Question 1

The global strategy offers greater opportunities to take innovations developed at the corporate level, or in one market, and apply them in other markets.

Accepted Answer

A global strategy allows for the transfer and application of innovations across different markets, leveraging the company's resources and capabilities on a broader scale.

Question 2

A company that chooses a truly global corporate-level strategy assumes that the liability of foreignness will be minimal.

Accepted Answer

A truly global corporate-level strategy implies that the company believes it can operate effectively across different countries with minimal disadvantages or challenges associated with being a foreign entity, thus assuming the liability of foreignness will be minimal.

Question 3

Evidence suggests that, in general, using an international cost leadership strategy when exporting to developed countries has the most positive effect on firm performance, while using an international differentiation strategy with larger scale when exporting to emerging economies leads to the greatest amount of success.

Accepted Answer

International cost leadership is more effective in developed countries due to their price-sensitive consumers, while differentiation is more successful in emerging economies with growing middle classes seeking unique products.

Question 4

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.

Accepted Answer

Transnational strategies are necessary to balance cost efficiency and local responsiveness, addressing both competitive pressures and diverse customer needs.

Question 5

A transnational strategy is difficult to use because of its conflicting goals.

Accepted Answer

A transnational strategy aims to achieve both global efficiency and local responsiveness, which can be conflicting goals, making it challenging to implement effectively.

Question 6

A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy.Instead, the actual strategic choices managers make may be the most compelling reasons for success or failure.

Accepted Answer

A national competitive advantage provides a favorable environment, but the firm's success depends on strategic decisions and execution by its managers.

Question 7

Research suggests that the performance of the global strategy is enhanced if it deploys in areas where regional integration among countries is occurring.

Accepted Answer

Regional integration can create larger markets, reduce trade barriers, and increase economic cooperation, which can enhance the effectiveness of a global strategy by providing more opportunities and efficiencies.

Question 8

The firm using a global strategy seeks to develop economies of scale as it produces the same, or virtually the same, products for distribution to customers throughout the world who are assumed to have similar needs.

Accepted Answer

A global strategy focuses on standardizing products across international markets to achieve economies of scale, assuming that customer needs are similar worldwide.

Question 9

Because of the lack of protection of intellectual property in some foreign countries, licensing arrangements are one of the best ways for a firm to protect its technology from being appropriated by potential competitors.

Accepted Answer

Licensing can expose a firm's technology to potential competitors, as it involves sharing knowledge and expertise, which can be risky in countries with weak intellectual property protection.

Question 10

Four types of distances are associated with the liability of foreignness: cultural, administrative, geographic, and economic.

Accepted Answer

The liability of foreignness refers to the inherent disadvantages that foreign firms experience in host countries, and these disadvantages can be categorized into cultural, administrative, geographic, and economic distances.

Question 11

Even if effectively implemented, the transnational strategy often produces lower performance than does the implementation of either the multidomestic or global strategies.

Accepted Answer

The transnational strategy aims to balance global efficiency and local responsiveness, potentially leading to higher performance than either multidomestic or global strategies alone.

Question 12

Exporting and licensing are the most appropriate ways for smaller firms to first enter international markets.

Accepted Answer

Exporting and licensing require less investment and risk compared to other entry modes, making them suitable for smaller firms with limited resources.

Question 13

The "regionalization" environmental trend means that firms can focus on a region (customization) but also have some standardization or sharing within the region.

Accepted Answer

Regionalization allows firms to tailor their strategies to specific regional markets while also benefiting from shared resources and standardized practices within those regions.

Question 14

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry that provides the leather needed to construct shoes and related products.

Accepted Answer

Italy's shoe industry benefits from a strong network of related and supporting industries, including a well-established leather-processing sector, which provides high-quality materials essential for shoe production.

Question 15

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

Accepted Answer

These organizations focus on regional cooperation and integration, promoting economic and political collaboration within specific geographic areas rather than globally.

Question 16

A major advantage of multidomestic strategies is the ability to customize products and services for the specific market, although this sacrifices economies of scale.

Accepted Answer

Multidomestic strategies focus on tailoring products to local markets, which can lead to higher costs and reduced economies of scale compared to a standardized global approach.

Question 17

FanFare United is a global firm with operations in 20 countries.The home office of FanFare United determines the strategies that business units are to use in each country or region.FanFare is applying a multidomestic strategy.

Accepted Answer

A multidomestic strategy involves tailoring strategies to fit local markets, whereas FanFare United's approach of determining strategies centrally aligns more with a global or transnational strategy.

Question 18

Rendell Corp.has just entered international markets.While it has begun to see some benefits, it is also challenged by the high cost of transportation and the expense of tariffs.Rendell most likely used exporting as its mode of entry.

Accepted Answer

Exporting often involves high transportation costs and tariffs, which aligns with the challenges Rendell Corp. is facing.

Question 19

By choosing a region where markets are more similar, the firm may be able to better understand those markets and cater to their needs, but also achieve economies through sharing of resources.

Accepted Answer

Choosing similar markets allows a firm to leverage shared resources and knowledge, leading to better market understanding and cost efficiencies.

Question 20

Grassley-Partition Ltd.(GPL) is embarking on an international strategy.The firm wants to be able to take advantage of the economies of scale offered by global efficiency and, at the same time, be responsive to the individual markets into which it enters.GPL needs to pursue a transnational strategy.

Accepted Answer

A transnational strategy allows a firm to achieve global efficiency while being responsive to local markets, aligning with GPL's goals.

Quiz 8: International Strategy