 5

A multidomestic strategy assumes that consumer needs,industry conditions,political and legal structures and social norms are homogeneous in every country.

Question 6

When a firm is in the early stages of geographic diversification,cross-border alliances may be a good learning step before other forms of international expansion.

Question 7

The chief risks in the international environment are political and cultural.

Question 8

The growing number of global competitors heightens the requirements to keep costs down and there is the desire for more specialized products to meet customer needs. These two pressures make transnational strategies increasingly necessary.

Question 9

In some industries,technology drives globalization because the economies of scale necessary to reduce costs cannot be met by competing in domestic markets alone.

Question 10

After a firm decides to compete internationally,it must select its strategy and choose a mode of entry into international markets.

Question 11

One reason why firms pursue international opportunities is to extend the product's life cycle.

Question 12

As a general rule of thumb,if a company cannot make a profit in its home market,it cannot make a profit in the international market.

Question 13

International strategies are complex and can therefore produce greater uncertainty for the firm.

Question 14

Many multinationals consist of many people scattered in many different countries.As a result,their invisible relationships do not add value.

Question 15

Legal challenges to counterfeiting generally are successful in emerging economies such as China and Russia.

Question 16

Industry regulation is increasing worldwide.

Question 17

A multidomestic strategy uses a highly decentralized approach meaning that country managers have the autonomy to customize the firm's products as necessary to meet the needs and preferences of local customers.

Question 18

Fluctuation in the value of different currencies is a major economic risk associated with international diversification.

Question 19

A global strategy is an international strategy through which the firm offers standardized products across country markets,with competitive strategy being dictated by offices within the host markets served.

Question 20

A global strategy assumes that the strategic business units operating in each country are interdependent and the home office attempts to achieve integration across these businesses.

Question 21

Which of the following is not a force favouring globalization of businesses?

A) Profitability of foreign markets
B) German is becoming a more widely spoken language for business
C) Uniformity in technical standards
D) Globalization of capital market

Question 22

In a transnational MNC,the role of subsidiaries is to adapt and leverage parent company competencies.

Question 23

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

A) Low; low
B) Low; high
C) High; low
D) High; high

Question 24

Economies of scale refer to the fact that as the:

A) Quantity of product produced in a given time period increases, the cost of manufacturing each unit increases
B) Quantity of product produced in a given time period increases, the cost of manufacturing each unit remains constant
C) Quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases
D) Quantity of product produced in a given time period decreases, the cost of manufacturing each unit decreases

Question 25

An international division serves as a means of coordination with the rest of the firm.

Question 26

Although the term mergers and acquisitions (M&As)is often used,in reality,acquisitions dominate the scene.

Question 27

A global corporate-level strategy emphasizes:

A) Differentiated products
B) Economies of scale
C) Sensitivity to local product preferences
D) Decentralizing control and limited monitoring

Question 28

Most R&D intensive industries are international because:

A) Of the need to make use of scientific talent in many nations
B) Large markets are necessary for earning above-average returns on investments
C) Of mandatory requirements by emerging economies that firms take part in joint ventures or direct investment in the country in order to sell their products in that country
D) Intellectual property is copied so rapidly that firms must move products into the international market immediately

Question 29

All of the following are characteristic of the global economy except:

A) The increasing importance of developing countries as sources of revenue growth
B) The free movement of goods, services, people, skills, and ideas across geographic borders
C) The increased use of tariffs to protect industries
D) Higher levels of performance standards

Question 30

The numerous differences in formal institutions and informal cultures/norms are not barriers to internationalization.

Question 31

Entry strategies may change over time.

Question 32

A large domestic market can provide the country's industries a chance at dominating the world market because:

A) They have been able to develop economies of scale
B) They have access to abundant and inexpensive factors of production
C) The related and supporting industries will have been developed
D) The nation's culture and educational system will be adapted to producing the labour force needed for the industry

Question 33

A transnational corporate-level strategy seeks to achieve:

A) Customization for the local market
B) Economies of scale and centralized strategic control
C) Global efficiency and local responsiveness
D) Standardization of products across countries

Question 34

The economic interdependence among countries as reflected in the free movement of goods,services,financial capital and knowledge across geographic borders is defined as:

A) Hypercompetition
B) Boundaryless retailing
C) Strategic intensity
D) Globalization

Question 35

Considering both GDP and the number of potential consumers,what is the world's largest single market?

A) Europe
B) The United States
C) China
D) Japan

Question 36

A multidomestic corporate-level strategy is one in which:

A) A corporation chooses not to compete internationally but where there are a number of international competitors in the firm's local marketplace
B) The firm produces a standardized product, but markets it differently in each country in which it competes
C) The firm customizes the product for each country in which it competes
D) The firm competes in a number of countries, but it is centrally coordinated by the home office

Question 37

In the domestic stage of an international strategy:

A) Organizations are not associated with any one country-they are involved with many countries around the world
B) Organizations are often well prepared to compete on an international stage
C) Organizations begin exporting some of their products and services as part of their growth strategy
D) Organizations produce and sell only domestically

Question 38

International strategy refers to a(an):

A) Action plan pursued by companies in a country to compete against foreign companies operating in that country
B) Strategy through which the firm sells products in markets outside the firm's domestic market
C) Political and economic action plan developed by businesses and governments to cope with global competition
D) Strategy firms in a country use to dominate international markets

Question 39

Moving into international markets is a particularly attractive strategy for firms whose domestic markets:

A) Demand a differentiation strategy for success
B) Are limited in opportunities for growth
C) Have developed unfriendly business attitudes toward the industry
D) Have too much regulation

Question 40

International corporate-level strategy focuses on:

A) The scope of operations through both product and geographic diversification
B) Competition within each country
C) Economies of scale
D) Sophistication of monitoring and control systems

Question 41

Why should some firms not pursue international business?

Question 42

Which of the following is true regarding M&As?

A) As many as 70 percent of M&As reportedly fail.
B) Target firms, after being acquired and becoming internal units, often perform better than when they were independent, stand-alone firms.
C) The only identifiable losers are the shareholders of target (acquired) firms.
D) The outstanding success of M&As is due to pre- and post acquisition phases.

Question 43

Identify and describe the major risks of international diversification.

Question 44

What are the motives for firms who pursue international diversification?

Question 45

Discussion of strategies for MNCs focus on growth and global expansion.Under what circumstances can downsizing and withdrawing from countries make sense? Why might some firms fail to withdraw or downsize?

Question 46

Globalization is viewed as:

A) A new force sweeping through the world in recent times.
B) A long-run historical evolution since the dawn of human history.
C) A pendulum that swings from one extreme to another from time to time.
D) All of the above.

Question 47

What are the four factors that provide a basis for international business-level strategies?

Question 48

What is the benefit of formal,rule-based,impersonal exchange with third-party enforcement (often termed arm's-length transaction)versus informal institutions?

Question 49

Unique to international competition are the pressures for local responsiveness,which are reflected in:

A) Consumer preferences
B) Distribution channels
C) Host country demands
D) A of the above

Question 50

Which of the following best describes foreign direct investment (FDI)?

A) A firm's direct investment in production and/or service activities abroad.
B) The purchase of foreign securities by people from outside of the country.
C) Investment into any firm by someone who is not resident in the country.
D) Avoidance of brokers or other financial intermediaries when making foreign investments.

Question 51

BRIC refers to:

A) Bahrain, Russia, Iran, and China.
B) Bolivia, Romania, India, and Columbia.
C) Bermuda, Rwanda, Iraq, and the Czech Republic.
D) Brazil, Russia, India, and China.

Question 52

As firms expand into more countries,they should recognize:

A) Foreign firms are still often discriminated against.
B) Foreign firms primarily deploy overwhelming resources and capabilities that offset the liability of foreignness.
C) Foreign firms are able to offset the liability of foreignness and still have some competitive advantage.
D) All of the above.

Question 53

Describe the three roles played by foreign subsidiaries?

Question 54

Having valuable,unique,and hard to imitate capabilities may be advantageous in doing business globally.However,what is the problem with trying to maintain that advantage?

Question 55

When does a global approach to an international product/market strategy make the most sense?

Question 56

One of the primary reasons for failure of cross-border strategic alliances is

A) The incompatibility of the partners
B) Conflict between legal and business systems
C) Security concerns and terrorism
D) High debt financing

Question 57

Is "foreignness" a liability or an asset? What causes it to be one or the other?

Question 58

Even for companies capable of succeeding in global markets,it is critical they:

A) Introduce many new products immediately after entering a new market
B) Acquire a local competitor in each significant foreign market
C) Remain committed to and strategically competitive in their domestic market
D) Develop good negotiating skills in order to take advantage of local suppliers in the international market

Question 59

Multidomestic strategy involves all of the following except:

A) Each foreign country is regarded as a stand-alone "domestic" market
B) Is effective when there are clear differences among national and regional markets
C) Global standardization strategy is the same as a multidomestic strategy
D) A multidomestic strategy has high costs

Question 60

In some countries,the only legal way for foreign firms to invest in the country is through:

A) Silent partner agreements
B) Franchising
C) Wholly-owned subsidiaries
D) Partnership with local firm

Question 61

Identify and describe the modes of entering international markets?

Question 62

Identify the three international corporate-level strategies.On what factors are these strategies based?