Deck 6: Business Marketing Strategies for Global Markets

Question 1

The choice of a particular international market entry mode depends on a range of factors including the size of the market and its growth potential. Markets of limited size surrounded by trade barriers may be supplied most cost effectively via:

A)licensing or contract manufacturing.
B)a local production and marketing subsidiary.
C)exporting.
D)selective distribution.
E)none of the above

Answer 1

A

Question 2

An industrial firm's first encounter with an overseas market usually involves _____ because it involves the least commitment and risk.

A)contracting
B)licensing
C)exporting
D)franchising
E)a turnkey operation

Answer 2

C

Question 3

An advantages of joint ventures is:

A)they include the only path of entry into many foreign markets.
B)they open up market opportunities that neither partner to the venture could purse alone.
C)they transfer knowledge to the partner.
D)all of the above.
E)(a)and (b)only.

Answer 3

E

Question 4

When a firm seeks competitive advantage with strategic choices that are highly integrated across countries (for example,a standardized core product that requires minimal local adaptation across country-markets),this describes:

A)a multidomestic strategy.
B)a differentiated strategy.
C)a global strategy.
D)an export-based strategy.
E)a coordinated strategy.

Question 5

In entering high-risk country-markets,firms can reduce their risk exposure by adopting low-commitment modes of entry such as:

A)licensing.
B)wholly-owned subsidiaries.
C)contract manufacturing.
D)all of the above
E)(a)and (c)only

Question 6

Exporting is a viable international entry strategy when the firm:

A)wishes to maintain direct control of the marketing program.
B)lacks the resources to make a significant commitment to the market.
C)wants to form long-term relationships with international customers.
D)all of the above
E)none of the above

Question 7

_____ involves sourcing a product from a producer located in a foreign country for sale there or in other countries.

A)Contract manufacturing
B)Exporting
C)Franchising
D)A joint venture
E)A turnkey operation

Question 8

In _____,firms pursue separate strategies in each of their foreign markets-competition in each country is essentially independent of competition in other countries.

A)a multidomestic industry
B)a differentiated industry
C)a global industry
D)an export-based industry
E)a coordinated industry

Question 9

Potential partners for a global alliance are evaluated based on:

A)resources.
B)relationships.
C)culture.
D)all of the above.
E)(a)and (b)only.

Question 10

Included among the contractual modes of international market participation are:

A)licensing.
B)management contracts.
C)exporting.
D)all of the above
E)both (a)and (b)

Question 11

Consider this position: If you run a pharmaceutical company with a good product to distribute in Japan but have no sales force to do it,find someone in Japan who also has a good product but no sales force in your country. Why not join forces to maximize contribution to each other's fixed costs? This describes the logic of:

A)a joint venture.
B)exporting.
C)franchising.
D)importing.
E)global marketing.

Question 12

Concerning international strategy,a firm that concentrates manufacturing and support activities in one country but gives local marketing subsidiaries significant latitude in each region of the world is following which type of international strategy?

A)a country-centered strategy
B)an export-based strategy
C)a purest global strategy
D)a segmented international strategy
E)a coordinated international strategy

Question 13

Multinational firms have traditionally managed operations outside their home country with an approach that permits individual subsidiaries to compete independently in different country-markets. Here each subsidiary resembles a strategic business unit that is expected to contribute earnings and growth to the organization. This describes:

A)a multidomestic strategy.
B)a differentiated strategy.
C)a global strategy.
D)an export-based strategy.
E)a coordinated strategy.

Question 14

This mode of international market participation permits a client to require a complete operational system,together with skills sufficient to allow the unassisted maintenance and operation of the system. Once the package agreement is on line,the system is owned,controlled,and operated by the client. This provides an apt description of:

A)licensing.
B)a turnkey operation.
C)a joint venture.
D)contract manufacturing.
E)importing.

Question 15

In pursuing international entry options,joint ventures often constitute a feasible option because:

A)they provide the only path of entry into many foreign markets.
B)they may provide for better relationships with local organizations (for example,local authorities)and with customers.
C)they may open up market opportunities that neither party to the venture could pursue alone.
D)all of the above
E)(a)and (b)only

Question 16

_____ is one in which a firm's competitive position in one country is significantly influenced by its position in other countries.

A)A multidomestic industry
B)A differentiated industry
C)A global industry
D)An export-based industry
E)A coordinated industry

Question 17

Which of the following modes of international market entry provides for greater potential returns and a greater degree of control over operations?

A)licensing
B)wholly-owned subsidiaries
C)contract manufacturing
D)exporting
E)franchising

Question 18

The type of international strategy that concentrates as many activities as possible in one country,serves the world market from the home base,and closely coordinates those activities that must be performed near the buyer (for example,service)is referred to as:

A)a country-centered strategy.
B)an export-based strategy.
C)a purest global strategy.
D)a segmented international strategy.
E)a coordinated international strategy.

Question 19

As a mode of international market entry,licensing agreements pose the following limitation(s):

A)a firm has less control over a license than over its own exporting or manufacturing abroad.
B)licensing agreements include a time limit and additional extensions (beyond the first)that may not be readily permitted by a number of foreign governments.
C)the licensee may become an important competitor in the future.
D)all of the above
E)(b)and (c)only

Question 20

As an entry strategy,licensing requires:

A)capital investment.
B)marketing strength in foreign markets.
C)a company to have less control over a licensee than over its own exporting or manufacturing abroad.
D)all of the above.
E)(b)and (c)only.

Question 21

Rather than modifying the firm's product offerings from country to country,____ strategy requires a patient,long-term campaign to enter every significant foreign market while maintaining and leveraging the company's unique strategic position.

A)a global
B)an exporting
C)a joint venture
D)a licensing

Question 22

The BCG Global Advantage Diamond portrays the key elements that must be developed and integrated to secure a strong position in global markets. This framework includes

A)A market access element
B)A market relevancy element
C)A resource accuracy element
D)All of the above
E)None of the above

Question 23

Which of the following issues pose challenges to business marketers considering strategic alliance as a market entry mode?

A)Problems with maintaining alliances over time.
B)Difficult to implement alliances on a global scale.
C)Problems establishing coordination and trust.
D)All of the above.
E)(a)and (c)only.

Question 24

The home base for a business is the location where:

A)strategy is set.
B)core product and process technology is created and maintained.
C)a critical mass of sophisticated production and service activities reside.
D)all of the above.
E)(a)and (c)only.

Question 25

_____ refers to how similar activities performed in various countries are couple with each other.

A)Coordination
B)Configuration
C)The home base
D)The value network

Question 26

Companies can use capabilities advantages to:

A)improve research and development.
B)address unmet customer needs.
C)further standardize products in the home country.
D)All of the above.
E)(a)and (b)only.

Question 27

Research suggest that over _____ % of joint ventures are disbanded or fall short of expectations.

A)10
B)20
C)30
D)40
E)50

Question 28

In high-risk markets,firms can reduce their equity exposure by adopting low commitment modes such as:

A)licensing.
B)contract manufacturing.
C)joint ventures with a majority share.
D)all of the above.
E)(a)and (b)only.

Question 29

The choice of a foreign market entry mode depends upon:

A)the size of the market.
B)the market's growth potential.
C)Both (a)and (b).
D)Neither (a)or (b).

Question 30

Successful global companies achieve unified action by:

A)establishing a strategies that are independent across countries.
B)developing accounting systems that are country specific.
C)encouraging personal relationships and the transfer of learning among subsidiary managers across locations.
D)all of the above.

Question 31

Some research suggests that,compared to consumer goods,industrial and high-technology products may be more appropriate for global brand strategies.

Question 32

Factors that favor relocation of products or services to rapidly developing economies include:

A)High labor content.
B)Low growth potential
C)Standardized manufacturing or service-delivery processes.
D)All of the above.
E)(a)and (c)only.

Question 33

The decision to outsource business operations to rapidly developing economies is affected by which of the following sets of factors?

A)Economic.
B)Competitive.
C)Environmental.
D)All of the above.
E)(a)and (b)only.

Question 34

Firms that quickly and intelligently seize global opportunities can secure which of the following forms of competitive advantage?

A)Cost advantage.
B)Market access advantage.
C)Capabilities advantage.
D)All of the above.
E)(a)and (b)only.

Question 35

A firm that includes rapidly developing economies (RDEs)in their global cost structures can realize savings of _____ in the landed costs of their products.

A)0 to 20 percent
B)20 to 40 percent
C)40 to 60 percent
D)60 to 80 percent

Question 36

The hidden costs in operating in rapidly developing economies include which of the following?

A)One-time setup costs.
B)Risk management costs.
C)Exit costs.
D)All of the above.
E)(a)and (b)only.

Question 37

When moving to a RDE,suppliers must adjust their operating models to:

A)Maintain quality levels
B)Counter local suppliers offerings
C)To fully capture the cost advantages.
D)Consider the increased transportation costs involved
E)Consider market research data on procurement preferences

Question 38

Factors that favor keeping products or services at home instead of relocating to rapidly developing economies include:

A)Protection of intellectual property is critical.
B)High sensitivity to production location.
C)Very high technology content.
D)All of the above.
E)(a)and (c)only.

Question 39

An industrial firm's first encounter with an overseas market usually involves the formation of a wholly-owned subsidiary in another country.

Question 40

Which of the following issues pose problems to firms trying to manage joint venture relationships?

A)Disagreements over profit-sharing.
B)Opening up of new market opportunities.
C)Problems responding to changing market needs.
D)All of the above.
E)(b)and (c)only.

Question 41

Problems often plague joint ventures and,as a result,many of them fall short of expectations or are disbanded.

Question 42

Coordination centers on where each activity is performed,including the number of locations.

Question 43

Exporting involves giving up direct control of the marketing program,which often makes it difficult to coordinate activities.

Question 44

A firm whose products are technically complex and are protected by U.S. patents is a good candidate for relocating to a rapidly developing economy.

Question 45

The home base for a business is the location where strategy is set and a critical mass of sophisticated production and service activities reside.

Question 46

In high-risk foreign markets,firms can reduce their equity exposure by adopting low-commitment modes of entry such as licensing or contract manufacturing.

Question 47

For truly global industries,a firm's position in one country significantly affects its position elsewhere,so a multi-domestic strategy is required.

Question 48

As an entry strategy,licensing requires a major capital investment in a foreign market.

Question 49

A single-country may not be large enough for a firm to realize economies of scale.

Question 50

Markets of limited size surrounded by trade barriers may be supplied most cost effectively by using the exporting mode of entry.

Question 51

In multidomestic industries,a firm's competitive position in one country is significantly influenced by its position in other countries.

Question 52

Upstream activities in the value chain involve those primary activities that are closely tied to where the buyer is located.

Question 53

The choice of a particular entry mode will also depend on the size of the market and its growth potential.

Question 54

The need for a global strategy is determined by the nature of international competition in a particular industry.

Question 55

Arguments over profit-sharing and management styles are common problems experienced in exporting.

Question 56

A factory in a rapidly developing economy can be built with 70% of the investment level needed in a highly developed economy.

Question 57

The purest global strategy concentrates as many activities as possible in one country,serves the world market from this home base,and closely coordinates those activities that must be performed near the buyer.

Question 58

A multidomestic strategy seeks competitive advantage with strategic choices that are highly integrated across countries.

Question 59

Configuration centers on where each activity is performed,including the number of locations.

Question 60

The two primary sources of cost advantages driving firm to implement operations in rapidly developing economies are lower operating costs and lower capital investment requirements.

Question 61

Multidomestic industries do not need a global strategy because the focus should be on developing a series of distinct domestic strategies.

Question 62

A global industry is one in which a firm's ____________________ in one country is significantly influenced by its position in other countries.

Question 63

Options for entry into foreign markets range from exporting to global strategies. Explain how commitment,complexity,risk,and control changes as firms move across the spectrum of involvement in international marketing. What factors should firms consider when choosing entry modes?

Question 64

Joint ventures assume a very prominent role in the global strategy of many business marketing firms like Dow Chemical and Xerox. While offering significant benefits,joint ventures often fall short of expectations or dissolve. Why?

Question 65

While the location of the corporate headquarters is less important and may reflect historical factors,a firm must develop a clear home base for competing in each of its strategically distinct businesses. What role does a home base assume in forming a global strategy and what factors should be considered in choosing a location? Under what conditions might a firm create a home base for a different product line in another country?

Question 66

In China's steel industry,their main source of competitive advantage is due not to cheap labor,but rather massive government energy ____________________.

Question 67

The realized net savings after logistics costs,other management costs,and import duties involved in moving the product from the RDE to the market destination is referred to as ____________________costs.

Question 68

Multinational firms have traditionally managed operations outside their home country with ____________________ that permit individual subsidiaries to compete independently in their home country markets.

Question 69

____________________offer a number of benefits,such as access to markets or technology,economies of scale in manufacturing and marketing,and the sharing of risk among partners.

Question 70

Additional insights into international strategy can be gained by examining two dimensions of competition in the global market:____________________and____________________.

Question 71

Rather than modifying the firm's product and service offerings from country to country,a global strategy requires a patient,long-term campaign to enter every significant foreign market while maintaining and leveraging the company's unique strategic positioning. Agree or disagree? Support your position.

Question 72

Some experts emphasize that since customer needs are becoming increasingly homogeneous worldwide,the opportunity exists to sell the same type of product across countries and to use essentially the same marketing strategy around the globe. If customers respond favorably to a strategy in St. Louis,will the same strategy work in London or Tokyo? While a standardized approach might work for Coke or Levi's,will it work for business marketers like Dow Chemical or Hewlett-Packard? Explain.

Question 73

____________________involves sourcing a product from a producer located in a foreign country for sale there or in other countries.

Question 74

Rapidly developing economies (RDEs)are having a significant impact on the global economy,both as attractive new markets but also as new competitors for firms in highly developed economies. Explain the three forms of competitive advantage that firms can achieve by moving operations to and marketing in RDEs. What products or services make the most sense to relocate to RDEs?

Question 75

An industrial firm's first foray into an overseas market usually involves____________________because it requires the least commitment and risk.

Question 76

To diagnose the sources of competitive advantage,domestic or international,Michael Porter divides the chain of activities performed by a firm into distinct groups. Describe Porter's value chain concept and explore its relevance to international strategy.

Question 77

The primary reason that companies are moving to sourcing from Rapidly Developing Economies is due to very large and sustainable ____________________ from lower operating costs and lower capital investment requirements.