Question 1

Coca-Cola has adopted a short-message communication tool, similar to Twitter that is more prominent in South East Asia, to disseminate and market their soft-drink products. All of the following are likely reasons that Coca-Cola is using this local communication tool, except

Accepted Answer

The correct answer is D because having a small, but loyal following would not be a compelling reason for a global brand like Coca-Cola to choose a communication tool for marketing purposes. They would likely be interested in tools that offer a wide reach or access to a significant portion of their target market, which is suggested by options A, B, and C.

Question 2

The Dutch lead the world in the cut-flower industry because of their research in flower cultivation, packaging, and shipping-not because of their weather. This is an example of________ in their competitive advantage as a nation.

Accepted Answer

The statement suggests that the Dutch have developed specialized knowledge and skills in the flower industry, which is an example of factor conditions in their competitive advantage as a nation. It is not related to demand conditions, socio-cultural conditions, or structural conditions.

Question 3

Why might an upstart firm developing a new type of landing gear want to locate in Quebec's advanced aerospace cluster, home to firms such as Boeing, Bombardier, Pratt & Whitney, and Rolls Royce?

Accepted Answer

Quebec's advanced aerospace cluster is home to a number of related and supporting industries, including well-established international firms such as Boeing, Bombardier, Pratt & Whitney, and Rolls Royce. By locating in this cluster, the upstart firm developing a new type of landing gear could benefit from the expertise, resources, and networks of these established firms, as well as potential access to suppliers, customers, and other supporting businesses in the aerospace industry. This would provide the upstart firm with a competitive advantage and help it to overcome barriers to entry in the aerospace industry. Factors such as demand conditions, company structure and strategy, and factor conditions are also important for firm location decisions, but related and supporting industries are particularly relevant in this case.

Question 4

Austria has been described as "the very heartland of European coffee culture." Austrians drink 21.5 litres of coffee per person annually. Starbucks wanted to open coffeehouses in Austria and sell Starbucks coffee there. For Starbucks, the Austrian level of coffee sophistication would be an example of:

Accepted Answer

The answer of Austria has been described as "the very...

Question 5

The German leadership in scientific and industrial instrumentation relates directly to the cluster of supporting German precision engineering suppliers. This is an example of ________in their competitive advantage as a nation.

Accepted Answer

The given scenario talks about the cluster of supporting German precision engineering suppliers that directly relate to the German leadership in scientific and industrial instrumentation. This indicates the presence of related and supporting industries, which is one of the four determinants of national competitive advantage according to Porter's Diamond model. Hence, choice C - related and supporting industries is the correct answer.

Question 6

Which of the following is an example of related and supporting industries?

Accepted Answer

The existence of supplier clusters, such as component manufacturers or packaging suppliers, is an example of related and supporting industries. These industries are important for providing the necessary resources and materials for a company to operate and create its products.

Question 7

Which of the following statements best describes the recent relationship between the imports into Canada and the exports from Canada?

Accepted Answer

Canada has generally experienced a trade surplus in recent years, where exports have exceeded imports.

Question 8

Michael Porter has identified four key elements to explain why some companies and industries succeed globally while others fail. These four elements collectively are called:

Accepted Answer

The "diamond" of national competitive advantage is a framework developed by Michael Porter to explain why some companies and industries succeed globally while others fail. It consists of four key elements: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry.

Question 9

A graphical representation of Michael Porter's elements which create a nation's competitive advantage looks like a:

Accepted Answer

Michael Porter's elements which create a nation's competitive advantage are commonly represented as a diamond. This is because the elements - factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry - interact and reinforce each other to create a strong competitive advantage. The diamond shape represents the interdependence and mutual reinforcement of these elements.

Question 10

To become leaders in the world market, countries need related and supporting industries because:

Accepted Answer

Clusters of strong suppliers can accelerate innovation by working together to develop new technologies and products, and by providing each other with raw materials, components, and expertise. This can make a country more competitive in the global market and help it become a leader in certain industries. Eliminating the need to import materials may also be a benefit, but it is not the primary reason why related and supporting industries are important. Generating revenue for further investment is also a potential benefit of having strong suppliers, but it is not the main reason why countries need these industries. Protectionism is not a desirable or effective approach to promoting economic growth and competitiveness in the long term.

Question 11

The Italian shoe industry has become a world leader because of intense domestic competition among such firms as MAB, Bruno Magli, and Rossimoda, which has made shoes for Christian Dior and Anne Klein Couture. This is an example of ________ in their competitive advantage as a nation.

Accepted Answer

The intense domestic competition among firms in the Italian shoe industry is an example of company strategy, structure, and rivalry, which is one of the four determinants of national competitive advantage according to Michael Porter's Diamond Model. The other determinants include demand conditions, related and supporting industries, and factor conditions. Therefore, option A is the best choice.

Question 12

Which of the following is an example of a demand condition?

Accepted Answer

Sophistication of consumers is a demand condition, as it refers to the characteristics and preferences of the target market that influence their demand for a product or service. Intensity of competition, existence of supplier clusters, and natural resources are all examples of other external factors that can affect a company's competitiveness, but they are not demand conditions specifically.

Question 13

Every day, in a third-class carriage of the express train that rolls between Bombay and Ahmedabad, plainly dressed couriers carry precious cargo: diamonds. Rough gems are imported to Bombay from dealers in London, Antwerp, Tel Aviv, and New York, taken by these couriers to cutting and polishing centers in Gujarat state, and then
Carried back to Bombay to be reexported to the world. This system, based on trust,
Secrecy, and skilled low-cost labour, has been working for half a century. It has helped make India the world's premier center for diamond cutting and polishing. Nine out of every 10 stones sold in the world pass through India, making diamonds that country's
Largest export at $6.6 billion a year. This ability to use its skilled labour as a resource is an example of what Michael Porter would term:

Accepted Answer

Michael Porter's theory of competitive advantage suggests that the success of a nation's industries is based on four interlinked factors: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. In this case, the ability to use skilled, low-cost labor as a resource is a factor condition that has helped India become the world's premier center for diamond cutting and polishing. The other options - demand conditions, structural conditions, and socio-cultural conditions - do not adequately describe the role of India's skilled labor in the diamond industry.

Question 14

Michael Porter has identified four key elements in a nation's competitive advantage. They are factor conditions, related and supporting industries; and company strategy, structure, and rivalry; and:

Accepted Answer

The fourth key element in a nation's competitive advantage according to Michael Porter is demand conditions. This refers to the nature and size of buyers' needs in the domestic market. A strong domestic demand can help firms improve their competitive advantage by allowing them to achieve economies of scale, introduce new products faster, and improve product quality based on customer feedback.

Question 15

Researchers concluded that all of the below are effective axioms to include social media in a global marketing strategy except

Accepted Answer

Option B contradicts the idea of adapting to local cultures and perceptions, which is essential for an effective global marketing strategy. Therefore, it is not an effective axiom to include social media in a global marketing strategy. Options A, C, and D are valid axioms as they emphasize the impact of local contexts and events on social media usage and strategy.

Question 16

According to Michael Porter's diamond of national competitive advantage, both the number and sophistication of domestic customers for an industry's product are examples of:

Accepted Answer

According to Porter's diamond, demand conditions refer to the characteristics of the domestic market that influence competition, such as the number and sophistication of domestic customers. Therefore, the correct answer is C, demand conditions.

Question 17

A nation's ability to turn its natural resources, education, and infrastructure into a competitive advantage is reflected in:

Accepted Answer

The statement is referring to the concept of "factor conditions" in the Diamond Model of National Advantage developed by Michael Porter. Factor conditions refer to a nation's ability to use its natural resources, human resources (education), and infrastructure to create a competitive advantage in industries. Therefore, the best choice is D - factor conditions.

Question 18

Japan's sophisticated consumers expect quality in their TVs and radios, thereby making Japan's producers, such as Sony, Sanyo, Matsushita, and Hitachi, some of the world leaders in the electronics industry. This is an example of ________in their competitive advantage as a nation.

Accepted Answer

The statement describes how Japan's consumers have high expectations for quality in their TVs and radios, which creates a demanding market for electronics. This is an example of demand conditions, one of the four factors in Porter's Diamond model of national competitive advantage. With such high demand, Japan's electronics producers have to constantly innovate and improve their products to stay ahead, giving them an advantage in the global electronics industry.

Question 19

World trade is so important to the global economy because more ________than total world merchandise is traded among the top 10 exporters and importers.

Accepted Answer

The answer of World trade is so important to the...

Question 20

Michael Porter has identified four key elements in a nation's competitive advantage. They are demand conditions; related and supporting industries; and company strategy, structure, and rivalry; and:

Accepted Answer

The fourth key element in a nation's competitive advantage is factor conditions, which refers to the nation's resources, such as land, labor, capital, and natural resources, as well as the nation's level of education and technological development.

Quiz 7: Reaching Global Markets