Question 1

Multinational trade agreements such as the European Union, Organization of American States, and the North American Free Trade Association, encourage

Accepted Answer

The answer of Multinational trade agreements such as the European...

Question 2

The problems associated with exporting include

Accepted Answer

The problem associated with exporting that is specifically related to transportation costs is D. The other options (merging corporate cultures, a partner's incompatibility, and difficulty in negotiating relationships) are more related to joint ventures or other forms of foreign direct investment rather than exporting.

Question 3

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

Accepted Answer

The firm is using a regional approach to international expansion, as they are only expanding within a twelve-nation region that includes their home country. This is different from purely domestic operations but still falls within the category of international business.

Question 4

A transnational corporate-level strategy seeks to achieve

Accepted Answer

A transnational corporate-level strategy aims to find a balance between global efficiency and local responsiveness. This means that the company seeks to achieve economies of scale and centralized strategic control while also tailoring its products and practices to meet local tastes, preferences, and regulations. Therefore, option C is the correct choice as it accurately describes the goal of a transnational corporate-level strategy. Option A (customization for the local market) is too narrow, option B (economies of scale and centralized strategic control) does not take into account local responsiveness, and option D (standardization of products across countries) ignores the need for tailored products in different markets.

Question 5

Whirlpool's development of centers of excellence in various world regions that develop appliance designs most suited for that region and manufacture the appliances in that region, combined with a global network of distribution and appliance-manufacturing centers, shows Whirlpool's move toward the ____ strategy.

Accepted Answer

Whirlpool's strategy combines local responsiveness (developing appliance designs suited for specific regions) with global integration (manufacturing and distribution network). This is the essence of a transnational strategy.

Question 6

The choices that a firm has for entering the international market include all of the following EXCEPT

Accepted Answer

The answer of The choices that a firm has for...

Question 7

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

Accepted Answer

The formation of economic and political agreements such as the European Union and the North American Free Trade Association have made it easier for firms to sell their products in a specific region of the world. By focusing on a particular region, firms can take advantage of these agreements and regulations to increase their market share and enjoy greater economies of scale. These agreements also provide firms with access to markets that are more open and liberal than their domestic markets, making it easier for them to penetrate foreign markets.

Question 8

A global strategy

Accepted Answer

A global strategy is a standardized approach to business operations across different countries. This approach can lack responsiveness to local markets since it seeks to apply similar practices everywhere. While a global strategy can achieve efficient operations, it may not allow for sharing resources across country boundaries since each market is viewed as distinct. Additionally, decision-making can be centralized at the home office, increasing risk since challenges at the local level may not be appropriately addressed.

Question 9

A licensing agreement

Accepted Answer

A licensing agreement allows a foreign firm to purchase the rights to manufacture and sell a firm's products within a host country.

Question 10

A global corporate-level strategy assumes

Accepted Answer

A global corporate-level strategy focuses on achieving economies of scale by standardizing products across country markets. This allows the company to reduce costs and improve efficiency, while also maintaining a consistent brand image. However, it may not take into account cultural differences and may not allow for customization in different markets.

Question 11

A U.S. manufacturer of adaptive devices for persons with disabilities is considering expanding internationally. It is a fairly small company, but it is looking for growth opportunities. This company should primarily consider the option of

Accepted Answer

As a small company, exporting would be the most feasible option for expanding internationally. Licensing may require giving up control over their products and a strategic alliance or greenfield venture may require significant financial and resource investments. Exporting allows the company to test the market and gradually expand without committing too many resources upfront.

Question 12

Terrorist attacks

Accepted Answer

Terrorist attacks increase the liability of foreignness for firms, as they face increased risks and costs associated with operating in a foreign market. This can lead to firms being more cautious or even pulling out of certain regions, resulting in potential losses.

Question 13

Host countries with emerging economies may encourage local firms to engage in strategic alliances with firms from developing countries because

Accepted Answer

Strategic alliances with firms from developing countries may provide access to their technology, which can be beneficial for the host-country firm. This can help the firm improve their competitiveness and potentially expand into new markets. Additionally, strategic alliances may be preferred over licensing arrangements because there may be less cultural conflict and disruption to the host-country's economy. However, asset nationalization is a risk that should be considered when forming alliances with firms from emerging economies.

Question 14

Lands' End is an example of a

Accepted Answer

Lands' End is a smaller company that sells products globally without large facilities overseas. The company utilizes a direct-to-consumer business model, allowing them to sell products online and ship them directly to customers. This allows them to operate on a global scale without the need for physical stores or large distribution centers overseas.

Question 15

Which of the following is NOT a disadvantage associated with exporting?

Accepted Answer

The answer of Which of the following is NOT a...

Question 16

Increasingly, customers worldwide are demanding emphasis on local requirements and companies are needing 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 17

The widespread use of the Internet has

Accepted Answer

The Internet has made it possible for firms to inexpensively build an initial business in a foreign country, thus reducing the barriers to entry that have traditionally made foreign markets more difficult to enter.

Question 18

Research shows that ____ strategies are not as prevalent as once thought, and that they are very difficult to implement. In fact, these strategies are becoming relatively less attractive to firms than other approaches to international competitiveness. To some extent, this is a result of the liability of foreignness.

Accepted Answer

The answer of Research shows that ____ strategies are not...

Question 19

Which of the following is NOT a typical disadvantage of licensing?

Accepted Answer