Question 1

Which aspect of internationalization by companies does not increase the intensity of competition within national markets?

Accepted Answer

Internationalization stimulating mergers and acquisitions within an industry does not directly increase the intensity of competition within national markets, as it often leads to consolidation and potentially reduces the number of competitors.

Question 2

Designating a national subsidiary as a "center of excellence" for a particular product,technology,or activity is a way of reconciling differentiation to meet the needs of national markets with the exploitation of global scale advantages.

Accepted Answer

Designating a subsidiary as a "center of excellence" allows a company to leverage specialized expertise and innovation in a specific area while still benefiting from global efficiencies and scale.

Question 3

Internationalization among New York-based law firms is the result of:

Accepted Answer

The statement indicates that New York-based law firms are expanding their international reach to serve their multinational clients. Therefore, option B is the best answer. Option A does not explain why New York-based law firms are expanding their international reach, while option C and D may be potential benefits of internationalization, but not the driving force behind it.

Question 4

Global industries are those where:

Accepted Answer

Global industries refer to industries that have both high levels of international trade (imports and exports) as well as foreign direct investment. Therefore, both options A and C are partially correct, but only option D includes both aspects of globalization. Option B is incorrect as technology transfers are not the only defining feature of global industries.

Question 5

A common approach to reconciling the benefits of global scale with the need for national differentiation is to:

Accepted Answer

Creating standard product platforms allows companies to achieve economies of scale while adapting features and marketing to meet local needs, balancing global efficiency with local responsiveness.

Question 6

The value chain for a product will tend to be dispersed across different countries when:

Accepted Answer

Different stages of the value chain may require different types of resources and capabilities that are not available or cost-effective in a single location. Therefore, companies may choose to disperse the value chain across different countries to take advantage of the resources and capabilities available in each country. This can result in cost savings and competitive advantage for the company.

Question 7

In Ghemawat's "Aggregation,Adaptation,Arbitrage" framework,the potential for a multinational enterprise to exploit arbitrage benefits are likely to be greater in a capital-intensive industry than in a labor-intensive industry

Accepted Answer

Arbitrage opportunities typically involve exploiting differences in factors such as labor costs, regulatory environments, and tax regimes across countries. In a labor-intensive industry, differences in labor costs can be significant, offering greater potential for arbitrage than in capital-intensive industries where machinery and technology play a larger role and labor cost differences are less impactful.

Question 8

The theory of comparative advantage is concerned with:

Accepted Answer

The answer of The theory of comparative advantage is concerned...

Question 9

The Dutch-based electrical and consumer electronics multinational,Philips,has transferred the headquarters for several of its global business away from the Netherlands.In terms of Bartlett and Ghoshal's typology of multinational strategies,this represents a transition from:

Accepted Answer

The transition from having headquarters in the home country to having the headquarters spread across different countries is characteristic of a shift towards a transnational strategy. In this case, Philips' decision to relocate the headquarters for several of its global businesses away from the Netherlands suggests a move away from a decentralized federation strategy, where each geographic area has significant autonomy and decision-making power, towards a more integrated and interconnected approach to business operations. Therefore, option C is the best choice.

Question 10

Saudi Aramco and Statoil are both major oil producers.Saudi Aramco's competitive advantage is based on its access to low-cost domestic oil reserves; Statoil's competitive advantage is its capability in offshore exploration and production.The implications for the internationalization strategies of the two companies are:

Accepted Answer

Saudi Aramco's competitive advantage in low-cost domestic reserves makes exporting a natural strategy, while Statoil's expertise in offshore exploration and production suggests it should leverage this capability through direct foreign investments in regions requiring such specialized skills.

Question 11

According to Porter's "national diamond" analysis,the competitive advantage of Swiss firms in watches,German firms in luxury cars,and Japanese firms in cameras is a result of:

Accepted Answer

According to Porter's national diamond analysis, the competitive advantage of firms in a particular industry within a specific country is influenced by four key elements - factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. In the case of Swiss firms in watches, German firms in luxury cars, and Japanese firms in cameras, their competitive advantage is primarily due to the unique characteristics of local demand in their respective countries. For instance, Swiss watchmakers have benefited from Switzerland's reputation as a hub of precision engineering and luxury craftsmanship, while Japanese camera makers have leveraged their country's enthusiasm for high-quality gadgets and an interest in capturing moments. These local demand factors have spurred companies to invest in research and development, build strong supply chains, and foster innovation.

Question 12

Many retailers that have been outstandingly successful in their how markets have experienced much poorer performance when they have entered overseas markets.These include: Tesco,Marks& Spencer,Laura Ashley,and Body Shop in the UK); Best Buy,Sears,Macy's,and Wal-Mart in the US.This reflects:

Accepted Answer

The poor performance of successful retailers in overseas markets reflects the lack of major efficiency benefits from international scope combined with the need for national differentiation, as different markets may require tailored strategies and adaptations.

Question 13

Firms internationalize through two mechanisms:

Accepted Answer

The option D, trade and direct investment, is the best choice as it includes both exports and imports (trade) as well as direct investment, which are the two main mechanisms through which firms internationalize. Trade involves the exchange of goods and services across borders, while direct investment involves establishing or acquiring business operations in foreign countries. Therefore, option D provides a comprehensive approach to understanding how firms internationalize. Option A is too narrow as it only includes exports and imports, while option B only focuses on the type of goods traded. Option C excludes trade and focuses solely on investment, which is also too narrow.

Question 14

Large countries have an advantage over small countries in technology-intensive and capital-intensive industries,because:

Accepted Answer

A large home market allows firms to achieve economies of scale, reducing costs and increasing competitiveness in technology-intensive and capital-intensive industries.

Question 15

Uber's distribution of ice cream in over 38 counties of the world on July 17,2014,exemplifies the following feature of international business:

Accepted Answer

The answer of Uber's distribution of ice cream in over...

Question 16

Traditionally,European-based multinational companies such as Unilever,Shell,and Philips have been highly centralized; Japanese multinationals such as Honda,Sony,and Hitachi have been highly decentralized.

Accepted Answer

This statement is true. European-based multinationals have often been centralized in their decision-making processes, while Japanese multinationals tend to be more decentralized.

Question 17

With internationalization,the threat of new entry into domestic industries is increases because:

Accepted Answer

Large firms from other countries may have the resources and capabilities to overcome barriers to entry that would typically deter domestic firms, increasing the threat of new entrants.

Question 18

A start-up company based in Canada and led by an academic microbiologist has patented genetically-modified,drought-resistant maize particularly suitable to arid regions of Africa.The firm has been unable to attract significant venture capital investment.How should the firm exploit commercial opportunities for its product in Africa?

Accepted Answer

The answer of A start-up company based in Canada and...

Question 19

The "centralized hub" strategy that Japanese multinationals pursued during the 1970s and 1980s is likely to be most successful in industries with:

Accepted Answer

The answer of The "centralized hub" strategy that Japanese multinationals...

Question 20

A key difference between Bartlett and Ghoshal's "transnational corporation" and the conventional US multinational corporation (described by Bartlett and Ghoshal as a "coordinated federation")is that communication and coordination occurs between national units rather than exclusively between each national unit and the corporate HQ

Accepted Answer

Bartlett and Ghoshal argue that a transnational corporation differs from a traditional multinational corporation in that communication and coordination occur between the national units of the company rather than solely between each national unit and the corporate headquarters. In other words, a transnational corporation has a more decentralized and collaborative approach to decision making and operations.

Quiz 12: Global Strategy and the Multinational Corporation